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Council to put off hearing on tax credit property

Thursday, September 20, 2018 by Jo Clifton

At the request of Council Member Delia Garza, on Thursday City Council will likely postpone a scheduled hearing and consideration of whether to give the city’s blessing to 4 percent affordable housing tax credits to a proposed apartment complex for low-income seniors.

At the Council work session on Tuesday, Garza said she has to leave the Thursday meeting at about 4 p.m. and expected any hearing on the matter to take place later than that. Mayor Steve Adler said he will ask that the item be postponed to Oct. 18.

Garza named three specific objections to the Limestone Ridge Senior Apartments, which are proposed to be built in Austin’s extraterritorial jurisdiction outside of District 2 in Southeast Travis County. Its location in the ETJ is one problem, she noted.

The second problem, according to Garza, is that this proposed complex is more than a mile from the closest bus stop, and the developer has no plans to provide transportation assistance to future residents.

A member of the Capital Metropolitan Transportation Authority Board of Directors, Garza is acutely aware of the difficulty the agency faces in trying to balance the distance from one bus stop to another and how frequently the buses run. Developers often say the city should work with Capital Metro to get a bus stop, Garza said, but doing so runs up against the need for frequent service.

The developer, AMTEX, proposes to build a total of 225 units at 6907 McKinney Falls Parkway. Of those, there would be 110 one-bedroom units with an estimated rent of $967 a month and 115 two-bedroom units renting for $1,161 per month. All of the units would be for seniors whose income is 60 percent of the median family income, or less, according to Council backup material.

Garza also objects to the rent, saying that people can currently rent two-bedroom apartments in the area close to a bus stop for around $1,200, so it does not seem affordable to her.

However, Rosie Truelove, director of the Neighborhood Housing and Community Development Department, told Garza that unlike market-rate apartments, rents for the 4 percent tax credit apartments are guaranteed to offer affordable rents for families with 60 percent MFI for a number of years. The department’s community development administrator, Mandy De Mayo, told the Austin Monitor that the typical term is 30 years. She said the rents are set by the Texas Department of Community Affairs and include the cost of utilities.

Mayor Steve Adler told his colleagues, “This is a recurrent issue that comes up that I think is a policy issue, and it would be really good if staff could lay this out for us. It has come up repeatedly over the last several years, and it would be better to drive these tax credit opportunities to the places that we actually want them to happen. My understanding is that it may be that even with the tax credits we can’t make those things work in areas where we want to have them happen because the underlying dirt is too expensive to make the projects work.”

He said a good policy might be to disapprove projects that are not where the city wants them and also to incentivize more affordable housing in places where the city does want it.

“Our values are compact and connected,” Council Member Ora Houston said. She pointed out that the city is not obligated to vote in favor of the project simply because the developer is asking.

Council Member Greg Casar said he thought Council members would be more comfortable turning down 4 percent tax credit projects in places where the city does not want them if they could be sure that they had enough affordable housing in areas within the city and close to transit.

Council Member Ellen Troxclair said the state agency will not grant the 4 percent tax credits unless the city indicates that it does not object. She said any developer that gets that waiver from the city would receive the 4 percent credits. Other cities have requirements that developers must follow certain city regulations in order to receive an OK for the tax credits and Austin should look at doing the same thing, she said.

Adler noted that Council Member Alison Alter will not be on the dais Thursday. She is reportedly leading a city delegation to India this week. Garza is leading a delegation to Oslo, Norway, to attend Oslo Innovation Week, which will give her an opportunity to meet with representatives of a variety of industries, including tech companies that are seeking expansion into the U.S. market.

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