Memo says bonds needed to meet affordability goals for waterfront redevelopment
Thursday, May 12, 2022 by Chad Swiatecki
To reach the goal of bringing about 500 units of affordable housing to the South Central Waterfront District, the city would need voters to approve more bond funds, for as much as $60 million. The prospects for planned affordable housing for the area south of the Congress Avenue bridge were among several issues discussed in a recent memo to City Council from Economic Development Department Director Sylnovia Holt-Rabb.
The memo said financial tools such as federal funds, tax credits for low-income housing and some of the money generated from a proposed Tax Increment Reinvestment Zone would fall short of the funding needed to subsidize affordable housing in the district that is slated for massive redevelopment in the coming years. At a February work session for City Council, staff said each affordable unit would require a subsidy of about $100,000, with the total subsidy package “somewhere between $40 million and $60 million.”
The memo, which responds to several questions Council raised about the district in February, points to this summer as the time when more significant plans and possible action items can be presented to Council. Summer is also when the regulating plan for the district is expected to be complete, paving the way for new incentives for developers that are seen as essential for increasing density, the amount of affordability, and helping the district to be restructured in a more pedestrian-friendly way.
Also needed for that new development pattern is $277 million in public works and other projects that would be paid for largely via funds gathered by the TIRZ that otherwise would have gone into the city’s General Fund. In February some Council members worried about creating a mechanism that removes significant tax revenue from the General Fund over the course of the district’s development, but the memo expressed concern over how the area would develop without significant streetscape work and other improvements.
“The SCW framework plan provides a comprehensive design of the public realm that provides the foundational components that create district identity for the area. This identity envisions a lively, attractive, and connected pedestrian environment, expanded open space and public parks, connections to and along the waterfront and new affordable housing,” it reads.
“Without the implementation of the district plan and supporting infrastructure investment, the area may develop in a fragmented manner at lower densities and taxable value as well as at a slower pace or through site-specific development agreements through planned unit developments.”
The memo also reveals a possible road map for the future of One Texas Center, the city’s only land asset in the district and likely the location of a significant portion of the area’s affordable housing. The primary option for the property appears to be using the Austin Housing Finance Corporation to reach deals with developers centered around affordability goals, with putting the property into a community land trust another possible option.
Recently leaders from the city’s Economic Development Corporation, which will have a primary role in managing funds from the TIRZ, said Council’s delay in approving the funding mechanism is preventing needed preliminary work on the public works projects from being carried out. That delay means private development with standard entitlements is more likely to move forward in the interim, reducing the options for the vision seen for the area since initial plans were discussed beginning nearly a decade ago.
The future of the former Austin American-Statesman property, which is currently planned to feature more than 1,300 residential units as well as a significant amount of office and commercial space, has also been a subject of much discussion. Council Member Chito Vela, who took office in February, proposed removing affordability requirements included in the PUD for the site in exchange for developer Endeavor Real Estate Group to contribute $20 million toward the city’s effort to create permanent supportive housing for the homeless.
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