This is a free sample of the Austin Politics Newsletter from Aug. 15, 2022. To get DAILY insights on city politics, click here to subscribe to the newsletter.

UPDATE: I need to address a couple errors in my article from yesterday.

In yesterday’s article on animal abortions at the Austin Animal Center, I mistakenly attributed a quote to Commissioner Beatriz Dulzaides:

“I don’t think there’s any more need for discussion. This is a longstanding policy, it’s worked and it’s fundamental to Austin being the largest safe city for animals in the country,” she said. “This is the heart of ‘No Kill.’”

The person who actually made the remarks was Commissioner Kristen Hassen.

Also, Commissioner Ryan Clinton pointed out on Twitter, there is not a blanket prohibition on animal abortions at the Animal Center, but rather the shelter is not allowed to spay animals showing visible signs of pregnancy without first trying to find an individual or rescue organization willing to shelter the pregnant animal and its future litter. I sincerely regret these errors.

The policy is still absurd. It equates animal abortion with animal euthanasia, and it still leads to an increase in the city’s population of orphaned animals.

For instance, Commissioner Paige Nilson, who is seeking to change the ordinance, recalled a recent instance of a parent and a child who look after a colony of cats near their home. They brought in three of them to be spayed but two of them showed signs of pregnancy and one was lactating, so the shelter told the people that they either had to take the cats back to the colony to have their kittens or they would be transferred to Austin Pets Alive to give birth.

Cats, by the way, are typically pregnant for about nine weeks but begin to show signs of pregnancy after about three weeks.

If we have a major surplus of dogs and cats at our shelter, and we have all accepted the premise that spaying and neutering animals to reduce the orphaned animal population is a good thing, then why should the city hesitate to terminate the pregnancies of stray animals?

Last week activists and medical professionals raised concerns about an uncompromising anti-abortion policy that has been in city code for over a decade. Their pleas to reverse the policy fell largely on deaf ears and even drew condemnation from members of the city commission they were addressing. The commission in question, whose members are appointed by Council members, voted decisively to keep the policy in place.

I’m talking of course about the Animal Advisory Commission’s debate over Section 3-1-26 (D) of the city code, which prohibits the Austin Animal Center from spaying a pregnant animal. Spaying a pregnant animal terminates the pregnancy.

CM Chito Vela’s appointee to the commission, Paige Nilson, a veterinarian, opened the conversation with photos of some of the 115 puppies and 158 kittens (under 6 months) currently at the shelter. There are an additional 41 puppies and 191 kittens in foster care.

She recounted instances of people who look after “community cats” being rebuffed by the shelter when they bring the cats in to be spayed. Instead of quickly spaying the cat and returning it to its habitat, the shelter holds on to the pregnant feline until it gives birth to a litter of kittens that now must be cared for.

“I full support saving the lives of puppies and kittens,” Nilson said, “but saving the lives of puppies and kittens is different from being forced to allow pregnancies to proceed through labor and birth without being able to apply individual discretion to each scenario.”

She couldn’t find any other example of a shelter with such a policy.

Nilson’s comments were followed by those of two volunteers –– including one self-described “crazy cat lady” –– who look after colonies of feral cats. Both urged the city to allow abortions for pregnant cats.

Luis Herrera, a professional dog trainer appointed to the commission by Mackenzie Kelly, also endorsed abortions, saying that puppies born into stressful circumstances at the shelter often have serious behavioral problems.

None of this appeared to sway the majority of the commission and a couple members were offended by the very notion of allowing animal abortions.

Commissioner Ryan Clinton, a county appointee to the panel, called for the protection of “the animals in utero” and suggested that allowing abortions would actually aggravate the animal center’s space crisis. Currently, he said, a pregnant stray animal can be sent to Austin Pets Alive, which “supports saving the lives of those in utero puppies and kittens.” The nonprofit would not accept a spayed adult animal, he said, forcing the city shelter to lodge it.

“Repealing this ordinance is flying in the face of ‘No Kill’,” said Nancy Nemer, an appointee of the county commissioners court. “I can’t help but feel this is a knee-jerk reaction from the parties, including the Austin Animal Center, to try and reduce their responsibility in this whole overcrowding situation.”

Nemer added that the center is less crowded than it has been in the past.

Commissioner Kristen Hassen seemed similarly frustrated that the topic was even being broached.

“I don’t think there’s any more need for discussion. This is a longstanding policy, it’s worked and it’s fundamental to Austin being the largest safe city for animals in the country,” she said. “This is the heart of ‘No Kill.’”

The motion to recommend repealing the abortion prohibition failed, 4-7.

Are these pro-lifers vegetarians?

