Prop A = 4% tax increase. NOT 25%

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A repeated assertion by opponents of Prop A is that it will increase your property taxes by 25%. That statement is flatly untrue. 

Here are the facts: Prop A will increase the amount that property owners pay to the city of Austin by 20% but that only amounts to a roughly 4% increase in the overall property tax bill. Most of your property taxes go to the school district, and much of that goes to the state of Texas due to the state’s (still) grossly unfair school financing system. 

Again, even if we’re just talking about city property taxes, Prop A amounts to a 20% increase, not a 25% increase. The 25% figure that Prop A opponents cite includes a small tax increase that is going to happen anyway just due to the rising cost of existing government services (rising health care costs for city employees etc). 

If Prop A is defeated, there’s a good chance that confusion over this will have a lot to do with it. The opposition understands this, which is why they continue to say 25% tax increase over and over again.  

This is what greets you when you visit the website for Voices of Austin, the dark money group run by Peck Young:

And here’s former Council Member Ellen Troxclair:

I suppose Troxclair could feign innocence by pointing out that she said “Austin” property taxes but it’s still obviously misleading. Every Austin property taxpayer pays taxes to multiple entities. People see that tweet and think of their overall property tax bill, not just the amount going to municipal government. 

Evil Mopac, the wildly popular anonymous “pro-gridlock activist” Twitter account, took the former Council member to task for misleading the public:

In most media coverage that I’ve seen, the numbers have been technically correct but often confusing and may lead voters to subscribe to the opposition’s lie. Ryan Autullo of the Statesman got a lot of grief from Prop A supporters for this tweet:

Yes, it’s accurate because it says city taxes but many –– probably most –– readers won’t understand that city taxes are but a small slice of their overall tax bill. Unfortunately, a lot of Prop A supporters jumped down his throat and ridiculed him, rather than engaging more constructively in shaping the coverage. Sigh.

If Project Connect is defeated, it will likely have a lot to do with the success of this disingenuous talking point and the failure of the Prop A campaign and the media to correct it.

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Natasha Harper-Madison: Single-family zoning is rooted in racism

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A conversation about a proposed rezoning in Montopolis prompted the best impromptu description of single-family zoning that I’ve ever heard in my five years of covering City Hall.

The case involves a large lot at 508 Kemp St. After being told that Council was unlikely to grant an upzoning to facilitate a development that consisted entirely of market-rate homes, the developer entered into a deal with Habitat for Humanity to provide a mix of income-restricted and market-rate units. In the end, they proposed 33 single-family homes and duplexes, 17 of which will be restricted to homeowners making under 80% of the area median income. That’s $62.5k for a two-person household and $78.k for four people. 

Nevertheless, Community Not Commodity, the NIMBY outfit run by Fred Lewis, is still opposing it. In a blog post, the organization mocked the projected, deriding the income-restricted housing for being available to those “earning over 250 percent of the Montopolis neighborhood’s median family income.” The post further quotes an anonymous neighbor who describes the project as a “displacement scheme.”

The deceit is utterly remarkable, especially considering that it’s coming from an organization led by people who are regarded, at least by some, as members in good standing of Austin’s liberal establishment. If this project is defeated, what income range do they think the brand new market-rate single-family homes will serve? It wouldn’t be hard for them to figure out — all they have to do is ask the numerous recent homebuyers who they got to protest the project how much they paid for their homes. 

Harper-Madison took the opportunity to share some thoughts on single-family zoning. According to at least some sources, single-family zoning traces its history to a developer in Berkeley, Calif., who wanted to prevent black families from moving into neighborhoods adjoining the subdivisions he was building in 1916. He feared that lower-cost apartments serving black tenants would reduce property values. And he was particularly worried about a black-owned dance hall moving in.

I’m not usually one for long quotes, but in this case I think it’s warranted. Here’s the slightly condensed version of what she said:

“So he and the other developers, they got the city to do something that no other city ever had: they made it illegal to build anything other than a single-family home on a single lot in certain neighborhoods. So this trend, it began in Berkeley but it spread like wildfire. And that includes right here in Austin, Texas.

“And unlike the racial covenants (that existed on many properties), there really wasn’t anything explicitly racist about zoning, but what this did was it used economic segregation to separate neighborhoods in the city. Single-family neighborhoods were just more expensive because buying a house on a large lot costs more than renting or buying an apartment. And so this is about institutional racist policies, period. Wealth and race were inextricably linked. And there’s not much difference today, frankly. 

“So we’re talking about history but we’re also talking about the present. I think decades of single-family zoning in our metro area has led to an affordable housing shortage. 

“…We really are experiencing what I imagine will go down as one of the biggest movements for racial justice in our history and it’s still going strong. This is the time I think to reconcile for all the wrongs, all the things that are rooted in racism. I think Americans of all backgrounds are really engaged in a new frankly uncomfortable conversations about the role of systemic racism and we can’t miss the opportunity to call it what it is in these kinds of situations. 

“I’m often asked, ‘How can I be an effective anti-racist? How can I do my part?’ There’s obviously a lot of answers to that question but one answer should be to ditch that ’Not In My Backyard’ mentality. Embrace more dense, missing-middle housing types to accommodate more residents with less land, more affordable housing right in your neighborhood. 

“And not only would that help to put an end to our segregated communities, but it’ll also help to create more connected, more prosperous, more vibrant places live for more people in more parts of the city.” 

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Why Project Connect deserves your support

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If you’ve been a regular APN reader for a while, it’s already apparent to you that I’m a strong supporter of Project Connect (Prop A) and the active transportation bond (Prop B) that are on the ballot this year. So why am I wasting time and space on an old timey newspaper endorsement? 

