Affordability Challenges And The Needed Reforms

By Bill Oakey – July 15, 2014

The following is my presentation for the South Travis United Democrats on July 15h.  It provides a good overview of affordability.

The Challenges

1. Lip Service to Affordability – Austin’s current political leaders pay lip service to affordability, but have shown no willingness to take meaningful action.  We need to elect a new City Council that will listen to the concerns of existing residents, and adhere to specific plans and policies that will improve affordability.

2. Taxes – The City financial staff are projecting a whopping 33.6% increase in property tax revenues over the next five years.  This rate of increase is simply unsustainable, because of stagnant wages and income inequality.

3. Gentrification – The City’s planning policies depend on accelerating gentrification in order to make room for tens of thousands of new residents every year.  If you want your voices to be heard, you need to speak up loudly and you need to vote.

4. Affordable Housing – Apartments and duplexes in the central core are being bulldozed and replaced by luxury units.  The goal of the Imagine Austin plan and CodeNEXT is density, density, and more density.  But very little of it is “affordable” for existing residents.  The argument that density in the urban core reduces sprawl is bogus.  It forces people out into the less expensive suburbs and increases sprawl.  And then the commuting expense becomes a burden.

5. Transportation – The Capital Area Metropolitan Planning Organization (CAMPO) estimates that it will cost $32.4 billion to build new roads, rail systems, etc. between 2015 and 2040.  That works out to $1.3 billion per year for the five-county area.  This assumes massive population growth, which of course is unsustainable because of the unrealistic cost projections and the lack of water.

6. Unfair Tax Appraisals – Commercial property owners are only being assessed at about 60% of the market value of their property.  It will take Legislative reform to fix this inequity.  We need to support Brigid Shea, who is leading that effort.

7. Public Engagement – For 28 years I have observed citizens waiting up to six hours to speak at City Council meetings.  And the public input allowed for consultant-driven planning processes is often blatantly ignored or given only a token nod.  It is time for the people to unite behind two critical reforms (See below).

8. Wasteful City Budgets – The City staff does not provide adequate transparency on budget balances throughout the year.  Spending is never tied to even the vaguest notion of the public’s ability to pay.  The status quo will price even more people out of their homes, unless we adopt some reforms.

9. Truth In Taxation – Every year at budget time, the City Council hides behind the “tax rate” and crows about “holding the line” on the rate.  You and I know that increased tax appraisals drive the taxes up.  It is long past time for a truthful, transparent process.  (See reform below).

10. Water and Electric Rates – Both utilities need to do more to control rate increases, and to slow down the freight train of utility add-on fees that are spiraling out of control.

The Reforms

1. Work for Good City Council Candidates – We all need to work hard to elect the best affordability candidates.  I strongly support Eliza May for District 8, Kathie Tovo for District 9, Laura Pressley for District 4, Ora Houston for District 1, Ann Kitchen for District 5, Mandy Dealey for District 10, and Steve Adler for Mayor.  Other endorsements will come later.

2. Taxes – The City needs to coordinate better with the other local taxing entities.  We can’t afford the level of spending and cumulative tax increases that keep pummeling us every year.  The City needs to phase in a general homestead exemption.

3. Gentrification – Instead of whispering about this problem under our breath, we need to insist on a valid study that looks at the issue head-on.  How do other cities deal with it?  What can be done to retain the ethnic and economic diversity that any city needs for a vibrant quality of life?  Let’s start with a broad-based campaign to raise the minimum wage, provide better job training, and create jobs that are in between service sector and high paying tech jobs.

4. Affordable Housing – This is a perfect example of a topic that gets good lip service.  Let’s ask local leaders to survey the housing, establish some goals, and implement a plan that delivers actual results.  Then post those results online so that everyone can assess the progress.

5. Transportation – Vote against the expensive urban rail plan.  It’s in the wrong location, according to most experts who have reviewed Austin transit plans for decades.  Let’s change the MoPac “Improvement” Plan to provide free access for carpools and private vanpools in the express lanes.  That’s how nearly every city listed on the MoPac website does it.

6. Unfair Tax Appraisals – We should invite AISD into the discussions, and bring them along with Austin and Travis County into the Capitol in January to insist on this reform.  And we need a statewide network of other communities to help carry the reform to victory.

7. Public Engagement – I have prepared a proposal for a Public Engagement Ordinance that would require the City to include public input in all planning processes in a meaningful and quantifiable manner.  The Austin Neighborhoods Council will consider a resolution supporting this proposal at an upcoming meeting.  The City should also adopt my proposal for City Council Agenda Reform, so that people can speak at designated times.  It is time for our voices to be taken seriously.

8. Wasteful City Budgets – Austin needs to preserve budget surpluses for holding down tax increases.  We need much better transparency on budget balances throughout the year.  Instead of funding unfilled vacancies at 9.7% of the workforce, let’s get it down to 5%.  Let’s eliminate fee waivers for profitable event promoters.

9. Truth In Taxation – I have proposed a “Taxpayer Impact Statement” that would be included in the City Budget.  It would show the true percentage increase in taxes above the effective rate.  In other words, the percentage increase above the amount that would keep revenues the same.  This statement would show the dollar impact on a wide range of home values.  And it would also include the increases in utility rates and fees.

10. Water and Electric Rates – Consider transferring this year’s budget surplus to the water utility to reduce the double-decker rate increase.  For Austin Energy, we need to adopt a cost of service model that does not penalize residential and small business ratepayers.  We lost that portion of the battle in the 2012 electric rate case.  We need a thorough review of all utility add-on fees, and a plan to reduce them as much as possible.

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One thought on “Affordability Challenges And The Needed Reforms

  1. eric

    Hi, I am seeing if you know of any resources to help me keep my affordable housing rentals. I am fighting my tax on some rentals I own, and have not had much luck. I don’t want to tell these families they have to move because the taxes just doubled. Can you contact me?

    Reply

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