I’m sympathetic to the cause of animal welfare. I was a vegetarian for much of my childhood and for the past couple years I’ve been a pescatarian; I think the horrific conditions animals are subjected to in factory farming are indefensible.

And yet, it’s obvious to me that providing indefinite shelter to stray dogs and cats is not even close to the top priority of city government, especially when there are so many human beings without shelter.

What’s so odd about the politics of animal rights in Austin (and most of America, frankly) is that many of the same people who could never fathom giving up food that is the product of torture also believe that we should spare no expense to keep every stray cat or dog alive.

But while Austin’s no-kill policy probably isn’t grounded in a particularly coherent ethical framework, it probably reflects public sentiment. People aren’t willing to pull the plug on cats and dogs.

I can’t imagine, however, that most voters are against dog and cat abortions. I can’t believe I even have to say it, but City Council should repeal this prohibition. It’s bad on every level. It burdens city taxpayers with even more animals to care for and it ultimately undermines animal welfare by leading to overcrowding at the shelter. This is an embarrassment.

This is a free sample of the Austin Politics Newsletter from Aug. 15, 2022. To get DAILY insights on city politics, click here to subscribe to the newsletter.

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Last week Kirk Watson unveiled his plan on housing. Let’s start with the good part:

A recent report revealed that  the City of Austin charges the highest development fees among all large Texas cities, by a significant margin. For example, for infill development, the City’s estimated fee is around $41,300 per unit, while the average estimated fee among other big cities is around $14,400. While Austin is facing a housing emergency, I believe we should designate projects under City review that will fill critical needs and temporarily cut development fees for those projects by at least 50%. If necessary to  prevent any negative impact on the development review process, we could utilize the City’s Stabilization Fund to fill any budget gap created by fee cuts.

Yes, Austin’s development review process is a disaster and the city imposes far higher fees on development than any other in the state. However, reform is much easier said than done. Many of these fees have environmental justifications and constituencies, such as the newly-implemented transportation impact fee and the parkland dedication fee. They absolutely should be reduced, but there will be resistance from the city bureaucracy, other members of Council and influential advocacy groups.

Here are some other ideas that generally fall into “the right direction” basket:

• Creating designated hubs of density – especially along transit corridors – where the City requires minimum development as opposed to setting limits
• Proactively identifying greenfield and large underutilized commercial areas and facilitating the development of new housing, including by utilizing incentives
• Reducing compatibility and reducing or eliminating parking requirements in targeted areas
• Changing vertical mixed-use zoning to allow more height in exchange for more affordable housing units 
• Streamlining the process of subdividing and developing or redeveloping larger single-family lots 
• Changing City development rules to encourage construction of appropriate duplexes and Accessory Dwelling Units rather than McMansions on single-family lots
• Creating incentives to convert office buildings into residential buildings, add housing to existing parking lots, and encourage employers to participate in building workforce housing
• Creating a new City site plan process for simple projects that need less oversight

I’d like to see more details about reducing compatibility and parking. City Council already approved a modest reduction in compatibility on major corridors –– how much farther is Watson proposing we go? Same question on parking.

It’s hard to imagine he is actually going to propose further changes to VMU beyond what Council already established with its recent approval of VMU2. The best way to increase the use of VMU is to further ease compatibility standards.

Now for the really bad part

I have a hard time taking this seriously:

Comprehensive reform of our land development code has eluded Austin for more than a decade. In my view, the failure lies primarily with a “one size fits all” approach, which I see as a relic of our previous at-large system of  governance. When Austinites voted ten years ago to adopt a system of district representation, I  believe they were expressing a desire to localize decision-making, including decisions about development and housing policy. I propose that the best way to make progress is to stop trying to  force every Austin district to adopt the same type of code reforms, and instead allow each Council  member to bring forward a set of district-specific reforms:

Watson claims that efforts to comprehensively overhaul the city’s land development code is a “relic” of our at-large system.

No, absolutely not. It’s a recognition that the housing crisis is a citywide problem that every part of the city has a role in addressing. The problem with the at-large system was that every member was attuned to the grievances of wealthy and powerful West and Central Austin neighborhoods that wanted to wall themselves off from new housing. The promise of 10-1 was that it would finally deliver a Council that truly represents the whole city and is willing to respond to the needs of the many, not the few.

Now Watson is proposing allowing Council members to exclude their districts from accommodating growth. That is a recipe for more economic and racial segregation and more sprawl.

Under this proposal, CM Alison Alter, who is already hostile to reform, just gets to say that her uber-wealthy West Austin district doesn’t actually need to allow more multi-family or missing middle housing? We just accept that large swaths of town will become enclaves of the wealthy few who can afford multi-million dollar single-family homes?

