"When the righteous are in authority, the people rejoice;
But when a wicked man rules, the people groan."
The Good: Mayor Adler released his 'affordability' plan over the weekend. Step 1 is to build at least 100,000 new units of housing over the next decade. We're cautiously optimistic:
Mayor Steve Adler contends the underlying issue is simply that Austin remains too far on the wrong end of the supply/demand curve. He said the unprecedented building boom along places such as South Lamar Boulevard and East Riverside Drive were bound to come up short. Too many people are moving here for those projects to make a dent.The Bad: "Proposed city budget includes tax, fee hikes."
His solution: Austin needs to decide how many additional homes and apartments it wants over the next decade, then craft city policy to meet that goal. A starting point for the discussion: 100,000 more units over the next decade.
“Even without knowing the exact number, it’s clear we need to deal with the supply/demand mismatch,” Adler told the American-Statesman. He said that only by establishing an actual goal can Austin clear the notorious tangle in its permitting process — which hits both big developers and people trying to add a screened porch — and, more broadly, improve a city code that remains the subject of much debate.
On the 100,000 figure: that comes from the Real Estate Council of Austin, which issued a report that, as the Austin Business Journal first reported in January, “laments that most of the housing being delivered close to the city’s largest employment core in downtown is in the form of luxury apartments, upscale single family houses on large lots and high-priced condominiums.”
Real Estate Council president Ward Tisdale recently Tweeted out a Citylab article with the headline, “How San Francisco Progressives Betrayed the City They Love.” Gabriel Matcalf, the president of an urban-policy think tank who wrote the piece, argues that liberals traditionally wanted a city where everyone from a unionized trash collector to a Somali refugee could live (and afford to live), but failed to notice no-growth policies working against that goal.
City management is proposing a budget for fiscal year 2015-16 that includes 85 additional police officers, 12 new paramedics, 19 new 911 call takers and 27 new employees for the beleaguered Development Services Department.Austin Affordability has deeper analysis:
Under a proposal presented this morning to City Council, the owner of a median-priced home will see taxes, fees and utility bills increase by a total of approximately $11.30 a month, according to Elaine Hart and Ed Van Eenoo, chief financial officer and deputy chief financial officer, respectively.
The proposed budget features a 6 percent homestead exemption and $740,000 in rental assistance. It also includes 347 new staff positions, a 3 percent civilian wage increase with midyear implementation of market adjustments and pay increases for sworn personnel as outlined in labor contracts.
The largest staffing increases in the proposed budget are for the Austin Police Department, Austin Public Libraries, the Development Services Department, the Aviation Department, the Transportation Department, the Austin Convention Center and Austin Resource Recovery.
The budget would create 48 new positions to operate the new central library – which is scheduled to open in November 2016 – and fund eight new code compliance officers. It includes $1.1 million for the 13 mayoral and Council staff positions that Council created earlier this year.
We have all known since the spring that property tax appraisals shot through the roof for most Austin homeowners, to the tune of mid to high double digits in many local zip codes. So, my approach to analyzing the taxpayer impact of the new budget will be different from the spin that appears in the budget’s executive summary. The word “affordability” appears a total of 8 times in Volume One, while the word “tax” appears 290 times, and “fees” appears 134 times. Here is the opening statement on the first page:The Ugly: The second public hearing on BBQ regulation will occur this afternoon at 4.
“This budget will raise more total property taxes than last year’s budget by $36,413,252 or 7.7%, and of that amount $13,926,299 is tax revenue to be raised from new property added to the tax roll this year.”
It is easy to see from those figures alone that the City intends to spend more money much faster than the growth in new population. Imagine what would happen to the tax impact on long-term residents if that trend continued for the next 10 years. Another disturbing tidbit is that the City Manager proposes adding 347.4 new staff positions, which is more than double the number of 151.25 positions that were added last year. Also, utility and fee increases averaging $7.98 per month are included in the budget.
We have been told that the City Manager’s budget proposal calls for a tax rate increase from 48.09 cents to 48.14 cents per $100 valuation. But that doesn’t tell us the percentage increase above the “effective rate,” which would take the appraisal increases into consideration.
Bottom Line: We're encouraged that Mayor Adler's primary 'affordability' focus will be to streamline the permitting process to increase the supply of housing, but if Council thinks these tax hikes are going to fly in the current political climate, we eagerly await next year's elections.