3 BRILLANT IDEAS FOR KEEPING AUSTIN AFFORDABLE. Michael N. Casias My Brilliant City August 1, 2014

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1 3 BRILLANT IDEAS FOR KEEPING AUSTIN AFFORDABLE Michael N. Casias My Brilliant City August 1, 2014

2 NOT A PRETTY PICTURE HOUSING DEMAND TODAY 110 people moving to Austin every day 40,150 Annually 4,015 Moving into YOUR DISTRICT $326,998 Avg SF Home Price $1,500 Avg Rental HOUSING DEMAND YESTERDAY (2008) Comprehensive Housing Market Study 200,000 new residents since 2008 up 25% 39,000 Shortage for Incomes < $20,000 $240,000 Median Home Price up 90% $850 Avg Rent HOUSING DEMAND TOMORROW OUR EMERGENCY SOLUTIONS GO BONDS! $55 Million in 2006 $65 Million in 2013 SMART Housing Program Nonprofits and LIHTC Existing Stock Preservation Smart Growth, NPs, ECT, Imagine Austin THE PROVEN RECORD $55 Million 2,593 Units over 7 years 370 Units Annually $196.2 Million Additional Subsidized Leverage $96,799/ unit Would need $3.77 Billion for 39,000 units

3 AFFORDABLE HOUSING?? WHAT S IN IT FOR MY DISTRICT WHAT S IN A NAME Low Income, Affordable, Workforce, Mixed Income, the Projects Families, Seniors, Veterans, At Risk Apartments, Single Parent with Children INCOME LEVELS Austin MSA, $67,900 Family of 3 80% MFI, $54,300, nurse, engineers 60% MFI, $40,740, construction, higher ed 50% MFI, $33,950, govt, admin, teachers 30%MFI, $20,350, retail, service industry FAMILY BUDGET

4 BEST PRACTICES Denver, San Antonio, Fort Worth, Laredo BEFORE YOU SERIOUS ABOUT THIS? BECAUSE HERE IS WHAT YOU MIGHT BE GIVING UP Tighter Demand = Higher Land Cost and More Appreciation for and from Voters Who Already Own Maintain that country, sleepy neighborhood feel in the heart of the City where Most Vocal Voters have lived based on past elections. Even with 10-1, you must deal with this in Urban Core Workers serving Higher Income Neighborhoods remain out of sight, but they usually don t Vote Moves toward or maintains socioeconomic AFTER Homogeneity. Can focus exclusively on these following public amenities- parks, swimming pools, and golf courses vs. housing, social services, etc.

5 BRILLIANT IDEA # UNITS IN YOUR FIRST 100 DAYS WITH SURPLUS PUBLIC PROPERTY Fastest way to delivery most needed housing geographically dispersed HOW IT WORKS Use must meet a Public Purpose- Affordable Housing Land remains in Public Ownership and Public Control Does not depend on GO Bonds or Contingent Subsidies Public Housing Agencies vett Affordable Housing Providers Division of Responsibility between Public and Private Can tailor to Need vs. Market Housing can pay for parks, support services, public amenities Co-Developers can negotiate with neighbors for win-win CASE STUDY- Cevallos Lofts, San Antonio WHY OUR CURRENT POLICY FOR SURPLUS PUBLIC PROPERTY IS NOT WORKING 12th Street Urban Renewal Land Sales Cap Metro Decision NEXT STEPS AFTER Identify Potential in your District Surplus Property Ordinance HACA, AHFC, TCHA, ACCD, TCHD sign MOUs with Qualified Affordable Housing Providers

6 CEVALLOS LOFTS SAN ANTONIO, TX BEFORE Partner: Location: San Antonio Housing Trust Finance Corporation San Antonio, TX, 5 acres on public land Project Cost: $38,009,173, completed Jan 2012 AFTER Financing: Unit Mix: LIHTC Equity, Private Activity Bonds, City of San Antonio HOME and NSP funds, TDHCA ARRA TCAP Funds 252 Units Studio, 1 and 2 Bedroom 75% Market Rate/25% Affordable