State law already establishes a formidable NIMBY filibuster that allows just three members of City Council to block rezonings. Why is Watson proposing to lower the threshold further, allowing just one member of Council to obstruct housing.

Watson offers the NIMBYs a carrot

Now, the next part of his plan proposes to “incentivize” districts to do the right thing:

Those districts that adopt pro-housing code reforms should benefit directly from the new revenue  those reforms will generate in the form of an Affordability Annuity – a dedicated, ongoing funding stream that neighbors could choose to devote to local parks, pools, libraries, displacement prevention, rental assistance, or other initiatives. This is also a way to help ensure equity for those areas that provide more of the city’s needed housing stock than others.

OK. So let’s imagine that every district does the right thing and increases housing options.

But a new development in Central or West Austin is much more valuable and yields much more new tax revenue than a new development in Southeast Austin. So this threatens to balkanize infrastructure spending to the advantage of the areas of town that need it least.

I’m glad to see a mayoral candidate talk about the important role that new development plays in supporting public services. But Council needs to be able to use every penny of new revenue to address the city’s most pressing budget priorities, notably the staffing crisis it’s facing because the wages for public employees are not close to keeping pace with inflation + housing.

So how might district-based zoning be OK…?

It might be OK if we elect pro-housing Council members. For instance, at least four of the candidates running in Central Austin’s District 9 recognize the need for serious reform in the district. But at least one of them does not.

So on the whole I’m pretty pessimistic about district-based code reform.

It’s much easier for a middle-of-the-road Council member to endorse bold reforms on a citywide basis. If we reduce it to a district decision, it all of a sudden becomes a “planning by town hall” situation most likely driven by the same small group of incumbent homeowners responsible for the terrible neighborhood plans that got us into the mess we’re in now.

Walter Long? How about Muny?

Watson imagines a future Mueller on the city-owned land around Walter E. Long Lake, arguing that plans for it to be dedicated entirely to parkland are infeasible:

While the City completed a park Master Plan in 2019, the estimated cost of executing that plan was $800 million – not only an entirely unachievable budget but, I would argue, also now entirely the wrong plan. Given the housing emergency facing Austin today,  I believe we should change course at Lake Walter E. Long and instead pursue a vibrant, mixed-use, transit-oriented development that could help reshape our city’s housing future – and still create at least the second-largest park in Travis County.

I have a better idea. Instead of subsidizing sprawl east of US-183, how about developing Lions Municipal Golf Course? That land is much more likely to be truly “vibrant” and “transit-oriented,” since it is already served by bus service and within walking distance of existing businesses and amenities, including Austin’s highest-performing public schools.

I wish Watson would strongly consider that. I know that he sponsored legislation that allows voters in the area to approve a special utility fee that will pay to keep Muny either a golf course or public parkland, but “given the housing emergency facing Austin today,” I hope he recognizes that our priorities must change.

Watson responds to my concerns

I asked Watson by text to address my concern about neighborhoods blocking change. He responded:

One of my favorite Beatles song is “Something.” After years of accomplishing nothing on LDC reform, I’m offering some ideas to accomplish something and recognizing that we need to do these things in the context of our current form of governance. This doesn’t wall off any any area and, in fact, attempts to incentivize not doing so.

100% of those ideas will have obstacles to overcome and details to work out, including likely figuring out guard rails or ways to avoid/prevent unintended and unwanted consequences. But it’s time to have the discussion, and I look forward to it. I want to hear ideas for improvement that help make more progress than we’ve had.

I just don’t see this district-based approach as necessary at all. It overestimates the strength of the anti-growth coalition and presumes that we can’t get anything done without unanimous consent.

It’s true that there’s a lot we can do without overhauling the whole LDC, and much of that can be accomplished on 6-5, 7-4 or 8-3 votes, especially if there is a mayor who effectively uses the bully pulpit to push a pro-housing narrative.

It’s hard to know if district-based code reform is a serious proposal or if it’s just a campaign tactic aimed to appeal to growth-hesitant voters. Either way, it’s concerning that new housing in our best neighborhoods is being framed as an option instead of as a need.

This is a free sample of the Austin Politics Newsletter from July 21, 2022. To get DAILY insights on city politics, click here to subscribe to the newsletter.

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In the past two years, parkland dedication fees on residential developments have doubled –– twice. An apartment developer who would have paid $1,538 per unit in 2020 now owes the city a whopping $6,428 per unit they build in a city that is desperate for housing.

City Council believes this is a problem, but not for the obvious reason. The problem, according to a resolution it approved in April and which the Parks Department is now developing into a new ordinance, is that the city isn’t squeezing enough out of developers.

Yesterday the Parks Department presented a proposed ordinance to the Planning Commission that would extend parkland dedication fees to commercial developments.

