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April 18, 2014 / Dan Keshet

Shocking New Sticker Price Takes Highland Route from Bad to Appalling

When I compared Urban Rail corridors a few months back, my findings were pretty straightforward: the Guadalupe-Lamar corridor, including a growth-crazy West Campus, along with the Riverside subcorridor, would both have crazy high ridership.  Highland was middling at best, and only scored highly under the strange rules PC decided to use. Despite the main objection to it – that it would make it more difficult to come back later and ask for money for the powerhouse Guadalupe-Lamar corridor – few thought that it would in itself be a major cost driver as an addition to a Riverside-UT route.

No longer.  Project Connect has unveiled the price tags on the Highland subcorridor and they are jaw-dropping.  What was originally conceived of–and sold to the public–as a cheap project will contain a tunnel priced at either $230M or $290M in order to avoid a rail-rail intersection between urban rail and the existing MetroRail.

Cost Comparison 1

This project goes:

  • 3.1 miles from Riverside and Grove to Travis Heights
  • across the river on a brand new purpose-built bridge at Trinity ($75M)
  • 1.4 miles through dense downtown traffic ($100M)
  • 1 mile through the dense university setting
  • 3 miles up Red River
  • 8 blocks from Red River to Airport ($230-290M)
  • A final jaunt to Highland Mall

In that long route, about half of the entire project’s cost may come from that tiny 8 neighborhood blocks from Red River to Airport.  Half for 8 blocks, and the other half for 8 miles that includes a river crossing, a major university, and a major downtown!  Madness! [See update below.]

Comparison 2

$230M (let alone $290M) is the cost of the entire MetroRapid bus upgrade ($47M) and the entire 32 mile-long MetroRail project ($120M) put together, with tens of millions to spare.  We could have dedicated bus lanes all over the city, a whole network of efficient, traffic-proofed transit, for the cost of one measly rail tunnel out in a not-particularly-dense part of town.

It is precisely because I am a transit advocate who is personally transit-dependent that I am so appalled by these numbers. It is not the fact that this project is expensive; all infrastructure is pretty expensive.  It’s the fact that the project so wastefully spends our very rare transit dollars.  $230M is real money that could be going toward real infrastructure around the city!

Two caveats here: 1) Project Connect says that these numbers are still being refined, and 2) I have yet to see a number released for what would be necessary if they ran buses instead of rail (possibly much, much cheaper, because they’re eliminating the rail-rail intersection).

But if this is what it looks like, it just looks like Austin’s rail plans have hit a major snag.  If it’s going to cost $230M+ to extend this rail line so that it hits Highland Mall, the only reasonable course of action is: don’t do it.  Connecting the new ACC would be nice for $10M.  For $30M, that’s stretching it.  For $230M, that’s crazy talk.

Update:

In the comments, Novacek and Lyndon Henry give better cost estimates.  The total cost per both of their estimates comes to just about $1B, leaving the rail tunnel to be about a quarter of the cost, not a half.  I’m still struck by how, at the beginning of the process we were told that the Highland route was the ultimate low-cost and the Riverside route the ultimate high cost.  Instead, we’re seeing that inverted.  Riverside is looking low cost, even including a brand-new bridge, and Highland very high cost.

April 3, 2014 / Dan Keshet

What we talk about when we talk about affordable housing

One of the most confusing terms in Austin politics today is affordable housing. There are two very different definitions in use.

affordable housing

The first definition, which I tend to call affordable housing without using capital letters, is the plain meaning: a housing unit that doesn’t cost very much.  There are many reasons why some housing is less expensive than other housing. It might be smaller, older, lack amenities like pool access or parking or hardwood floors, be in a worse location (whether unpleasant or distant), or offer less privacy (e.g. shared rooms, shared apartments).  This doesn’t mean that these housing units are terrible by any means! But it does mean that the people who have top dollar would rather pay that top dollar to live in other units.

