Posts Tagged ‘austin affordable housing’

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East Austin: Upscale gentrification worsens affordable housing crisis, avoids bona fide TOD

29 June 2017

Rendition of southeast portion of Plaza Saltillo development, now under construction. Higher-density gentrification is replacing affordable housing and business locations under guise of “TOD”. (Graphic: Plaza Saltillo project via Austin Chronicle.)

Commentary by David Orr

David Orr, an Austin community activist involved with transportation issues, is a longtime environmental justice and transportation advocate.

Appropriate increases in density can be beneficial, but in the case of East Austin increasing density has become a major contributor to the expanding economic (and racial) segregation recognized by the Census Bureau and others as the worst in the U.S. Notably, the primary locus of the new construction is along the city’s only light railway commuter route (MetroRail), which uses abandoned the abandoned right-of-way (ROW) of a freight-rail spur into downtown.

Rapid changes in certain neighborhoods today are accelerated by rapid growth and massive investment in upscale development in and near downtown. What’s been billed as the tallest residential skyscraper between the east and west coasts is going up in downtown right now. East Austin is separated from downtown by I-35 which was built in that location to keep the black and Latino populations on “their” side of town. But downtown is hemmed in, and the real estate values are through the penthouse roof, so the Eastside is obviously the prime target for massive development.

The biggest redevelopment project in the city’s history is centered around a rail station (Plaza Saltillo) in a former railroad marshaling yard that for many decades has been surrounded by public housing, homes built in the 1920s and 30s, and funky old bars and auto mechanic shops. These are systematically being razed – entire city blocks every month or two – to make way for newly arrived, millennial code warriors who work downtown and want the dense urban streetlife environment. Small groceries, trendy bars and restaurants, and lots of parking garages for those shiny BMWs (“transit-oriented development”!) are going in block by block. From an environmental policy standpoint this is progress, as it will reduce auto commutes (not necessarily the number of trips) … but it’s mostly aimed at new residents moving in from places like Silicon Valley, with all that cash, and does little to address the need to increase densities in other areas near major employment centers.

For example, Apple’s huge complex is out in the boonies and not even on a bus route. But they have a huge parking garage that serves only their own staff. So much for Apple’s commitment to environmental concerns. There’s plenty of space around Apple’s complex for high-density development that could support transit, but so long as their well-paid staff drives in to work (and parks for free) and lives miles away in gated communities, there’s little incentive to the company to “think different” about their transportation situation.

In other parts of the city, especially in older neighborhoods, there is resistance to more density because folks want to maintain the quiet and quaint character of their ‘hoods. I appreciate that, especially in the case of Austin being one of the fastest-growing urban areas in the U.S., and the desire of folks to stay in their (often historic and) well-maintained homes.

Meanwhile there are large swaths of lower-cost, low-density land in the “old” sprawl zones that should be targeted for high-density redevelopment, but were leapfrogged by developers building upscale projects in the fast-disappearing ranch lands in nearby rural areas. These older urban fringe areas are disdained in part because they’re near lower-income neighborhoods that were middle-class subdivisions only 20 years ago, and in part because the employment centers were allowed to build in the hinterlands, leaving these low-density, affordable areas largely bereft of investor interest. At least there are still some areas where low-income people can still afford housing, even if it is half their monthly income.

Property taxes in Texas are high, especially in high-income counties like ours, as the state has no income tax and deals with funding for poor counties’ schools by taking from the rich counties (i.e. forcing them to raise property taxes to support other counties) and redistributing the wealth to those counties with low tax bases. Thus property taxes in our (relatively “wealthy”) county are high – even for poor people – exacerbating economic pressures to sell private homes (many of which are paid off and/or rented to low-income residents) for big redevelopment. We might call this a Texas-Style 21st-century Urban Renewal program (a.k.a. “Negro Removal,” as the old urban removal programs were known to activists of the mid-20th century).

What does all this mean for transit development? It means real estate interests aren’t interested in it because they’re focused on adding Lexus Lanes to area freeways to accommodate (in their minds) wealthy commuters and tourists going downtown.