Traditionally, the rationale for requiring housing projects to dedicate parkland (either through land donations or fees-in-lieu) is that they are helping to mitigate the new demand on the parks system created by their residents. The city, according to Texas Supreme Court precedent, must establish an “essential nexus” between the impact of the project and the fee being charged.

In imposing similar requirements on commercial projects, the city is arguing there is an essential nexus between employees and demand on the park system. For instance, those who commute downtown for work are more likely to use parks downtown –– on lunch breaks, after work etc. Likewise, hotel guests are likely to use parks during their stays.

If the idea is that imposing these fees on commercial developments would allow the city to reduce fees on residential projects, that would be great. But that’s not what the Parks Department is proposing. Nor was there any talk of that in the resolution authored by Alison Alter that prompted the ordinance. None of the 33 whereas clauses in the resolution mentioned housing or affordability.

Here’s what they’re proposing to charge for commercial developments:

The fee-in-lieu is supposed to be used for acquiring new parkland within 2 miles of the project, while the development fee can be used to improve infrastructure in existing parks.

Commissioner Claire Hempel noted that a disproportionate of new commercial development is downtown –– does the city really expect to use all of the dedication fees to acquire new land in an area of town where there is very little vacant land and the land is obscenely expensive?

Alas, Parks staff explained that if they can’t identify an appropriate parcel within a year of collecting the fees, they can instead use the money to make improvements to existing parks in the area. Maybe repairing the slope failure on the Shoal Creek Trail, for instance?

A couple commissioners voiced varying levels of skepticism about the formula, most notably Greg Anderson, who described the proposal as “borrowing a lot from the very broken residential formula.”

“I don’t believe the formula is broken,” responded Parks Planner Randy Scott. “I believe it is now beginning to reflect the actual cost that it costs the Parks and Recreation Department to provide land and park facilities for new residents that are coming to Austin.”

Scott argued that fees on new development only pay for about half of the cost of new parks. The rest, he said, is “subsidized by existing residents” through voter-approved bonds.

Hmm. Except the “new residents” (if we accept the false premise that all residents of new developments are newcomers) are also taxpayers who will be paying for the cost of those bonds.

In its analysis justifying the new commercial fee, the Parks Dept estimated that 58% of Austin’s workforce commutes from outside the city. But Commissioner Jeffrey Thompson noted that his wife, for instance, is an Austin resident who works for the Bastrop School District. The same is true of many of her colleagues. Did the formula account for people like her? No, said staff.

This is an important point that could undermine the city’s “essential nexus” argument. City data from 2017 indicates that 34% of Austin residents work outside the city.

Anderson warned that the city was on shaky legal ground and suggested it would prompt the state to take away its parkland dedication powers entirely.

“We know this is going to happen if we go down this route of not thinking this through well enough and coming up with this half-baked formula that’s already broken on one side,” he said. “We’re so good at adding fees, we’re still really bad at making responsible development easy to achieve in this city.”

Commissioner Grayson Cox, Alter’s appointee, was unsympathetic, saying he was concerned “that we’re underfunding our parks.”

“I think that the quickest way to make Austin cheaper to live is by dramatically reducing our quality of life, so that nobody wants to live here. So similar to our street network, our transit network, everything else is struggling to catch up to the growth that we’ve seen.”

Well, yeah. That’s a point I often make when people oppose investments –– private or public –– that they say will prompt gentrification. But the counter in this case is pretty simple: there’s a limit to how much we should make people pay for amenities if we’re charging so much for them that they can’t afford to use them.

Unwilling to act on the proposal yet, the Planning Commission ultimately voted to postpone until their Aug. 9 meeting. That may complicate things a bit for Council; according to Parks staff Council had wanted to have a recommendation by the time it starts taking up the annual budget on July 28.

The bottom line is that we need to consider the unintended consequences of these fees, whether they’re applied to commercial or residential developments. Driving up the cost of housing is obviously bad, but so is any fee or regulation that may encourage developers to build outside of the city, thus depriving us of desperately-needed new tax revenue and facilitating sprawl.

This is a free sample of the Austin Politics Newsletter from July 13, 2022. To get DAILY insights on city politics, click here to subscribe to the newsletter.

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Yesterday Mayor Steve Adler and four Council members unveiled a proposed reform to compatibility regulations and parking requirements for projects located on “major” and “medium” transit corridors.

That the co-sponsors include two reliable members of the preservation bloc, Leslie Pool and Alison Alter, suggests that it could be approved with unanimous or near-unanimous support. Adler believes that it could be a rare example of the ever-elusive “consensus” that he has spent five years seeking on land use.