Affordable Housing

The second type of Affordable Housing, which I tend to spell with capitals, is legally-binding, and either mandated or subsidized. This comes in many flavors, but basic characteristics are:

  • It is mostly means-tested.  That is, they must prove that they have a low enough income to qualify.
  • It is legally bound to remain Affordable Housing for a period, often measured in decades.

There are various programs that create or require Affordable Housing in Austin.  Voters approved a bond to subsidize creation of Affordable Housing units. Some denser developments are required to set aside some of their units to be mandated, subsidized Affordable Housing, and others are allowed to buy their way out of this provision by paying taxes into a fund that subsidizes the creation of Affordable Housing units elsewhere.  There are niche housing developers who specialize in building Affordable Housing, such as the nonprofit Foundation Communities.

There are different types of Affordable Housing.  Permanent Supportive Housing is targeted at the chronically homeless, heavily subsidized (residents may pay rent of $50 per month or no rent at all), and comes paired with social services to help the residents get on their feet.  This housing feels more like a social service than a straight affordability program; it is tightly entwined with other social services and serves a population that otherwise may literally have no housing at all otherwise. On the other hand, a mandated Affordable Housing unit in a VMU development is at the opposite end of the scale. While it only serves people in the lower half of the income scale, it only serves people in a narrow band of that scale, because residents must both prove that they make little enough money to qualify for the program and enough money to pay their rent.  Rents on these units may be as high as $700 for a 1BR, well beyond what many of the neediest are able to pay.

When they conflict

There are some people who support both Affordable Housing and the broader movement towards more affordable housing through other means.  Pretty often, however, affordable housing and Affordable Housing actually come into conflict.  As mentioned above, one mechanism that pays for Affordable Housing is taxing the creation of new, dense development, like the Downtown Density Bonus (DDB) and the VMU affordability provisions. In the case of the DDB, a developer must pay fees if they want to build a taller building with more homes. In the case of VMU,  a developer must set aside units if they want to build less parking.  Parking is very expensive, whether it’s building garages or just dedicating land to surface lots, so accepting reduced rent on some units for decades may still be more profitable than being forced to build parking spaces. This sets up two different ways these programs for Affordable Housing cause conflicts between affordable housing and Affordable Housing:

Taxing Development Reduces The Number of New Homes

By focusing so much taxation on dense, new development, there are probably some projects that would get built or built larger if it weren’t for the tax. Note that this isn’t true for the Affordable Housing bond, which was funded by a broad-based property tax increase, but specifically for the development taxes like the DDB that target only new development. As I discussed before, one of the major reasons for the lack of affordable housing in Austin is that there just isn’t enough housing altogether. In a game of musical chairs, when there aren’t as many chairs as there are players, somebody ends up without a chair–or else sitting in somebody’s lap.  In a game of musical homes, players end up homeless, doubled up, or leaving the city altogether. Landlords and developers have freer rein to raise rents, knowing they will find somebody to pay, reducing the supply of affordable housing. Even if the new developments that would have been created would have been expensive housing, they help to create more slack in the rental market, removing the ability of landlords of cheaper places to raise their rents.

Giving development taxes to Affordable Housing providers creates constituency against allowing more development

There are many supporters of Affordable Housing in the city.  Providing a mechanism that allows some types of new housing to be created only if it they pay for Affordable Housing provides a strong reason for these supporters to oppose any measure that allows other types of housing unless it also creates Affordable Housing. It also provides a much stronger incentive for people to oppose lifting restrictions on building because the taxes that are raised by allowing developers to buy out of those restrictions are dedicated to a particular, organized constituency.

This has happened at City Council most recently in the discussion of a very positive development to allow the creation of more affordable housing.  The ordinance would allow developers to build more small housing units per building in some places than they previously could and also allows them to reduce one of the most expensive amenities housing can provide: a parking space for each unit. This measure encourages the creation of more affordable housing. Developers are always trying to balance the costs of building a unit against the potential rent they can charge (or price they can sell it for).  Some would opt for a high-cost, high-rent model, while others for a low-cost, low-rent model. What this ordinance does is allow some of the costs to be foregone (parking) and others spread out over more units (land), but only if the developer creates smaller, less desirable, more affordable units. This promotes affordable housing in two ways: directly, by encouraging developers to opt for a lower-cost, lower-rent model; and indirectly, by providing more homes overall for the game of musical chairs.

