One of the talking points that came up repeatedly in the occupancy restriction debate in front of City Council is the fear on the part of many homeowners of being outbid. Landlords in some neighborhoods can make more money renting to many unrelated people than to a single family. Developers can make more money developing for landlords to rent to many unrelated people than developing for a traditional family. There is significant (property) value to a homeowner in having the right to rent a house out to unrelated people or the right to sell your home to another landlord who will, or to a developer who will remodel for renting. Why then, would homeowners be lowering the value of their homes–for many people their most valuable asset–by collectively seeking to deny themselves this right? Because they want to live in the homes, and, if they choose to live in them, they are not exercising that right anyway. (Put in kinder words: “We live here. Our neighborhood isn’t just about profit.”) They perceive that there is a positive amenity in living in a neighborhood with fewer unrelated people per home (“a family neighborhood”), so by denying their neighbors a right they weren’t going to use anyway, they are better off.
But property taxes are assessed not on the potential value of a home if it had all its development rights, but on the assessed value. By lowering the occupancy rates, the city is lowering the values on these properties, and therefore lowering the taxes assessed in these neighborhoods. Note that this isn’t merely because new development would raise the values of the new homes, but also because the land the existing homes sit on would have greater value as a potential development site. I don’t mean to say that the reason why neighbors were up at City Council fighting against roommate houses was in order to lower their tax bill at the expense of all the other taxpayers in the city, but it certainly would be the effect if the ordinance were to pass.
But the occupancy restrictions are a relatively minor restriction compared to the simple fact of the single-family zoning prevalent throughout Central (and the rest of) Austin, the urban straightjacket, as Charlie Gardner calls it. When the University Neighborhood Overlay (UNO) was created in West Campus allowing greater density, the property values of all properties jumped pretty much instantly, because the right to develop them was valuable, whether put in use or not. By choosing to limit development on the interior of central city neighborhoods, residents in those neighborhoods are collectively waiving those development rights and choosing to lower their own taxes, at the expense of the rest of the city’s taxpayers. The effect is also present in single-family zoned areas in outer Austin, but its much smaller there, because the right to develop in outer Austin is less valuable than the right to develop in central Austin. If the whole of Austin were to upzone (i.e. allow more dense development) tomorrow, it would be central Austin that would see the most new development.
If you read the piece linked above, you know that I see the single-family zoning in the urban core as the central problem at the core of many of our problems, so my preference would be to upzone. But in the absence of that, I believe that we should at least give neighborhoods the option of upzoning and assess taxes on the value they waive if they don’t take it up.
I testified against a proposal to reduce the maximum number of unrelated people who can live in single-family structures (6 to 4 in single-family homes, 3 to 2 in duplexes, and 4-2 to 2-2 in Single-family / garage apartment pairs). Earlier on this blog, I made an argument about this from an affordability standpoint. But at the City Council hearing, I decided to speak about this from a much more personal perspective.
To see my testimony at City Council on Occupancy Reductions, click here and skip ahead to 50:50.
Or you can read the text below the fold: Read more…
In November 2013, Austin voters passed a 10 -year, $65m housing bond. I never thought this bond would do much to affect affordability; Austin is expensive because it’s like a game of musical chairs with more players than chairs. Compared to the size of the game, the bond was tiny*.
But just three months later, the Austin city council is threatening to take away any possible affordability gains by, at a stroke, eliminating one of the major options for affordability in the city: sharing a house or duplex with enough friends to bring prices down. (To read more on the issue, see this facebook event.) To stretch the musical chairs analogy a little far, it’s as if the city has decided that, even though there are thousands of people on the outside looking in, unable to find chairs, the best option right now is to reduce the number of friends allowed to share a bench. The results of this ordinance will be to scatter some of those who want to share houses to currently affordable parts of the city, raising prices there, and price others out of the city entirely. Taken together, the net effect of the bond and ordinance will be to: 1) raise taxes, 2) use that money to fund quality-of-life issues for the squeaky wheel homeowner minority in university-adjacent neighborhoods. If you, like me, feel like this is a really bad idea, I encourage you to take action, writing to City Council or speaking in front of the Council.
* The city says that the previous bond of about the same size funded 2,409 units over the course of its 8 year life or approximately 300 new units per year, in a city of 850,000 people. By contrast, the private market added 11,834 units in 2013, according to the Census Bureau. Screenshot here; data here.