In addition to auto-oriented development, the state and anti-transit activists have made it difficult to build light rail at all, much less in areas where it’s needed most, but where redevelopment investment is low. Dallas now has more miles of light rail than any urban area in the U.S., and the so-called “green” city of Austin has only one piddling DMU two-car commuter line that can carry only a few hundred riders per hour at peak time, often leaving riders standing at the station to wait for the next train (headway around 1/2 hour). Bus routes offer infrequent service in most areas if they’re served at all, and provide few direct connections to two new express routes billed as “bus rapid transit” (BRT) but which operate almost entirely in congested auto traffic lanes. The city just passed a $750 million bond issue that will benefit road projects but provides near-zero funding for transit improvements.

Bottom line: Austin’s reputation as an “innovative” city is belied by its failure to implement effective, bona fide transit-oriented development (TOD) projects in areas that are ripe for redevelopment and that don’t negatively impact the limited supply of affordable housing stock (disproportionately occupied by people of color). The injustice is not only economic and social, it’s environmental.

It’s a joke to think of Austin as progressive when you see developers dictating land use to the city, and the city addressing the affordability crisis by allowing these developers to avoid incorporating affordability into new projects even as they demolish existing affordable neighborhoods. The powers that be control the transit agency’s board, dictating policy to Capital Metro, ensuring the agency won’t put up a fuss or make “unreasonable” demands – such as pushing the city to require redevelopment of the older sprawl zones before permitting new sprawl. Austin lags far behind many other cities in terms of equitable, environmentally sensible transportation services, and it doesn’t look as if that’s going to change any time soon.

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Baker: Connecting some dots on Austin’s urban rail planning

24 August 2014
Graphic by ARN.

Graphic by ARN.

By Roger Baker

Roger Baker is a longtime Austin transportation, energy, and urban issues researcher and community activist. The following commentary has been adapted and slightly edited from his comments posted by E-mail to multiple recipients in June.

How did Project Connect come up with their $1.4 billion rail plan? Let’s take some known facts, and connect the dots. The dots in this case were partly the political momentum behind a new hospital district, combined with a new Opportunity Austin/Chamber-of-Commerce-recommended Austin growth policy.

We know that in 2008, a city consultant, ROMA, recommended that the proposed light rail corridor be moved east to the San Jacinto Corridor (ultimately connecting several years later to the Red River corridor), as opposed to the previously-assumed Lamar Corridor alignment. See, for example:

http://www.austinchronicle.com/news/2008-04-25/616178/


Original urban rail "circulator" system in 2008 map of ROMA consulting team plan, contracted by City of Austin.

ROMA streetcar circulator map from 2008, precursor of urban rail (light rail transit) plan. Map: ROMA, via Austin Chronicle. (Click to enlarge.)


Next, we know that State Sen. Kirk Watson in 2012 announced a plan to develop about $4 billion of future medical facilities and training in the area of Brackenridge and the newly announced Dell medical training center, which would be along this same San Jacinto-Red River corridor. It is pretty obvious that to meet this ambitious goal, to handle this scale of future anticipated development, the existing roads along this corridor could not meet the projected travel demand. I pointed that out in an earlier article here:

http://www.theragblog.com/metro-roger-baker-the-proposed-austin-light-rail-plan-as-i-see-it/

How did the urban rail plan get to Riverside? Here is a downloadable audio clip with Project Connect personnel pointing out that the city sees itself as having an unfunded mandate to provide rail on the Riverside alignment in order to meet the city’s future growth goals in that area:

https://docs.google.com/file/d/0B9kg5NdhKh8RYTM0dzQ4ampmeWs/edit


East Riverside development plan, promoted by City, is a bonanza for powerful real estate development interests. Gentrification is replacing lower-cost affordable apartments with expensive condos and upscale commercial and office developments, many with premium river views. Map: City of Austin via Goodlife Realty.

East Riverside development plan, promoted by City, is a bonanza for powerful real estate development interests. Gentrification is replacing lower-cost affordable apartments with expensive condos and upscale commercial and office developments, many with premium river views. Map: City of Austin via Goodlife Realty. (Click to enlarge.)