At Council, however, the biggest concern with the ordinance was that, by allowing developers to create affordable housing without requiring them to build parking spaces, the city would lose leverage over the developer to force them to create Affordable Housing. In other words, Affordable Housing advocates were afraid that if developers were allowed to build more affordable housing, they may not agree to build more Affordable Housing.

Words

If that previous sentence–and this entire article–wasn’t confusing to you, you may have been involved in Austin politics too long.  I intentionally made it difficult to read, to help clarify just how crazy using the same words to refer to different concepts can be. There have been many proposals for terms that would help clarify this (e.g. “social housing” instead of “Affordable Housing”, “affordable housing” as a condition (affordability) of housing, and “Affordable Housing” as a housing product type). My plea to my readers is simply this: when talking about either, be clear which you are referring to. When listening to people talk about either, make sure they clarify which they are referring to. If somebody reports on the number of “Affordable” units in the city, make sure they are clear about whether they are counting only means-tested Affordable Housing units or all housing units that don’t cost that much.

And a special plea to the journalists and editors out there: please, please, develop a house style that brings clarity to this issue. When you use the words “affordable housing” to refer only to Affordable Housing (as, say, the Chronicle does here), you are doing your readers a grave disservice and confusing the issue.

March 28, 2014 / Dan Keshet

It’s Happening!

For months, years maybe, I’ve been hinting that what Austin really needs is a broad urbanist organization.  Well, it’s happening!  AURA, founded to focus on the Urban Rail issue, will be expanding into an organization with a broad range of urbanist and housing affordability issues at its focus.  It’s been a long journey to get to where we are, with a large and growing connected community of activists, advocates, and fellow riders who care passionately about making Austin a fantastic place for everybody.

And that journey begins anew at our first organizing meeting of this new incarnation. It will be taking place on 2:00 PM, Sunday March 30, upstairs at Royal Blue Grocery at 609 Congress Avenue.  This will be an opportunity to sign up as a member, approve a platform and bylaws, and meet and talk with like-minded people from your district and/or your subject area.  So, RSVP on Facebook and see you there!

March 27, 2014 / Dan Keshet

A Very Positive Development

As Austin Contrarian documents, Council Members Riley and Spelman, and Mayor Pro Tem* Cole, have introduced a very positive item on the agenda for Thursday’s City Council session.  The item would allow buildings to 1) waive “minimum site area” rules and 2) waive minimum parking requirements when they build apartments less than 500 square feet on either Core Transit Corridors or in Transit-Oriented Development zones.

Quick glossary (and readers, correct me if I’m wrong):

  • The minimum site area is essentially a cap on the number of units an apartment complex can have per acre.
  • Minimum parking requirements are rules requiring a certain number of parking spaces per apartment.  The exact requirement varies based on the number of bedrooms in the apartment.
  • Core Transit Corridors are essentially big streets like Lamar or Burnet. You can identify them by the presence of large apartment complexes.
  • Transit-Oriented Development zones are special zoning areas near transit stations that allow developments with less parking (to take advantage of their proximity to transit) in exchange for some special design requirements.

The reason this is such a big deal is that, as Austin Contrarian says in the link above, minimum site areas and minimum parking requirements are some of the biggest impediments to providing homes in Austin. If developers weren’t required to build parking for every lot, they could create targeted developments to people who don’t own cars.  Even if currently there are few people who would be willing to go without a car, the developers can still make money by reducing the price because they won’t have to pay for the extra land for parking.  The reduced price for a nice, centrally located apartment might lure some people to give up their cars.