Today is the first day that the 101, 1L, and 1M bus routes have been consolidated into the 1 and 801 routes. Let’s look at the new face of service along Austin’s central transit corridor: between downtown and UT. There’s a lot of choices: routes 1,3,5,19, and 801 all have service between downtown and UT’s Westmall, for a total of 8 buses leaving from downtown for Westmall from 1PM until 2PM today (Sunday). Not as good as peak UT shuttle service (15 buses per hour), but certainly not bad for Sunday service. Given how frequent they are and how variable on-time performance and walk-time from home to the stop can be, there shouldn’t be any point in looking up a schedule. 8 buses per hour is past the tipping point where it’s more effective to just show up and wait for the next bus than plan which bus you intend to take.
Varying Departure Points Hurts Frequency
If I were travelling from Westmall to downtown, that is exactly what I would do. Unfortunately, my effective frequency northbound is much lower. Of those eight buses, two of them are route #3, which pick up on Brazos. Three of them are route #801, which pick up on Lavaca. One each are route #1 and #5, both of which pick up on Congress. The last one is a #19, which picks up on Colorado or further north up Congress. No stop downtown has Westmall-bound buses coming more often than 3 per hour. From 8 per hour to 3 per hour changes transit-riding from being an easy, automatic, show-up-at-your-stop-and-don’t-worry mode of transportation to a riding-is-an-art mode where you have to keep an eye on the clock and the schedule, know which routes tend to run early or late, and have lots of knowledge of which routes run where and when.
There’s no good reason
During the years of road work on Brazos, routes 1L, 1M, 3, 5, and 101 all used to travel together up Congress, creating exactly the kind of easy transit corridor I’m discussing. Disappointingly, though, Capital Metro never spent the energy promoting the ease of use of this central transit corridor at the time as they did promoting the much-less-frequented Red Line. Indeed, during most of that time, Google Maps incorrectly reported the route 3 as still running up Brazos. Eventually, the 1, 5, and 19 will join the 801 on Lavaca and the 3 will be replaced by the 803 also on Lavaca, but they easily could have moved the 1, 5, and/or 19 over sooner. Instead they chose to move other routes (the 7 and 20) from Congress to Lavaca first.
It’s About A System
As I said, this problem will be fixed. What I fear for the future, though, is that this reflects on a pattern of transportation planners here in Austin doing a poor job of organizing the system as a whole. In discussing the introduction of the 801 route, CapMetro CEO Linda Watson and CapMetro staff go so far in removing the 801 from the context of the bus system they start to sound simply detached from reality–CapMetro staff can’t bring themselves to call the buses “buses” and CEO Linda Watson seems to share the delusion. (For the record, I don’t dislike buses; I just like reality.) Is it any wonder that when the organization’s leadership sees the 801 as not-a-bus operating outside the bus system, the new schedule fails to coordinate it effectively with its dowtown-to-Westmall bus siblings?
Organization Before Electronics Before Concrete
Why do I care so much about this oversight, that will eventually be fixed? Transportation blogger Alon Levy introduced me to the German idea of “Organization, before electronics, before Concrete.” In the context of his post, he’s discussing how transportation planners in New York and Philadelphia have found it easier to spend lots of money on new tunnels than deal with the difficult political issues in coordinating different agencies. We have had our own version of that in Austin, where transit planners argued against even discussing coordinating better with our funding partners in the federal government to better serve the central transit corridor. But if voters don’t have confidence that you are doing the most to organize with the money you have, why would they vote to give you more?
Austin is revamping its land development code (i.e. “zoning”) in a project known as CodeNext. It would be difficult to overstate how important this process is. As I have said, zoning really is the central problem in Austin, as in many other cities. Circumstances change and when cities don’t adjust to the changing circumstances, you end up with policies that don’t match the problems that the city is facing. In a city faced with too many people driving too far and too many people driving until they qualify because central city housing is so expensive, Austin’s tight restrictions on multifamily development in the central city are really a bad leftover from a previous century.
CodeNext’s current round of public meetings is framed less on change, though, but more on maintaining continuity. This is how they describe it in the email they sent:
CodeNEXT is an unprecedented opportunity for Austinites to shape the way we live now and for generations to come. To be effective in framing how land can be used throughout the city, a revised Land Development Code should consider the unique character found in different types of neighborhoods throughout Austin. That’s where you come in. [emphasis in original]
We’re inviting you to walk your own neighborhood and document the features that make it unique. What do homes in your community look like? Your streets? Businesses nearby? Anyone can do it and we’ll show you how!
Although the framing here hints at things other than maintaining physical infrastructure (types of businesses), the majority of this framing is built around the idea of the “character” of a neighborhood reflecting the physical infrastructure of buildings, and nothing more. I believe this is a mistake.
