City's request for redevelopment proposals provides for including more affordable apartments, condos among any built.
By Kate Miller Morton
AMERICAN-STATESMAN STAFF
Saturday, February 23, 2008
City leaders have urged developers to build more affordable housing downtown with little success. Now, Austin plans to put its money where its mouth is with the upcoming sale and redevelopment of the Green Water Treatment Plant and nearby Austin Energy property.
Blunting the developers' argument that land and building costs downtown are just too high, city officials plan to give them no choice but to include low- to moderate-priced housing in the redevelopment of the nearly four city blocks and as a result almost certainly will make less on the land sale.
"We're not in the business of making money," Council Member Brewster McCracken said. "We're in business to achieve public values and goals."
The city also plans to directly subsidize additional units for even lower-income families and dedicate 40 percent of the property taxes generated by the redevelopment project to its affordable housing fund.
"I just think it's an opportunity to have much of both worlds: a lot of tax base delivered, hopefully a significant measurable one-time capital gains in the land sale and then a series of other community goals," Mayor Will Wynn said.
It is unclear how many low- to moderate-priced apartments and condominiums will be built or how much it will cost the city and the developers chosen for the project.
The city is not dictating the size or type of development in the requests for proposals scheduled to go out next month.
But developers will be required to reserve 10 percent of all rental units for households making no more than 80 percent of the area's median family income, or $41,760 for a one- to two-person household.
Market rates for one-bedroom apartments downtown currently run about $1,520 a month, at least $350 more than the targeted households can afford to pay according to a recent report by ROMA Design Group and HR&A Advisors, city consultants charged with writing a new downtown plan.
But developers are under no obligation to build any apartments in the project, making it difficult to determine how much that requirement will knock off the sales price.
"I think it's really unknown right now, because it's hard to get a feel for the magnitude," said Tim Hendricks of Cousins Properties, which plans to pursue the project. "Are you going to do 50 units of rental or 300 units? I think it's way too early to evaluate the impact."
The city's option to form a public-private partnership with the developer is expected to ensure that some low- to moderate-priced housing is built, but it has not indicated how much money it is prepared to spend.
City officials estimate the amount of property tax dedicated to the affordable housing fund could yield as much as $1 million a year if developers build the maximum allowed on the site, but developers frequently build less downtown.
The city-owned property generates no tax revenue now.
Less costly housing is just one of the community goals that will be written into the development agreement to be paid for by both the developer and the city.
Green building, public parking, wide sidewalks, urban design, bike and pedestrian paths and street improvements are also expected to be included.
But more affordable housing is likely to be the trickiest to implement and the issue about which the community is the most passionate.
"The public has spoken on this and they said in the downtown plan in the survey that the city conducted that affordable housing and diversity downtown is one of the five top public priorities," attorney and housing advocate Heather Way said.
Way and group of fellow housing advocates sent a letter to council last month urging them to incorporate at least 20 percent of the project's housing units within reach of households making no more than $35,000 targeted to the downtown work force.
The current building boom has added thousands of apartments and condos, but just 176 units downtown are within reach of people of more moderate means, and 164 of those are set aside for low-income senior citizens in an aging city-owned building.
In recent years the price of new one-bedroom condos has ranged from about $190,000 to $560,000.
A one- or two-person household making 80 percent of the area's median family income can afford a condo priced at no more than $87,930.
The city plans to choose a developer in June.
kmorton@statesman.com; 445-3641
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Retail, office and living spaces are rising east of the water plant.