On its own, this change will not bring a construction boom or affordability to Austin.  As I discussed, only allowing density on select streets greatly limits opportunities for building.  The same logic that makes it useful to get rid of minimum parking requirements on the Core Transit Corridors themselves should apply to areas near the CTCs as well.  After all, most people who don’t have a car can walk a block to the transit corridors as they can get a unit on the exact street itself.  Even if those streets weren’t upzoned to multi-family, eliminating parking requirements would allow many more people to build Accessory Dwelling Unit–also known as granny flats, garage apartments–small “extra” units on a Single Family lot. Indeed, the same logic that says that minimum parking requirements aren’t needed near transit should apply everywhere.  Few people may want to live far from transit without a car, but if somebody wants to, more power to them.

Similarly, the same logic that says that a unit less than 500 square feet could benefit from reductions in parking minimums could just as easily apply to units greater than 500 square feet. 500 square feet is plenty for many single people, but reducing parking requirements for larger units might allow more families currently priced out of the core to ditch a car (perhaps one of two cars or perhaps both if their circumstances were right) and move to a more central location.

Still, this really is a fantastic development, both because of the direct effect it would have and because of the way it focuses on some of the real issues: onerous minimum site area and parking requirements getting in the way of building transit-friendly, centrally-located housing. I urge you to write City Council and express your support for Item 40, your thanks to Riley, Spelman, and Cole for sponsoring it, and a request that Leffingwell, Morrison, Martinez, and Tovo support it as well.

One last explanatory note: the Item itself is not an ordinance. It is merely a request that staff write an ordinance and bring it to Council.  This is actually the second stage in the process; the first was a resolution sponsored by Council Member Spelman asking staff to study the issue of microapartments.  Even if this item passes Council on Thursday, there will still be a long way to go before it becomes law.

* For those not in the know, “Mayor Pro Tem” is essentially “vice mayor.”  Both the mayor and the Mayor Pro Tem are councilmembers with equal vote weighting as any other councilmember.  City Council etiquette dictates that you always refer to and address the Mayor and Mayor Pro Tem as such, though, and not merely as “Council Member.”

March 18, 2014 / Dan Keshet

Quick-hitter on SXSW transportation

Austin just hosted our largest annual conference / festival, SXSW.  This festival brings in many out-of-towners, as well as concentrating locals in central Austin. I think it can serve as a basic stress-test on our city’s infrastructure, to identify what issues we are like to see as our growth continues. The future will not look exactly like SXSW (I hope!), but it may well involve more and more people in our downtown. Here are my first-glance takeaways, based mostly on impressions from being downtown, rather than numbers:

  • The belle of the transportation ball at this year’s SXSW was Austin Bcycle, the new bike-sharing program deployed mostly in downtown, but scheduled to expand later. They have released more exact numbers, but impressionistically, there were a lot of these bikes downtown and yet it scaled very well. I passed tons of the bike racks and didn’t see any full (i.e. it can’t accept bikes parking) or empty (i.e. no bikes to rent). I do fear that as this program expands outside of downtown, it will hit the zoning straitjacket around downtown, as pretty much every direction around downtown is surrounded by neighborhoods where zoning is unwelcoming to new development, and therefore, the possibility of expanding to new residents or workers. Bike-sharing worked so spectacularly because of the short distances between dense destinations. It may have difficulty expanding to a longer “density-only-on-the-corridors” development model, of riding bikes on either large arterial streets or small, un-dense streets. Within downtown, the planned bike lanes will help a lot.
  • The other great winner was the Great Streets Program of, among other things, expanded sidewalks. This is the first year that I felt like downtown was a true walking city and the Great Streets program was a huge part of that. In part, this is simply because there’s more room to walk on the expanded sidewalks. But another of it is that there are so many more people out on the sidewalks at restaurant tables and the like, creating a much more pedestrian-friendly environment.
  • The downtown transit-priority lanes were overall a positive, but with some serious downsides. The positives:
    1. They really do work at getting buses moving faster.  I definitely saw buses moving past stopped traffic. Car-drivers really did follow the rules. This is only one item, but it’s a doozy.
    2. By putting the buses together on one street, it gives them a “presence” they never had when spread out among many streets.  Waiting at a bus stop with 40 other people, you really do get the feeling that taking the bus is a normal and accepted activity, rather than the weird activity it may have been perceived of in the past. It also simplifies catching the bus and gives people who can take multiple routes much better frequency.
  • The negatives:
    1. Putting them on Guadalupe/Lavaca instead of Congress was a fundamental and large mistake. During the urban rail planning process, the mayor has repeatedly emphasized that the center of downtown is moving east, meaning that it’s moving away from the transit-priority lane. One simple and cost-free way the city could ameliorate this is simply expanding CBD (Central Business District) or DMU (Downtown Mixed-Use) zoning to the rest of downtown. Just blocks from one of downtown’s two transit stops, there’s a large corner of downtown that looks pretty much like a suburb. More residents and workplaces there will mean more people able to take advantage of walking to those stops.
    2. Putting them on Guadalupe/Lavaca instead of Congress was a decision made to help automobile traffic on Congress, not to help buses. In the process, this has also made Congress a much worse pedestrian street. The buses may have slowed traffic on Congress, but slowed traffic was a positive for pedestrians. Congress is a very wide street at 6 lanes of traffic plus two lanes of parking. Without any buses to slow it down, walking along it felt less like it used to of walking along Austin’s front door and a bit more like walking along a highway. Running more transit (buses or urban rail) along the street and expanding the program to rent the current parking lane to local businesses would both make it more comfortable for pedestrians.
    3. Putting all the bus lines together may have helped route simplicity and created a more intangible presence, but it also created serious bus bunching problems. In just a few visits to the area, I saw buses backed up 6 deep. I saw buses blocking intersections for a full walk cycle, preventing any pedestrian crossing. This is a serious problem that needs to be addressed and fast, if the buses are all to move to Guadalavaca.
  • Parking infrastructure Austin’s parking infrastructure held up well. With tons of surface parking lots converted into concert spaces, people still managed to park. The cost of parking rose quite a bit, and this, along with the traffic, definitely induced some people to take public transportation instead of driving a car downtown. Downtown does not need more parking and, to the extent that prices rose, the private market will surely be able to decide to provision more if needed.
  • The real-time signage for both the 801 and the MetroRail were major failures. I heard story after story from friends of seeing signage that was wildly wrong for both. I myself decided to pass up taking the 801 because the real-time sign said the next bus would come in 22 minutes, only to have a bus pass me walking on foot 3 minutes later. I don’t see much of a policy issue, but c’mon, Cap Metro, get your act together. If you can’t get it right, then turn the signs off; putting out wrong information is 10X worse than putting out no information.
  • The MetroRail was a mixed bag. On the positive side, it ran more full than ever, including running an extra train. On the negative side: 1) the major issues that it has always been there remains: it’s just very expensive to run per passenger. In addition, it seemed to have scaled fairly poorly. The train ran late through most of the festival and many passengers at the closer-in stops were passed by as trains were already filled by the time they reached central Austin. The beauty of public transportation is supposed to be that, as more passengers ride it, it gets better, but the opposite seems to have happened with MetroRail.
  • The downtown automobile lanes were pretty much a failure. They came to a standstill during many hours of the festival. Unlike the public transportation, however, the car lanes seem like pretty much a lost cause. There is no way for them to expand easily and as we hit SXSW-style densities, they pretty much fail. Seeing how colossally they failed, highway expansions seems like a very questionable goal. The idea of spending gobs of money to revamp I35 in order to speed more cars into a downtown that can’t handle them seems like true folly. Much better to focus on cross-town connectivity, so that people can make shorter bike and transit trips from the East side across I-35 and the West side across MoPac. In addition, as the city expands, it seems that we are going to need to devote a greater percentage of our downtown roads to more efficient lanes that can carry more people than the current automobile-dominated lanes, such as transit-0nly or bike-only lanes.

Admittedly, many of these impressions are not far from what I believed previously, so perhaps I only saw what I wanted to see.  What was your impression?  What did you see?

February 17, 2014 / Dan Keshet

What are the tax implications of reducing occupancy restrictions?

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.

February 15, 2014 / Dan Keshet

My Testimony on Occupancy Reductions

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…

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