Council Recap: Clearing the Decks for 2021 in a City That Never Stops Growing

Photo by John Anderson

In a rare bright spot of calm for 2020, City Council wrapped up its final meeting of the year, usually long and contentious, before 10pm and without any major squabbles.

As the city prepares to begin shutting down its Protective Lodges, which since April have provided shelter, health care, and case management services to those who are experiencing homelesness and at high risk of complications from COVID-19, a contract valued at $7.5 million was awarded to Caritas of Austin to help transition ProLodges residents into different housing programs.

Caritas serves as the lead agency of the Best Single Source Plus collaborative of agencies tasked with reducing homelessness. As lead, Caritas will negotiate with the city to determine how the funds, part of the city’s allotment of federal CARES Act assistance earmarked for homelessness services, should be used while they’re still available. BSS+ member agencies are set to meet Monday, Dec. 14, to discuss among themselves a strategy for housing the roughly 275 people who are still staying at one of the five ProLodges.

Later in the day, Council gave final approval to a new Street Impact Fee program. This new fee will be charged to developers, at varying rates depending on where a project is being built, to help “pay for growth.” State law mandates that the fees can only be used on certain types of infrastructure needed to accommodate new development – like wastewater improvements, drainage facilities, and increasing roadway capacity.

City staff, boards and commissions, and stakeholder groups have been working through the state-mandated process to create a SIF since 2015, so many decisions had already been made ahead of Council’s final adoption. Discussion at the Dec. 10 meeting centered on an amendment from Council Member Natasha Harper-Madison to extend a grace period offered to developers from one year to 18 months. The amendment ultimately passed on a 7-4 vote (with CMs Leslie Pool, Ann Kitchen, Kathie Tovo, and Alison Alter against). The ordinance will go into effect on Dec. 21, but fee collection will not begin until mid-2022.

Austin Transportation Department’s Liane Miller, the lead city staffer working on the SIF, told Council that waiting an additional six months to assess the fee could lead to $25 million less revenue over a 10-year period. Miller noted this potential revenue shortfall would be more pronounced in the outer perimeter of Austin, where higher development activity translates into larger infrastructure impacts and thus higher fee levels. However, Harper-Madison and Mayor Steve Adler noted that even if the projection turns out to be accurate, it doesn’t mean those needed infrastructure projects would be unfulfilled; the city could seek more funds through a bond election, for instance, and then use SIF revenues to pay down the bond debt.

As is the case with many Council debates about land use and housing, the debate over the grace period turned on who benefits from new growth and who should pay for the costs associated with it. Harper-Madison argued that an increased grace period was warranted because projects already in the works have based their budgeting on what, in Austin, is already a costly and challenging fee and approval structure; adding a SIF could simply serve to raise rents and sales prices. “If ensuring we have enough housing that Austinities at all income levels can afford is truly the goal of the city,” Harper-Madison said, “then it’s important that we are mindful of how we might unintentionally hinder that goal.”

The counter-argument from the four CMs on the losing side, generally speaking, is that policies like a SIF, or increased levels of income-restricted housing in market-rate developments, shift the burden to developers and away from existing taxpayers. “The whole point of SIF is to help fund growth and to help us manage growth responsibility,” Alter said. “In my view, [Harper-Madison’s amendment] is not a compromise that helps us move forward in funding a transportation system.”

In other development news, Council delayed a vote directing staff to negotiate and execute a contract with a team led by Aspen Heights to redevelop the former HealthSouth site at 12th and Red River, south of the former Brackenridge Hospital campus. The city purchased the site when the HealthSouth rehabilitation hospital closed in 2017, making it one of the most valuable pieces of property in the city’s portfolio. It has been eyed by city leaders as one of the last and best places to create affordable housing near Downtown and the UT campus.

The Aspen Heights proposal, recommended by staff as the best of the four offers received, would build a 36-story residential tower and a 15-story office tower on the site. The residential building would include 348 apartments and 160 condo units, 25% of which would be rented or sold below market rate. Rental units would be affordable to residents earning 50%-60% of Austin median family income (that works out to $58,550 or less for four people); for-sale units would be priced affordably at 80% MFI ($78,100 for four). The office building would span a total of 170,000 square feet, including 25,000 sf of retail space and 18,000 sf devoted to a “culinary destination.” A 22,000 elevated plaza would connect the two buildings.

Development of a similar scale and type is envisioned by the master plan for the Brackenridge campus, owned by Central Health; the first building going up there, which will house UT Dell Medical School offices, is 17 stories. This all adjoins the soon-to-be-reopened Waterloo Park, the northern anchor of the ambitious Waterloo Greenway project along Waller Creek, and along with the nearby blocks in the Capitol Complex that are also being redeveloped vertically, creates the foundation of the city’s proposed Innovation District in Downtown’s northeast quadrant.

While Council generally supports the Aspen Heights proposal, some members advocated for a delay to allow time for more public input; at a work session last week, Tovo said the proposal could include more housing and less office space. The proposal is expected to return at a meeting toward the end of January.

Council did give final approval to a range of zoning cases that have been winding their way toward the dais for months, including approving historic zoning for the site of the old Baker School in Hyde Park – including its two surface parking lots. That went against recommendations from staff and the Planning Commission and, in effect, granted the property owners an additional $11,000 tax break.

The main motivation for not including the lots under H-zoning, though, was to keep open possibilities for adding housing to the Baker School renovation project, currently transforming the historic school into the new headquarters of Alamo Drafthouse. However, taking away those parking spaces would likely result in the property being under-parked per code requirements, which are important to many in central neighborhoods like Hyde Park. As the entire site lies within the Hyde Park local historic district, its preservation is already assured, but historic zoning enables the property tax abatement that is intended to offset the cost of that preservation borne by the owner.

As we reported earlier this week, the Watershed Protection Department purchased the adjoining Baker Field, where the owners had intended to build five stories of residential, for stormwater mitigation efforts. Watershed staff says building housing on top of the flood control pond is infeasible, but CM Greg Casar encouraged Watershed, Housing and Planning staff, and the property owners to meet one last time to try and figure out a way to build housing at Baker Field. “I’m frustrated [because] we were on a clear path to getting affordable housing there,” Casar said. “My frustration is not having a more direct conversation with city staff saying, ‘Hey, this piece of the property was slated to be affordable housing behind the Baker School.” Those plans were accounted for when the Drafthouse team bought the property from Austin ISD (after the city ended up not purchasing the site itself), and in a restrictive covenant that requires any housing on site to include income-restricted units, and in an agreement between the owners and the Hyde Park Neighborhood Association.

Richard Weiss, the Drafthouse’s consulting architect who is leading the restoration efforts at the school, said he had a lengthy conversation with Housing and Planning director Rosie Truelove about doing just what Casar asked for. For her part, Truelove said she has had conversations with the city’s Office of Real Estate Services to ensure her department is included in conversations related to land that could be used to fulfill the city’s housing strategies, to ensure cross-department planning is not siloed in the future.

Adler also indicated at the meeting that the city’s moratorium on most evictions will be extended into 2021, as a federal ban on evictions is set to expire at the end of the year along with the local protections. At the Dec. 10 meeting, Council extended its order requiring landlords to wait 60 days after notifying a tenant of their intent to evict before beginning legal proceedings. A report from the Princeton Eviction Lab showed that from March 15 through Nov. 28, Austin had 687 residential evictions – compared to more than 16,000 in Houston, where Mayor Sylvester Turner has declined putting in place eviction protections.