Another problem for the medical district was that Texas state funding could not pay for the medical center without a big boost from local Travis taxpayers. This demanded the promotion of a hospital district tax. See, for example:

http://www.kirkwatson.com/the-med-school-solution/

…Ever since Austin state Sen. Kirk Wat­son first unveiled the idea at a Real Estate Council of Austin event last September, regional agencies and governments have scrambled to find funding possibilities for the massive project, which could run the involved parties (all told) as much as $4.1 billion over 12 years. At last check, the University of Texas is on board for at least a $25 million annual contribution that would climb to $30 million over the first eight years of the school’s existence. Central Health, according to the Statesman, would cough up about $35 million annually over 12 years – or a total of $420 million. The Seton Healthcare Family expects to provide nearly $2 billion, including $250 million that would ultimately result in a replacement of its aging but centrally located Brackenridge hospital facility…

But to make it all work, Central Health is asking for a tax increase, to be placed before voters on Nov. 6. Watson asked for a raise of five cents per $100 of property valuation; Central Health’s board obliged, endorsing that increase, which would bring the district’s rate to just over 12 cents for every $100 of property valuation. In dollar figures, that would mean (if voters approve) that someone who lives in a home valued at $200,000 would see an increase of $100 on their annual tax bill…


Simulation of future UT medical school development, providing expansion opportunities for University of Texas, Seton medical interests, and other real estate development investors. Graphic via KUT.org.

Simulation of future UT medical school development, providing expansion opportunities for University of Texas, Seton medical interests, and other real estate development investors. Graphic via KUT.org. (Click to enlarge.)


We know from the following document that the city of Austin is bending over backwards to maximize Austin area growth through relocation, and jobs recruitment to the Austin area.

http://www.austintexas.gov/news/city-releases-report-economic-incentives

As we can see, the City has a very well-developed industrial recruitment policy outlined in this document, which coordinates with the Chamber of Commerce, targets key industries to recruit, and gives tax breaks when certain criteria are met. The city takes its lead from the “Council Special Committee on Economic Incentives”, which in turn takes its lead from Opportunity Austin, and the Austin Chamber of Commerce, as we see in this lengthy presentation. It begins by lamenting Austin’s slow growth!

http://austintx.swagit.com/play/08272012-504

We now see unsigned blogs promoting the same maximum Austin growth recruitment as official policy:

http://www.austintexas.gov/department/about-imagine-austin

What are the specifics of Austin growth recruitment policy? The policy is to prefer that at least 25% of the jobs recruited into this area go to Austin residents, but if not, it is no deal breaker. Jobs that pay at least $11 an hour would be nice, but this too is considered optional. This is taken from page 9.

http://www.austintexas.gov/sites/default/files/files/EGRSO/EGRSO_Report_on_ED_Policy_Final.pdf

REPORT AND RECOMMENDATIONS ON THE COA ECONOMIC DEVELOPMENT POLICY

Motion #5:

Change the Threshold for Extraordinary Economic Impact within the Firm-Based Matrix to include other items

The Threshold for Extraordinary Economic Impact has been used within the Firm-Based Incentive Matrix as a means for providing additional economic incentives for significant economic development projects.

Currently, if a company meets one of the four criteria within this section of the matrix, then the company is eligible for an economic incentive of up to 100% of the property tax generated by the project (see Exhibit A, Section 3 and Section 4).

Current threshold criteria include these four items:

• The firm is in a targeted industry;
• The firm is involved in leading edge technology;
• State economic development funds are available for the firm; or
• The firm will generate 500 jobs or more.

The threshold criteria allow flexibility for various economic incentive options to be considered for projects that have an extraordinary economic impact. The flexibility allows Austin to remain competitive for highly sought after projects. Examples of prior significant economic development projects include Samsung and Apple. In both cases, the Austin City Council approved 100% property tax rebates for a prescribed number of initial years…

This is all predicated on the perpetuation of the Austin tech bubble, which is really a regional manifestation of a national tech bubble. Continuing Federal Reserve stimulus is leading to asset bubbles, which are reflected in the NASDAQ’s mostly-tech growth in particular. How long before the tech bubble driving Austin’s current feverish growth and gentrification deflates is anyone’s guess, as Fortune recently pointed out:

http://fortune.com/2014/05/08/yes-were-in-a-tech-bubble-heres-how-i-know-it/

I have recently pointed out and discussed in detail the unsustainable nature of Austin’s currently-booming growth here:

http://www.theragblog.com/metro-roger-baker-the-rise-and-rise-of-austin/

This accumulation of material may help to provide a plausible political basis behind Project Connect’s rail plan. I personally have little doubt that Austin is in the midst of an unsustainable high tech growth bubble, and that the future travel demand numbers that Capital Area Metropolitan Planning Organization (CAMPO) feeds Project Connect to justify its rail corridors are largely wishful thinking. Demographic forecasting, like economic forecasting, exists to make astrology look good by comparison. ■