Will $250M make a dent in Affordable Housing in Austin? (Orange: section 8, apartment complex)

[austin-steve]

Here is a news story about how the $250M will be spent:
How $250M will be spent on affordable housing, if approved by voters | KEYE

One of the comments in the piece was that "1,000s" of new affordable units will be created. Really? Based on what math?

Some of the money will be used to buy expensive land in West Austin where cost of living is high. Once we (the City) has the land, is it just going to give it to a developer to build low cost rental housing? Or will there be a scheme to restrict the rents charged to those earning below median income?

It costs about $75K per unit to build an medium size, medium grade apartment complex. Even if the city paid a developer to build on land it already owns, $250M would build only 333 apartment city-owned units. Then what? Let Section 8 people live there, or simply lease to people at reduced rents (subsidized forever by taxpayers) who come off what will immediately be a years-long waiting list?

I don't know, this seems to me like a drop in the bucket that will increase home owner taxes (ironically making owned homes less affordable) while not even scratching the paint on the stated problem.

Part of the money will go to helping elderly people make repairs that allow them to remain in their homes longer. That's great until the old Orangeburg sewer pipe needs to be replaced and the city disallows cutting through the sacred tree roots, making it a $15K sewer line replacement instead of $1,500 straight shot.

Is there another way to do the math that reveals a meaningful impact on affordability that the $250M will accomplish? To me, this is just more incompetence from City Council and wasteful spending. I will vote against the bond this November.

[Trainwreck20]

To be fair, it would be 3,333 units, not 333, using your math.

[Aquitaine]

I don't know how I feel about these because it smacks of the same type of stuff that the Bay Area and NYC do where you just get long lists of people anointed to receive what sounds like a good deal and ends up being a bad one after years of neglect. But there are some differences.

In Mueller, the affordable housing program is not "set aside a chunk of Mueller for only affordable homes" (though there is maybe one block that is like this) but "mix in affordable homes and apartments with market units." So you dodge some of the issues where you have an entire building that is a resource drain with landlords incentivized to never fix anything.

Aldrich 51 has a lot of affordable units and the waiting list was 1-2 months last I looked. But AMLI and Aldrich 51 both opened up around the same time and there are a lot of vacant units, so I don't know whether this will be temporary and they'll get backed up as well. Wildflower Terrace has been around for a while and still seems to measure their list in months rather than years.

It doesn't dodge the problem of "pushing up the middle" on the bell curve. The net effect of this program here is that the "low end" of affordability in Mueller is in the $150k-$190k range. The next level up is about $400k -- there's maybe very rarely a condo in the high 300s. That's a huge jump, and there are restrictions on what you're "allowed" to earn if you get one of the affordable homes. To use an exaggerated example, should you marry an heiress a year after buying an affordable home, you are in for heaps of problems. That heiress better get you up to $400k pronto or else you are moving further out.

I guess I don't know how to measure success. Is adding $100k to the average market price an acceptable trade off if it means a quarter of your neighborhood is filling out your work force with people who otherwise couldn't afford to live nearby? There are definitely some good points to this program but they seem dependent upon it being a very local (neighborhood) program. If you tried to do it everywhere then you're just exchanging one set of people who can't afford to live there for a different set of (middle class) people who can't afford to live there.

I wish this were accompanied by a commitment from the city to reduce barriers to building affordable (in the generic meaning) units. The city of Austin isn't to be blamed for the demand, but they sure are to be blamed for building codes that drive up the cost of doing anything within city limits. Then they get to rush in to the rescue with spending more of other people's money on solving a problem for which they share responsibility in creating.

[Trainwreck20]

I am still stuck at the fundamental issue (more eloquently fleshed out by Aquitaine) -

Affordable housing removes units from the available (or potentially available) supply, thereby driving up costs for the remaining units.

If this money was spent to increase supply, then this might be a partial solution, but the free market will do the same thing if allowed to - the city has to allow more dense development somewhere. Targeting a specific income bracket is less effective overall than just letting the costs come down overall to allow that income bracket to partake in the open market.

[austin-steve]

Originally Posted by Trainwreck20

To be fair, it would be 3,333 units, not 333, using your math.

Good catch. My mistake. That actually does make a difference I think. At least more so than 333.

[Austin97]

what would cost us nothing would be to allow 500 SFH to be torn down to build 8 plexes. Expedite the permit process. The city would make money in the process and bring many more units online. This would cost taxpayers zero.

[Antny12]

Everybody always wants to jump on everyone’s throat who doesn’t want these developments (section 8 housing look a likes) in their areas but boy once they start coming to their “hood” does their tone change.

Want to see an uproar? Put the affordable housing in west Austin- it won’t make it at the polls anyways. Anything that has to do with affordable housing or public transportation in that area won’t make it past the drawing board.

Anyways, where did you see that the plan was to purchase land in “west” Austin to build affordable homes? Read the article and either wasn’t there or I missed it.

[Aquitaine]

to allow 500 SFH to be torn down

are there 500 SFH begging to be torn down? (this is not a flippant question)

I can imagine there are plenty of people left to their own devices who would add a garage apartment or remodel, and there some developers who would buy up re-zoned lots and build 8-plexes, but I have a tough time seeing a whole street of people lining up to give up their houses in Hyde Park in favor of an 8-plex.

[verybadgnome]

Given that the projected shortfall in affordable housing is $6B this will take care of less than 5% of the problem. Does that mean 20 more rounds of this? Actually it is probably even more costly than $250M for that <5% as I doubt they have calculated the property taxes lost converting private property into public. As others pointed out I also don't think they've done any economic analysis of how this affects subareas that have these developments and the reduction of market rate units from being crowded out. The current city council feels a lot of guilt - it's like a drug for them - so at least it mollifies them some and appeases the activists at the same time.

By my back of the napkin math I get about 1,250 units costing about 200k each given that it costs about $200 sq. ft. It can't be much cheaper than that due to living wage labor costs, regulatory costs, land costs, DBE compliance, and extras (on-site day care, educational facilities, etc.) that come with these projects.

I'm voting early and voting no


https://communityimpact.com/austin/c...dable-housing/

[RoamingTX]

Originally Posted by Antny12

Everybody always wants to jump on everyone’s throat who doesn’t want these developments (section 8 housing look a likes) in their areas but boy once they start coming to their “hood” does their tone change.

Want to see an uproar? Put the affordable housing in west Austin- it won’t make it at the polls anyways. Anything that has to do with affordable housing or public transportation in that area won’t make it past the drawing board.

Anyways, where did you see that the plan was to purchase land in “west” Austin to build affordable homes? Read the article and either wasn’t there or I missed it.

Just imagine if they put it near you.