City of Austin spends millions to buy Malibu apartments in North Austin (sales, real estate)

[orbius]

Malibu surfs to $33.4M
(Austin Business Journal) 6/15/2010

AUSTIN (Austin Business Journal) - In what city officials are touting the largest deal of its kind funded by stimulus dollars in Texas, a New York-based housing company plans to convert a 476-unit complex in North Austin into all affordable housing units.

The Mulholland Group LLC (TMG) announced the closing and acquisition of the Malibu Apartments located at 8602 N. Lamar Blvd.

The $33.4 million investment by the company includes $15.4 million in tax credits from the Texas Department of Housing and Community Affairs and $3 million from the City of Austin Affordable Housing GO Bonds — making this the largest exchange funding project under the American Recovery and Reinvestment Act in the state of Texas and possibly in the country to date.

The rehabilitation of the complex will include renovations to the entire property of 21 buildings, including 48 new accessible and ADA units, new amenities and features such as a community center, state-of-the-art fitness room and classroom enrichment space to provide programs and services that enhance the quality of life for existing and future residents.

The estimated construction work is valued at more than $12 million. The redevelopment project is expected to initiate construction within the next 45 days with an 18 month construction schedule.

It is anticipated to generate approximately 150 construction related jobs and retain approximately 10 permanent jobs for the Austin community.

What the hell is this all about some slum lord get paid off by the city and after the renovations are performed the city will hand it to some other company? Not before millions in tax credits and public cash are thrown around at the new owners. They're going to use the money to build a fitness center among other things?

Whole thing sounds dodgy to the extreme.

[jobert]

Do you have a better idea about how to create affordable housing in Austin?

[TedH71]

When the Dell company started going downhill, house prices went down quite a bit. The main key to the huge housing price increase was Mr. Dell! His lackeys were buying/renting houses and not blinking at the prices so the greedy landlords/sellers were chomping at the bit to increase prices and to see how far they could get away with the increases. Time to say ENOUGH!

[orbius]

I just think its absurd to reward a slum lord, I've heard the Malibu apartments are some of the worst in Austin.
Thats my first complaint. Oh your complex is a blight on the community and has become a haven for crime and everything bad.
We're now going to reward your bad behavoir by paying well over market rate with public money to buy your dump. We're then going to take this building bought with public money and hand it to a for profit corporation to run. We're then going to throw even more tax payer cash at this company, I'm sure they'll not siphon money off and cheat anyone!
That is what is dodgy, there are so many pigs at the trough on this deal you can be guaranteed the tax payer is getting ripped off. And you can bet that lots of politicians palms are being greased in this whole deal to make deals with the right corporations and real estate people.

Texas politics, got to love it.

Also if apartment rentals are so high that people with average retail/service jobs cant afford to live in the city maybe its time to actually sit down and examine how our sky high property taxes are making the city unlivable for a good % of the city. *gasp* A state income tax might be necessary to make housing affordable for people making an average wage.

[jobert]

Originally Posted by orbius

Also if apartment rentals are so high that people with average retail/service jobs cant afford to live in the city maybe its time to actually sit down and examine how our sky high property taxes are making the city unlivable for a good % of the city. *gasp* A state income tax might be necessary to make housing affordable for people making an average wage.

Sorry to disagree again, but high taxes are what have kept housing affordable in Austin. If we eliminate property taxes, then housing prices will fill the void. Throw in a state sales tax, and everyone gets nailed, while they still have to end up paying more for housing. The latter scenario will only benefit existing homeowners who bought when the tax burden had kept the cost of housing relatively low.

[eileenkeeney]

We need to redefine how much housing it takes, to be considered "affordable" housing.

What we need are more rentals, that instead of offering the types of apartments now offered, offer more shared, or smaller space living arrangements.
What about places that offer a person a bunk in a barracks style set up? That should be considered "affordable" housing for someone who is single. It bothers me that this is how our Military often lives, yet HUD will buy more than this for a poor single person.
What about places that allow a family of 6 in a room that has 3 sets of bunk beds, a kitchen, and a bathroom?
Why not build places like this with very durable materials. Small but sanitary and durable should replace what we now consider acceptable affordable housing.


If the government is paying the bill, no private company should be profiting.
Both the socialist side of my brain, and the capitalist side of my brain, are very much against the socialized cost/privatized profit model, unless the item being purchased is invention or requires very complex hard-to-find skills. (If we did use government employees to do work paid for by the government, we would get a better idea of what percent of our economy is really the government).

I do like the idea of giving land to Loaves and Fishes to establish a trailer community.

[jobert]

Originally Posted by eileenkeeney

We need to redefine how much housing it takes, to be considered "affordable" housing.

I remember the article saying that a families making 60% of the avg. household income would qualify - the example used was family of 4 making 48K a year.. that's extremely low, if you ask me.

[orbius]

Originally Posted by jobert

Sorry to disagree again, but high taxes are what have kept housing affordable in Austin. If we eliminate property taxes, then housing prices will fill the void. Throw in a state sales tax, and everyone gets nailed, while they still have to end up paying more for housing. The latter scenario will only benefit existing homeowners who bought when the tax burden had kept the cost of housing relatively low.

Plenty of space to build is what has kept Austin real estate affordable. The developers just keep a few cows on their dormant land and dont pay property tax to begin with.

I wasnt talking about eliminating property taxes anyway.

In areas like Louisiana wheres theres low property tax a reasonable income tax and plenty of room to build nothing like you have described has happened there.

The fact is sky high property tax is a regressive tax. There is no more prime example of how regressive it is in this example. There is no reasonably priced housing in the entire city so the city is having to buy an apartment complex to house people who cant afford to live here but who the city needs to work here.

If this example doesnt make you sit down and reevaluate the tax structure in Texas then I dont know what to tell you.

[jobert]

Originally Posted by eileenkeeney

What about places that allow a family of 6 in a room that has 3 sets of bunk beds, a kitchen, and a bathroom?

We already have those. They're called "one-bedroom apartments".

[eileenkeeney]

Originally Posted by jobert

I remember the article saying that a families making 60% of the avg. household income would qualify - the example used was family of 4 making 48K a year.. that's extremely low, if you ask me.

So does "affordable" in this case really mean "subsidized" ?

All that will do is keep the cost of housing up for those who do not qualify for the subsidy.
It will prevent natural market forces from pushing the cost of housing to prices people can afford (unless there is really a shortage of available, not just affordable, housing).