Housing advocates want a bigger housing bond
With Austin facing an affordable housing crisis, city leaders are hoping that taxpayers will OK tens of millions of dollars to fund the construction of low-cost apartments and houses as well as repairs to homes for Austin’s low-income and working-class population.
Right now, the figure proposed is $85 million. That’s what city staff presented to the Bond Election Advisory Task Force as part of a broader $640 million general obligation bond that City Council is planning on putting on the November 2018 ballot for voters to approve. The bond also includes major spending on parks, stormwater infrastructure, improvements to municipal facilities and transportation.
Although $85 million would amount to the largest housing bond in city history, it’s a substantially smaller figure than the $175 million of potential funding that housing staff presented to those in the Financial Services Department who crafted the bond proposal. And it’s a drop in the bucket of the more than $6 billion in needs identified in the Strategic Housing Blueprint adopted by Council earlier this year.
However, explained Katy Zamesnik, the city staff liaison for the task force, by no means should the initial recommendation be regarded as final. That was simply a “starting point” to which the task force and Council will likely build upon, she said.
While the task force has yet to make any changes to the proposal – Zamesnik said that likely won’t begin until October – some members of Council have signaled that they want much more for housing.
“That’s not enough,” said Council Member Ann Kitchen.
Council Member Greg Casar said that he would like to get to over $100 million, adding “that the community should know that that’s really not a lot.”
Even housing advocates who believe the city needs to commit far more funding to housing are wary of asking too much of voters, however. While voters have twice approved housing bonds – $65 million in 2013 and $55 million in 2006 – their rejection of a $78 million measure in 2012 is still a fresh memory at City Hall. That year, voters approved a number of other bond measures but rejected the affordable housing component.
“I think the housing need is so huge that we could use hundreds of millions of dollars, but that’s not realistic for voter approval,” said Walter Moreau, executive director of Foundation Communities, a nonprofit affordable housing developer.
Mayor Pro Tem Kathie Tovo said that the key is a campaign that educates voters on the need for the funding as well as the role that it plays, “not just benefits from a social and economic justice perspective but economic benefits because it multiplies within our community.”
Megan Lasch of Saigebrook Development, another affordable housing developer, said that the need for additional city funds has become even greater since the November election. That’s because not only has the Trump administration proposed major cuts to federal affordable housing assistance, but its push for an overhaul of the tax system has made banks much less interested in participating in the 9 percent tax credit program that is responsible for much of Austin’s affordable housing.
The way the 9 percent program works, an affordable housing developer receives a tax credit worth a certain amount of money. It then sells that to a bank in return for equity in the development. That helps fulfill the bank’s obligation to invest in its community, in accordance with the Community Reinvestment Act, and offers a “better write-off than a donation to a charity,” said Lasch.
Before the election, she explained, the credits were getting bought at about a dollar-to-dollar ratio, meaning that banks were offering $10 million for a $10 million tax credit. Now they’re only offering about 90 cents on the dollar.
That is actually an improvement over where things stood right after the election, when the incoming president and the GOP-controlled Congress appeared poised to deliver on a number of campaign promises on health care, taxes and infrastructure. At that point, recalled Moreau, the tax credits were selling at only about 80 cents on the dollar. They have since rebounded as the limits of Trump’s power in Washington have become apparent.
“The longer Congress can’t pass anything, the better the pricing on the credits,” said Moreau.
However, the tax credits alone will never be enough without assistance from the city, housing advocates maintain. Lasch noted two developments that Saigebrook is in the process of building – the La Madrid Apartments at Manchaca Road and Slaughter Lane and the Aria Grande at I-35 and Woodland Avenue – that were made possible through the use of both tax credits and funds from the last housing bond in 2013.
“That’s 275 units that would not be built without city (bond) funds,” she said.
Greg Anderson, director of operations for Habitat for Humanity, said that there are only several million dollars left from the last bond. If a new bond isn’t approved soon, the city will be in “crisis mode,” he said.
“We’re losing our working class, we’re losing our creative class,” he said. “We’re losing far too many people.”
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