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Who has a ‘direct or indirect interest’ in real estate? It depends who you ask

Thursday, May 10, 2018 by Jack Craver

City Council appears divided over what do about a provision of the city charter that requires two-thirds of the members of the Planning Commission to be “lay members” who are not “directly or indirectly connected with real estate or land development.”

Activists opposed to CodeNEXT have filed a complaint with the Travis County District Attorney alleging that seven of the 13 members of the Planning Commission are connected to the real estate industry and that the commission is therefore in violation of the charter.

In response, city staff has crafted two potential resolutions for Council to consider approving at its meeting today. Each resolution would set up a process to limit land use professionals to a maximum of four spots on the Planning Commission.

The resolutions differ, however, in how they define somebody who has a “direct or indirect” interest in the real estate industry. One of them would apply the terms broadly to a range of those who make money in the real estate industry, including not just developers but architects, construction engineers and owners of rental properties. The other resolution would be much narrower, applying only to “traditional land developers or financiers of real estate development.”

But while the resolutions lay out a process for how to determine future appointees to the Planning Commission, they do not propose a solution for dealing with the current members of the commission. If more than four of the members are determined to be connected to the real estate industry, how should the city decide who to remove?

Council Member Alison Alter, who suggested that she favored the more broad definition of real estate interests, said she planned on offering an amendment that would delegate the task of determining whether a commissioner is a layperson to the city auditor. If members must be removed, it should be on a “last-in, first-out basis,” she said. If there is not a seniority difference, commissioners would draw lots.

Council Member Jimmy Flannigan replied that it was important to recognize “that there is not a consensus” on Council about how to interpret the charter provision and that there has not yet been a ruling from any legal authority stating that the current composition of the Planning Commission is in violation of the charter.

Flannigan’s appointee to the Planning Commission, Greg Anderson, is one of the commissioners who CodeNEXT opponents have said should be considered a real estate industry insider due to his role as director of operations at Habitat for Humanity of Austin.

Council Member Greg Casar agreed that the charter language is “very broad” and could be subject to a range of interpretations. He wondered whether his appointee to the Zoning and Platting Commission, Abigail Tatkow, who works for the Ending Community Homelessness Coalition (ECHO) to connect people with housing, would be considered a real estate industry insider according to the charter.

“I can’t imagine that the charter is trying to keep people like her off the commission,” said Casar.

Council Member Ann Kitchen said she believed the issue was not about defining real estate professionals, but rather establishing a process to ensure that the commission doesn’t have too many in the future.

Asked what she believed could be done to address the current situation, Kitchen suggested that she might offer an amendment establishing a process by which Council could remove commissioners, a power that she said it does not currently have.

Council Member Leslie Pool said that city staff has not indicated that Council lacks the power to remove commissioners, but rather that there is no clear process for doing it.

Council Member Pio Renteria derided the charter language as dating back to the pre-10-1 Council days, when he said Council was dominated by affluent whites with the resources and connections to run citywide campaigns. He referenced a real estate agent in his district who he said helps people avoid getting scammed by predatory home flippers.

“If someone would tell me that she’s not qualified to be on the Planning Commission, I’d laugh in (that person’s) face,” said Renteria.

Alter emphasized that nobody is prohibited from serving on the commission, only that the commission limits the number of real estate professionals. Responding to Casar’s comment, she said that the charter “does not distinguish between for-profit and nonprofit” real estate activities.

“We don’t get to decide whether we like it or not,” she said. “That’s what the charter says.”

Video still courtesy of ATXN.

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