The problem, of course, is that this is barely reform. And there are definitely some pissed off members of Council who may refuse to support it because it does so little.

So let’s look at what’s proposed.

Which corridors?

The proposal targets two categories of corridors. The “major corridors” includes corridors that will be home to future Project Connect light rail routes or new MetroRapid bus routes as well as any highway. So it definitely includes N. Lamar, Guadalupe, S. Congress, E. Riverside, Burnet, S. Lamar, Menchaca. It probably also includes much of Airport Blvd; Pleasant Valley south of Webberville Rd; and some other parts of corridors, such as Manor and Springdale.

The “medium corridors” include any identified in the 2012 Imagine Austin comprehensive plan: S. 1st, William Cannon, Slaughter, MLK, Braker, Parmer, E. Cesar Chavez, Anderson Ln, Jollyville, Springdale, Cameron. I’m sure I’m missing some.

Compatibility

Currently height restrictions can be triggered if there is a property that is zoned for single-family within 540 feet. It can also be triggered if there happens to be a single-family home on a property that is not zoned single-family (that happens sometimes).

The proposal would reduce the maximum distance that can trigger compatibility to 300 feet.

For properties within 300 feet of a triggering property, the new rules would automatically offer 5 additional feet of height “by right” beyond what is currently allowed, whether it’s on a large or medium corridor.

Here’s how they explain it:

In the graphic below, the light green represents the existing height limit and the dark green represents the increase in “by right” height if the proposed new ordinance is approved.

The yellow in both graphics represents the additional height that will be allowed if the project is participating in an affordable housing bonus program.

This whole compatibility conversation was prompted by a proposal, floated by Ann Kitchen, to create a second tier of the existing Vertical Mixed Use (VMU) density bonus program. Under her proposal, dubbed VMU2, developers would get an additional 30 feet of height in exchange for offering even more income-restricted units than required by VMU. Critics immediately pointed out that few developers would take advantage of that program because they would not actually be able to get the additional 30 feet as long as compatibility regs were in place.

In theory, this proposal could offer a lot more housing if the bonus programs are calibrated (don’t require too much affordable housing) in a way that makes them attractive to developers.

The problem is that on large corridors you still need to be at least 100 feet away from a triggering property to be able to build five stories. On a medium corridor you need to be 150 feet away. To get to six stories you need to be 200 feet away on a large corridor and 250 feet away on a medium corridor.

The issue is not simply how close a single-family home is to the corridor property, but the depth of the corridor property. If you have a deep lot (like 300-400 feet), then you may have enough space to construct a building that is at least 100 feet away from the house that triggers compatibility. Lots this deep are rare though, and in most cases if you try to build the U-shaped apartment (with a courtyard/pool in the middle) that is considered the most economically efficient, the back of the building will be less than 100 feet away from the property that triggers compatibility.

This means that most corridor properties will not be able to get the height they need to make a mixed-use redevelopment economical, especially if a portion of the units must be offered at below-market rates.

Thus, the single-story uses that we should all agree do not represent the highest and best use of a corridor property –– auto shops, car washes, gas stations, a standalone fast food joint –– are unlikely to be redeveloped into housing anytime soon.

“If they’re trying to do something that truly unlocks density on the corridors, this isn’t it,” said one builder.

At some point, said the builder, those sites will redevelop, but probably not in the next decade and when they do, they’ll likely be two or three stories of extraordinarily expensive condos, rather than the large apartment complexes that we need to have an effect on the middle-class rental market.

Chris Randazzo, chair of the Real Estate Council of Austin, said this:

“While we appreciate that Council is finally taking up changes to compatibility and parking, we are far too deep in a housing and affordability crisis to take half-measures when it comes to increasing housing supply. Compatibility will still affect almost every property in the very places Council has said they want new development—in high-opportunity areas and on transit corridors. The best time for bold housing policy was 5 years ago; the second-best time is now.”

From worst to worst

The document that outlines the proposal includes a helpful graphic that illustrates just how extreme Austin’s compatibility regs are compared to other large cities:

But under the proposed new rules, Austin would still be the most restrictive in terms of “by right” height. For projects that take part in the affordable housing bonus, Austin would remain more restrictive than every other city on this list except Las Vegas. Here’s a graphic someone on Twitter put together:

The nine vote obsession

Discussing the proposal at Council work session yesterday, the mayor acknowledged that it didn’t go nearly as far as some would like but suggested it was the best outcome possible right now.

“This exercise is about trying to get as much done as we can get done –– to not let the perfect be the enemy of the good,” he said.

He later added, “It doesn’t have us in court for two years. People can start applying it.”

Adler is suggesting that whatever passes must pass with nine votes to protect against a valid petition.