People Change Even When Buildings Don’t
I believe the buildings-first perspective is a poor perspective from which to guide policy. As Edward Glaeser wrote in his book Triumph of the City: “Cities aren’t strcutures; cities are people.” In the places where central Austin’s physical infrastructure has stayed pretty much the same over the last few decades, the neighborhoods have changed in character greatly. I have friends who bought starter homes in sketchy neighborhoods and now live in expensive homes in swanky neighborhoods, all without either moving or the buildings around them changing much. The difference is that more people want to live in that neighborhood now, driving prices up.
Supply, Demand, and Price
In any market, including the housing market, supply and demand together determine the price. In the housing market, the supply are the homes, the demand is the number of people who want to live in those homes (and the amount those people are willing to pay). As time goes by, more and more people want to live in Austin, through many processes: natural growth as people have children, those kids grow up and move out to places on their own; a lot of urbanization as people move from the rest of Texas to live in Austin, and some cross-country migration as people generally move from the Northeast to sunnier places in the South and Southwest. That is to say, the demand for living in Austin has gone up dramatically, and is currently trending upward.
So, the question for “community character” is: which determines a community’s character more: the price of living there, or the present form of buildings. Preserving the character of the supply of buildings in the face of new demand means allowing all the change to come in the form of swings in price, as has happened in many places in Austin. Preserving the character of housing prices (e.g. “a good place for starter homes”, “an affordable neighborhood”) in the face of rising demand means changing the supply dramatically.
When it comes my turn to participate in the CodeNext hearings, I will express my preference for preservation through change: preserve (and restore) household affordability by changing the character of zoning constraints on supply.
Zoning is the central question for Austin, affecting virtually every issue we touch on. In previous posts, I’ve argued that the path to walkability is upzoning of central Austin neighborhoods near downtown and UT. I’ve also argued that upzoning is what’s needed to make Austin affordable. And the much-debated densities for the urban rail route are largely defined not by physical geography, but zoning geography.
Yet it’s a question I am only beginning to educate myself about. When Chris Bradford wrote his letter to City Council opposing the Highland route for urban rail, he was able to get much more specific than I have been:
In 2008, the City upzoned hundreds of tracts on Core Transit Corridors throughout the urban core for Vertical Mixed Use on the premise that these streets would be the focus of our transit investment and thus particularly suited for dense development… It is thus remarkable that Project Connect’s planners managed to choose the only sub-corridor — Highland — that lacks either a current or future Core Transit Corridor connection to downtown or UT.
Getting to know Central Austin zoning
So I sought out some maps to give some visual clarity to Chris’ point and found them here. The first map shows current and future Core Transit Corridors and the lots zoned for Vertical Mixed Use (VMU) along them:
There is indeed VMU zoning along South Lamar, South Congress, North Lamar, Guadalupe, Burnet, Airport, and Riverside. But, as Chris mentions, there is a big, transit-corridor-free, mixed-use-free gap north of UT, between Guadalupe and I-35, precisely where Project Connect is planning to run a train. Based on this map, you might think that South Lamar is the best corridor for transit, followed by South Congress. These are the streets with the most VMU zoning along them. But VMU isn’t everything. For a more complete look at what the zoning for these streets looks like, we turn to the general zoning map:
This map is all of Austin. It’s hard to see specifics, but I include it to make the general point that Austin is largely zoned single-family (SF). In much public discussion, people focus heavily on new condos or on commercial areas, but I believe this is largely because that’s the interesting part of Austin. In terms of land area, it’s tiny. Now here’s a much smaller portion of that map, showing a small, central area of Austin:
A few things jump out:
- Despite talk of central Austin becoming unrecognizably dense, a majority of central Austin by area is reserved for people to live in not-dense single-family housing.
- VMU areas around South Lamar and South Congress are largely confined to those streets themselves. Just one parcel away from major streets, you are no longer allowed to build multi-family housing, let alone tall or dense mixed-use buildings.
- There are three areas in Austin with real penetration of multi-family housing into a neighborhood and not just a major street: Downtown, East Riverside, and West Campus.
- The stretch of the proposed rail line in the Highland subcorridor from UT to Airport Blvd is zoned for low-density single family housing.
Single-Family Sea as Impediment
Zoning touches on most issues Austin faces. But with these maps in mind, I think we can get more specific: one of the major zoning problems Austin faces is the sea of low-density single-family housing surrounding Austin’s islands of high residential density. Upzoning downtown- and UT-adjacent neighborhoods to allow more than SF homes could help solve many of our problems:
- Transit Ridership We are a decent-sized city and should have no problem siting a rail line through density, where it will be used. Yet to hop from downtown to the business and political class’ preferred site of future density (Highland), it would have to go through a sea of low-density single-family housing.
