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Affordable housing crisis: To conserve or to create?

Friday, August 24, 2018 by Jack Craver

As Austin struggles with an ongoing shortage of affordable housing, some housing activists and elected officials believe the city’s top priority should be creating new housing, both by allowing the market to build new units that target various income levels and by spending city funds to build subsidized housing for low-income residents.

Others argue that the city should focus more on protecting the low-cost market-rate housing that already exists. Some of the city’s cheapest housing is found in older apartment complexes. In recent years, many of them have been demolished and redeveloped into higher-priced housing.

On Thursday, Council approved a resolution directing city staff to use a portion of city housing funds to “acquire and preserve multi-family developments and mobile home parks that are home to households earning below 60 percent of the median family income.”

The resolution, authored by Mayor Pro Tem Kathie Tovo, further directed staff to focus on housing within a quarter-mile of high-frequency transit in areas that are “rapidly gentrifying or highly vulnerable to gentrification.”

Tovo said that the resolution was aimed at fulfilling a longtime Council goal to establish a “preservation strike fund.” The idea of a strike fund is that money can be quickly deployed to purchase land as it becomes available. The resolution, said Tovo, is meant to convey to staff that it should prioritize the acquisition of multifamily apartment buildings “that are at risk of redevelopment.”

Over the last two years, Mayor Steve Adler has worked with investors to create a nonprofit organization, Affordable Central Texas, which is administering a private strike fund that aims to buy existing properties and rent them at below-market rates. That initiative is targeting renters at between 60 and 120 percent of the median family income.

As happy as she is with the work being done by the private fund, said Tovo, it’s important for the city to take part in something similar to target housing for those below 60 percent MFI.

Staff from the Neighborhood Housing and Community Development Department said that involving the city in a strike fund prevents the fund from being able to act quickly. Whenever city funds are involved in a program, explained NHCD Acting Assistant Director Erica Leak, it is hard to “strike quickly” due to the myriad regulations associated with spending taxpayer dollars.

“That doesn’t mean that the city can’t acquire property,” Leak added.

The private strike fund, added Adler, is premised on producing a return for private investors. That would not be possible with any kind of city-funded project.

Council Member Jimmy Flannigan suggested that the city might be erring by putting too much emphasis on preservation of existing properties. He proposed adding language to the resolution directing staff to compare the preservation initiative to other programs aimed at creating new affordable housing. The goal, he said, should be to maximize the number of affordable units in the city, whether through preservation or new development.

Flannigan highlighted the recent redevelopment of Chalmers Court, the Depression-era affordable housing project on the east side. The redevelopment brought renovations to the existing units and added new units.

Council Member Greg Casar said that maximizing the number of affordable units citywide is an important goal, but not the only goal. The city also has a duty to create affordable housing in different parts of the city, he said.

Tovo also said that there may not be much land available in certain parts of the city to be acquired for new affordable housing. In such areas, she said, the city might be better served by focusing on acquiring and preserving existing housing.

In response to a written question from Flannigan submitted before the meeting, NHCD staff said that the resolution would add to the department’s workload and make it harder for staff to implement other parts of the Strategic Housing Blueprint.

“We’re at capacity,” said NHCD Director Rosie Truelove. “It’s not that we don’t see the benefit of this and that we’re not thinking in these terms. We’re just recognizing that some other things will potentially be moved around a little bit.”

Tovo stressed that she did not want to jeopardize progress on other housing programs. Her intention was not for staff to sideline other initiatives.

Flannigan’s proposed language was slightly altered but ultimately added to the resolution, which was approved unanimously. Council Member Ellen Troxclair was absent.

Photo by OpalDivine [CC0], from Wikimedia Commons.

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