I don’t think that’s accurate, but I can understand why Council members who are traumatized by Fred Lewis’s successful obstruction of the land development code might believe it.

The problem with the LDC rewrite was that the city did not notify property owners. The courts also ruled that owners have the right to protest (via a “valid petition”) the rezoning of their properties.

What is not clear from the rulings is if and how those petitions would trigger a requirement that Council approve the new code with a 9-vote supermajority. In a typical rezoning, the super-majority requirement is triggered if the rezoning is opposed by either the owner of the targeted property or those who own 20% of the land within 200 feet of it.

In this case, the owners of the corridor properties are very unlikely to be opposed to being able to build higher on their land. So they’re not going to be a problem.

So what would be necessary to trigger the super-majority requirement? The city attorneys’ current view is that you’d need signatures from those who own at least 20% of the land within 200 feet of all of the affected properties, which likely number in the thousands.

If Lewis et al want to spend the time and money trying to get all of those signatures, then Council should let them try.

Or let’s say that the city attorneys are wrong, and a court would in fact decide that if if there is 20% opposition for even one of the affected properties, then that property must be voted on separately. Fine. Lift compatibility for all of the others.

This is simply excessive risk aversion. The mayor should stop obsessing about the possibility of losing a legal battle and instead think critically about the probability of losing a legal battle.

This is a free sample of the Austin Politics Newsletter from May 18, 2022. To get DAILY insights on city politics, click here to subscribe to the newsletter.

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Quartz takes a look at the spectacular crash of MiamiCoin, the cryptocurrency embraced by Miami Mayor Francis Suarez, who has relentlessly campaigned to make his city the world’s crypto capital.

…Over the last nine months, however, MiamiCoin has lost nearly all of its value, falling about 95% from its September peak to just $0.0032 as of May 13. Its rapid descent has burned investors on the way down, muting the dreams of Miami’s city leaders, and possibly raising red flags for regulators now investigating cryptocurrency transactions…

MiamiCoin is the product of CityCoins, a company that is trying to convince other cities, including Austin, to issue digital coins that, like most cryptocurrencies, have no value beyond speculation.

The way CityCoins works is that people essentially pay (with Bitcoin) to enter a raffle for the chance to “mine” MiamiCoin or AustinCoin or whatever. If you’re lucky enough to win some coin, then you can hold on to it or sell it on an obscure crypto exchange, OKCoin. Meanwhile, the participating city takes 30% of the mined coin, converts it into dollars and hopefully uses it for a good cause (Miami used it for rental assistance).

CityCoin markets itself as a no-lose proposition. After all, it’s not like the city is betting on the currency –– it’s just taking a cut of whatever others bet on it. It’s no different than a state lottery.

Well, there are already good reasons to be against government-sponsored lotteries, which tend to be a tax on the poor and mentally unwell, but at least nobody is led to believe that lottery tickets are a sound investment. That is not the case with cryptocurrency, which has been aggressively marketed as a way to get rich while declaring independence from the corrupt global financial system.

There is a small group of people who really buy into the intellectual case for crypto as an alternative to central banking, but in my experience most people but crypto because they mistakenly believe it’s a wise investment. And this delusion is fed by crypto evangelists online who talk about how much money they made by buying at the right time. You don’t hear as much from the many others who bought at the wrong time.

The government should not be promoting these delusions, even if it stands to make a few bucks off them. As much as I’m sympathetic to finding new revenue streams to fund our cash-strapped city, there are more ethical options. For instance, nonprofits that support public services, such as the Austin Parks Foundation.

Even worse than the CityCoins scheme is Suarez’s stated plans last year to let city employees get paid in BitCoin. The recklessness of such a proposal should have been apparent in November, when he floated it, but when the price is going up how can you argue with it?

Fortunately Suarez hasn’t been able to implement the policy and I imagine that the appetite for it will have diminished along with Bitcoin’s price, which has dropped by 50% since the beginning of the year.

Fortunately the city of Austin has yet to buy into anything this dumb, but Council in March passed a resolution asking city staff to look into ways for people to use crypocurrency to pay fines or pay for other city services. At best, this is likely a waste of staff resources. At worst, it contributes to the impression that converting your savings into bitcoin is a wise (or at least innocuous) decision, rather than an extremely risky one.

Today Council approved the $1.2 million guaranteed income pilot that will distribute $1k/month to 80 families for a year. It was approved on the consent agenda, with only one member, CM Alison Alter, opposed, although two other likely opponents, CM Mackenzie Kelly and Leslie Pool, were absent.

The vote followed supportive testimony from three dozen activists and regular people, including some who had benefited from UpTogether, the nonprofit that will be running the program. They told moving stories about living in poverty and the difference that cash assistance can make for people living on the brink.