- Housing Affordability There is ample land on which enough new housing could be built to satisfy the rich, the middle-class, and the poor. Even if the new housing is expensive, it would lower overall rents in a game of musical chairs. But it wouldn’t have to be expensive; building affordable housing is much easier when every home isn’t required to provide expensive amenities like personal gardens or yards, and homes (apartments or condos) can share walls and foundation.
- Tax Affordability It’s also cheaper for the city: expensive amenities like sidewalks and utilities can be provided cheaper the more people who share them.
- Transportation Affordability Housing built in central Austin is close enough to job centers that household transportation expenses could be eased by requiring fewer cars to achieve the same or better mobility. And fewer cars means less overall traffic.
Building islands of density surrounded by seas of single-family housing loses many of the benefits of the density, while retaining its costs. This is a point similar to that made by Jeff Wood in his endorsement of the Guadalupe-Lamar route, where he calls for the creation of a single large employment district that isn’t separated by low-density areas. And it really would be easy to do anywhere in Central Austin. West Campus isn’t denser for natural reasons (e.g. better soil, less hilly), but policy ones: the city passed UNO, allowing more housing to be built. Given the enormous demand for housing, any downtown-adjacent neighborhood that the city removed SF shackles from would see growth.
What I’m NOT Saying
1. I’m not saying all SF housing is terrible and should be gotten rid of. As I have said before (and again), I respect others’ preferences for living not only in single-family housing, but single-family neighborhoods (that is, neighborhoods that exclude/outlaw multi-family housing). When my last roommate and I parted ways, I moved to a small downtown condo and adopted a cat; she adopted dogs and moved a few miles away from downtown to find a place she could afford a fenced-in yard. I would no more tell her she’s wrong to want a garden and yard than I would expect her to tell me I’m wrong for wanting a cat. And, as you can see from the larger map, Austin the city (let alone the suburbs) is not remotely in danger of seeing single-family housing go extinct. To a first approximation, all of the housing areas of Austin are single-family housing areas.
2. I am not saying we should remake all of Central Austin to resemble downtown, with its soaring skyscrapers. As fast as Austin is growing, we would still run out of people to put in them before we got even close to that point. Even the relatively dense neighborhoods of West Campus and East Riverside are largely without downtown’s skyscrapers, and opening up more land area to denser building would satiate demand without every building going 20 stories high.
3. I’m not saying the city should demolish single-family homes. People who live in single-family homes close to downtown can go right on living in them; they just will now have the option of building more on their land or selling it to somebody else who wants to (or selling to somebody who doesn’t want to). The one thing they lose is the right to forbid their neighbors from building.
We are moving to 10 single-member districts and one at-large mayor (10-1) soon, a system that Chris Bradford worries will lead to “ward privilege” (Councilmembers granting each other carte blanche to veto development within their own district). Mike Dahmus describes a system similar to this already happening within one of the city’s most influential citizen groups, the Austin Neighborhood Council (ANC), where outer-Austin neighborhood associations support central Austin neighborhood association’s decisions about central Austin neighborhoods in solidarity, even if the outer Austin neighborhoods might be better served by central Austin densifying.
But I’m less convinced than ever that there are hard-and-fast rules about local politics. At least 9 out of the 11 incoming city Councilmembers will be new, due to term limits. A tiny fraction of voters vote in local elections and an even tinier fraction understand the full range of issues. A dedicated organization focused on understanding and changing local politics in an urbanist direction could make a tremendous difference. As the leadership of AURA has found, there is a hunger within many communities for this type of politics. Developers make a poor counterweight to neighborhood politics and a true grassroots coalition that wants to see dense development in central Austin could change things enormously.
The full text of Chris Riley’s amendments to the Project Connect resolution:
WHEREAS, the Project Connect team has identified several sub-corridors which are appropriate for high-capacity transit investment; NOW THEREFORE BE IT FURTHER RESOLVED:
The City Manager is directed to work with Project Connect to identify future funding needs and potential sources to prioritize and continue critical Central Corridor project definition and development activities in the remaining identified sub-corridors, including the Lamar, Mueller, and East Austin sub-corridors, and report back to Council by August 1, 2014.
BE IT FURTHER RESOLVED:
The City Manager is directed to work with Project Connect and CMTA to continue cultivating a relationship with our regional Federal Transit Administration officials to cooperatively prepare for any future high-capacity transit investments in the Lamar sub-corridor.