7 CEVALLOS LOFTS SAN ANTONIO, TX PARTNERSHIP Cevallos Lofts, Ltd. A Texas limited partnership formed 5/2/2007 Document: LP Agreement dated 5/2/2007 EIN: (2007) For Profit BEFORE GENERAL PARTNER Cevallos Lofts GP, LLC A Texas LLC formed EIN: (2007).01% For Profit Special Limited Class B NRP Cevallos Lofts, LLC A Texas LLC formed 5/2/2007 EIN: (2007).01% For Profit INVESTOR LIMITED PARTNER The NRP Group, LLC 99.98% San Antonio Housing Trust Public Facility Corporation Sole Member AFTER

8 BRILLIANT IDEA # 2 JUDO THE MARKET WITH SMART HOUSING PROGRAM REWRITE Resisting a more powerful opponent will result in your defeat, whilst adjusting to and evading your opponent s attack will cause him to lose his balance, his power will be reduced, and you will defeat him. Jigoro Kano, founder of Judo WHY WE MUST TURN TO THE MARKET Everything we are doing today is a drop in the bucket Market capitalization dwarfs funding for affordable housing Market has the expertise to deliver housing most efficiently Affordable Housing Developers can t compete for land in the Austin market HOW DO WE STEER (OR JUDO) THE MARKET TO DELIVER 10%-30% ON EVERY PROJECT The math has to work so that the market makes just as much or more money delivering affordable. Not a moral issue. Sliding Scale Entitlements based on % of total units and deep targeting True Fast Track with Director Discretion over Development Review Department Heads, maybe Housing Czar or powerful Ombudsman Alternative Methods of Compliance De-Couple Parking from Housing Compatibility Variances where NPs/Plans call for housing Infrastructure Fees vary based on real cost- suburban vs. urban Real Density Bonuses for Affordable Housing AFTER CASE STUDY EAST 11 TH STREET NEXT STEPS

9 BRILLIANT IDEA # 3 POWER TO THE PEOPLE, BUT WITH POWER COMES RESPONSIBILITY Neighbors best to identify areas for affordable housing to reach targets HOW IT WORKS As part of a Plan Amendment Process, neighborhood analyzes demographic data provided by City to agree on a goal for additional affordable housing units, e.g., 2000 units over next 10 years. Neighbors identify parcels that could meet goal and estimated density on each. Neighborhood Reserve (NR) zoning that lays out community goals for the site, agrees to grant entitlements in exchange for meeting goal. Neighbors can withhold entitlements unless goals are met; Developers can predict that if they will meet goals, they will obtain entitlements CASE STUDY- Govalle/ Johnston Terrace Neighborhood Association WHY OUR CURRENT NEIGHBORHOOD TOOLBOX IS NOT WORKING AS WELL AS IT COULD Cottage Lot condos NEXT STEPS AFTER City sets up new Plan Amendment Process Or Neighborhood Initiates Or City Councilperson gets the ball rolling

10 BE PREPARED TO RESPOND TO THESE CONSTITUENT ARGUMENTS AGAINST AFFORDABLE HOUSING BEFORE YOU MUST PRESERVE OUR NEIGHBORHOOD CHARACTER MAJOR HEALTH AND SAFETY ISSUES WILL ARISE WE CANNOT SUPPORT ANY MORE DENSITY IN OUR NEIGHBORHOOD WE NEED AFFORDABLE SINGLE FAMILY HOMES NOT APARTMENTS WE HAVE SENSITIVE ENVIRONMENTAL FEATURES TOO MUCH AFFORDABLE IN OUR NEIGHBORHOOD

11 MORE BRILLIANT IDEAS (AKA LOOKING FOR AN INTERN) BEFORE 5 Brilliant Ways to Reduce and Avoid Traffic in Austin 10 Brilliant Ways to Address Obesity in our Neighborhoods 5 Brilliant Ways to Improve our Parks 10 Brilliant Ways to Stop Gentrification 10 Brilliant Ways to Support Latino Arts & Culture in Austin 5 Brilliant Ways to Turn the MACC into a World Class Cultural Center 10 Brilliant Ways to Improve Hispanic Quality of Life in Austin 5 Brilliant Ways to Save our Neighborhood Public Schools 10 Brilliant Ways Your Neighborhood Can Beat Developers 10 Brilliant Ways to Help Austin Stay the Music Capital of the World

12 CONTACT INFORMATION For More Information: Michael N. Casias