One single father described getting financial assistance from UpTogether last year in the wake of his home being severely damaged by Winter Storm Uri. If not for the assistance, he suggested, he would have been able to maintain housing for himself and his daughter may have been taken away by child protective services.

All of these stories captured the tragic reality that the world’s richest country allows so many of its people to languish in poverty. All of the problems they described are an outrage. All levels of government have a moral imperative to address them. But I don’t think city government has a moral imperative to offer 80 households a grand a month for a year.

If anything, it’s frustrating to see so much attention –– from activists, elected officials, the media –– on something that will do so little.

If no other city or state in the country was already doing this, then there might be a case for Austin to lead the way in demonstrating the potential of universal basic income. But there have been many other publicly and privately-funded UBI pilots, including one run by the same group in Austin last year.

Why do we need to spend precious funds studying a program that the city is in no position to scale? Instead, we should focus on tangible ways to reduce costs for the city’s working class and poor. The most direct ways to do that are:

• rental assistance
• utility discounts through Austin Energy’s Customer Assistance Program
• affordable housing bonds to build income-restricted housing

The city can also make a big difference indirectly by making it as easy as possible to build market-rate housing. This addresses the supply crunch that is leading rents to skyrocket. New housing near public transit offers the additional benefit of offering people low-cost alternative to car use, which is a major financial burden for those on the bottom rungs of Austin’s economic ladder.

Explaining her opposition, Alter noted that the city can’t fill key positions –– from lifeguards to 911 operators –– because it doesn’t have the money to pay competitive wages.

“I believe that we do need to invest in people and their basic needs but I’m not sure this is the right way at this time,” she said.

That’s a good start. The next step would be for Alter to recognize that the city’s staffing crisis also has a lot to do with her and others’ refusal to address the housing crisis.

One last point: this is a program that has little policy impact but potentially heavy political consequences. It just feeds the narrative of an out-of-touch City Council pissing people’s tax dollars away. It’s no surprise that media outlets that barely pay attention to City Hall are covering this story. It’s an easy controversy. Hell, Fox News wrote something up on it!

It’s impossible to completely avoid manufactured outrage from the likes of Abbott and Mackowiak –– or even genuine backlash from unhappy constituents –– but why make it easy for them?

The U.S. Department of Housing and Urban Development has released new income limits by metro area for affordable housing programs. Somebody who doesn’t know better might regard the figures in Austin as evidence that people here are moving up the economic ladder.

In the past year the median income for a family of four in the Austin-Round Rock metro area has jumped from $98,900 to $110,300.

No, I don’t think the median Austin resident saw their wages increase by 11.5% in the past year. Rather, the income increase reflects an influx of new wealth and the ongoing flight of the poor and middle class.

There are of course other numbers that help explain this outcome, notably the 56% increase in home values over the past year and the harder-to-nail-down-but-still-massive increases in rents.

Even in the absence of hard data, all you need to do is look around your neighborhood to understand what’s going on. The people moving into the new McMansions are richer than the people who moved in 10 years ago.

That is the result of market trends but it’s also a policy choice. The city of Austin could allow developers to replace the bungalows they’re tearing down with fourplexes or sixplexes that would be affordable to a greater range of incomes. Instead they’re only allowed to replace them with one or two $1M+ units. The city could prioritize housing over views of the Capitol. It could get rid of “compatibility” standards that encourage developers to build gas stations over apartments on our major transit corridors.

Thus, in defense of a certain architectural or aesthetic character, Austin’s zoning is in fact guaranteeing the transformation of your neighborhood’s cultural and economic character.

With new wealth comes … the same tax revenue

Unfortunately, the richer people and higher property values don’t necessarily translate into more tax revenue for city government, which is on the brink of a staffing crisis because wages for city employees are out of sync with the bonkers housing market.

The city only has two ways to get around the 3.5% year-over-year property tax revenue limit imposed by the state. First, it can authorize a tax rate election to get voters to approve an increase over that limit. For obvious reasons, that’s not something you can count on every year. There’s a much more compelling option, both politically and economically: new development. New construction –– whether it’s your kitchen renovation or a downtown skyscraper –– is exempt from the 3.5% cap.

And, at the risk of belaboring the point, new construction delivers benefits beyond new tax revenue: much-needed housing.

I took a look at city property tax revenue generated by new development in recent years:

• FY 14: $8.9M
• FY 15: $8.4M
• FY 16: $13.7M
• FY 17: $13.9M
• FY 18: $12.2M
• FY 19: $16.6M
• FY 20: $15.1M
• FY 21: $21.5M
• FY 22: $21.4M

City Council should ask staff to conduct an analysis of what policies could help the city generate more tax revenue from new development.

For instance, while there are state-imposed Capitol View Corridors, the city has imposed additional ones that in some cases significantly constrain the height of downtown development. What would be the tax implications of eliminating or relaxing those? But I like views of the capitol! So do I. But how much are you willing to pay for them, either in increased property taxes or a reduction in services (parks, police, EMS, fire).

The same analysis would be useful for compatibility standards. How much tax revenue are we losing out on by limiting the height of buildings on our major corridors? Limiting the height of a development on a corridor because of a single-family home 540 feet away not only results in a reduction in much-needed new housing; it is a tax subsidy to preserve that homeowner’s view.

This is a free sample of the Austin Politics Newsletter from April 20, 2022. To get DAILY insights on city politics, click here to subscribe to the newsletter.

This is an excerpt from the March 9 edition of the Austin Politics Newsletter. To get daily breaking news and analysis on city politics, click here to subscribe. 

Recently the Planning Commission discussed a proposed reform of the Vertical Mixed Use density bonus program aimed at increasing the number of both market-rate and income-restricted units on major corridors throughout the city.

VMU has been around for well over a decade but, like most of the city’s density bonus programs, it has hardly been a game-changer in addressing the housing crisis.

Currently, projects that participate in VMU enjoy relaxed site development standards as long as they offer 10% of their rental units at 80% of the area median income and ground-floor retail or office. If we’re talking about for-sale units, then 5% must be affordable at 80% AMI and 5% must be reserved for those at 100% AMI.

The new deal

The proposal being discussed at Planning Commission, which was crafted by city housing staff, envisions a new program with two tiers. The first tier, VMU 1, would require 10% of units affordable at 60% AMI for rental developments and either 10% at 80% AMI for for-sale development or an equivalent fee-in-lieu.

Here are the most recent income levels in the Austin metro area:

Nobody seems too bothered by the prospect of a steeper affordability requirement. It’s very likely that the market units are already affordable to those at 80% AMI and many developers seeking VMU zoning have already been offering to provide the affordable units at 60% AMI.

Keep in mind that despite the name, you don’t get any extra height for VMU. So you’re allowed to go only high as the base zoning allows, which in most cases on the corridors is 60 ft.

VMU2

Hence the proposed second tier of VMU: VMU2. Under this program, developers would get an extra 30 feet of height in exchange for even greater affordability requirements: either 10% of units for those at 50% AMI or 12% of units at 60% AMI. For ownership units, you’d have to offer 12% of units at 80% AMI or an equivalent fee-in-lieu.

The compatibility conundrum

The impact of VMU2 will be severely limited unless it is exempt from existing compatibility requirements. You’ll recall that “compatibility” is a rule that limits a building’s height based on its proximity to a single-family house.

A single family home that is as far away as 420 feet can prevent you from getting to 90 feet of height.

Indeed, according to city staff, two-thirds of properties that are currently eligible for VMU2 wouldn’t be able to achieve the full 90 feet due to nearby single-family houses. In fact, 59% of VMU-eligible properties can’t even go up to the base height max (usually 60 ft) due to compatibility:

Further analysis of this issue comes from Michael Gaudini, a land use lobbyist for Armbrust & Brown (and ironically a former aide to CM Leslie Pool and a manager for Kathie Tovo’s 2018 reelection).

The first column on the left of this graph shows the total amount of city land that is zoned for a use that triggers compatibility (single-family), while the second shows the total land that is zoned for any of the city’s density bonuses. The small green column represents land zoned for VMU and the nearly invisible purple column on the far right represents VMU-zoned properties that would be able to take advantage of the VMU2 height bonus.

Gaudini then shows what the impact means on specific corridors. Here he looks at all the land within a quarter-mile of Burnet (blue) and South Lamar (orange). Because there are so many single-family homes within that distance, very few properties are able to go up to 60 feet, let a lone 90 feet.

Of course, the other big problem is that much of the corridors aren’t zoned for VMU to begin with. That’s because the city has largely left it up to Neighborhood Plan Contact Teams to decide where to allow it. Sure, developers can still seek to rezone to VMU, but they are reasons they would shy away from that –– there’s always the chance it will become a contentious, expensive battle that might ultimately fail. It might just be a better bet to build a Walgreens.

The image below shows how little (red) of Burnet Rd is currently zoned for VMU and how even less of it (green) would be able to get to 90 feet under the proposed VMU2.

All of this goes to show that zoning for density on the corridors might not change much unless you are willing to address certain other rules that restrict what can be built.

The Planning Commission merely kicked off the conversation last night, but they’ll hopefully be taking action and making a recommendation at their next meeting on March 22. It will then be up to Council to act.