First, because I know that I have a fair number of you are still not convinced of Project Connect’s merits. Second, I hope that the arguments I present will help those of you who do support it to become more effective advocates in the coming days and weeks. There’s very little you can do to change someone views on national/state partisan politics, but you can have a big impact on how your friends and family vote in down-ballot races such as Prop A and Prop B. Your cousin or neighbor or the guy you met at that party one time may very well have no opinion on the issue until they see a Facebook post from you on the matter.

Vote YES on Prop A
Opponents of Project Connect levy numerous arguments against Prop A, but perhaps their most appealing one to otherwise liberal voters is this: “Now is not the time.” 

In the midst of a deep recession and uncertainty about if and when the pandemic will end, is it really the time for a 4% property tax hike? It’s never a good time, but the alternative simply isn’t acceptable. Forfeiting the opportunity to invest in mass transit doesn’t simply commit us to the unacceptable status quo, it commits us to a future that will be significantly worse.

The Austin metro area is going to continue to grow rapidly in the coming years. As much as I hope and believe the pandemic will result in a big shift towards remote work, we’ve already seen traffic return to 80% of pre-pandemic levels and the eventual defeat of the pandemic, combined with population growth, guarantees that there will eventually be more cars on the road than there were before COVID-19. The idea that this region will double in population over the next 20 years but somehow traffic will get better is utterly delusional.

Like every other major city in the world, Austin car traffic will always be bad. Despite what this city’s gang of Know-Nothing transportation gadflies would have you believe, this is not because our city leaders “hate cars.” It’s because cars are an ideal form of transportation in low-density settings but cannot efficiently scale in large population centers. Just look at what the 26-lane Katy Freeway did for congestion in Houston: jack shit. Greg Abbott himself has said that TxDOT will soon be done building new highways, meaning that all of the state’s major metro areas, all of which deal with serious congestion, are going to have to find alternative strategies.   

To be clear, the purpose of Project Connect is not to combat car congestion. The goal is to provide a long overdue alternative to car travel because continued car-dependent growth is not sustainable. There simply isn’t enough space left in Austin to pave over with new roads and parking lots. Mass transit offers us the opportunity to dramatically increase the carrying capacity of our existing corridors, so that we don’t have to build new roads and new parking lots everywhere.

In many other parts of America, high-capacity transit doesn’t make sense economically. In a city that is approaching 1 million residents, it is the absence of high-capacity transit that doesn’t make sense. 

Beyond being the most practical response to our mobility challenges, mass transit at this moment in Austin’s history is a moral imperative.

Our car-dominant transportation system is economically unjust. It forces poor and working class families to commit an enormous share of their income to car ownership. When you take into account the cost of fuel, insurance, maintenance and repairs, there’s no such thing as a cheap car for low-wage workers. Strategic investments in mass transit will help thousands of families become less dependent on cars, allowing them to go from two to one cars or one to no cars. It’s hard to imagine a more effective form of economic relief targeting those who need it the most. 

Our car-dominant transportation system is also an environmental disaster. It dirties our waterways, pollutes our air and is the most significant contributor to global warming. It’s incredible to me that this even has to be said, but global warming poses an existential crisis. It requires every community in the world to step up. If “progressive” cities such as Austin won’t, then who are we expecting to stand up for the planet?

The past 70 years vs the next 70 years
In a recent debate hosted by the Austin Board of Realtors between County Commissioner Gerald Daugherty and mayoral aide John-Michael Cortez, Daugherty, a longtime transit critic, noted that overall Cap Metro ridership is similar now to what it was 30 years ago. That is evidence, he argued, that there simply isn’t much demand for transit among Austin’s growing population. 

Cortez replied that our lackluster transit ridership reflects the fact that we simply aren’t offering transit where people live. And why aren’t we offering transit where people live? Because over the last 70 years we have planned and grown with cars in mind. City leaders have blocked growth in the central neighborhoods that are best-served by transit and instead encouraged sprawl. The city heavily subsidizes driving via mandates that require builders to provide parking –– often far beyond what the market demands –– in residential and commercial developments. When you look at the thousands of miles of absent sidewalks, the huge city-mandated parking lots and the general misery involved in trying to cross many of our roads as a pedestrian, it’s not an exaggeration to say that cars are prioritized over people. 

It wasn’t always this way. The city’s earliest neighborhoods around downtown and the university (East Austin, Hyde Park, Clarksville, etc) were built with walking and streetcars in mind. They blended commerce and residential, apartments and single-family homes, and tended, as much as possible, to have logical street grids that make it as easy as possible to get around on foot, bicycle or (at the time) horse. 

Unfortunately, like many other cities that “grew up” after World War II, Austin bought into the idea that people would be better off living separately from the places where they work, shop, and socialize. Residential areas would be strictly separated from commercial areas. If people wanted to get something to eat, they could drive there. 

As a result, the city has continued to grow “out” but not “up.” Public transit cannot effectively serve low-density sprawl. This helps explain why our transit ridership, although it increased mightily in the first 20 months following the service changes in June 2018, has generally been stagnant over the past 30 years. 

Aha!You just admitted that Austin isn’t made for public transit! No, we already have big parts of the city that are transit-friendly and generate high bus ridership, notably the Lamar/Guad/SoCo and Riverside corridors that are being targeted for light rail. Those corridors will continue to densify in the coming years, making the future routes even more productive. 

But the thing is, these routes are just the beginning of what should be a long-term transformation in transportation and land use. We need to think not just about the next 20-30 years, but the next 50-70 years. As the population of the metro area doubles and likely doubles again, the city will be forced to change the way it accommodates growth. Unless we want to pave over Barton Springs, we’re going to have to allow more people to live in our central neighborhoods and the most logical and sustainable way to move them around is with mass transit. I understand that there is still staunch resistance to this type of change, but I am confident that that will eventually give way to the more progressive attitudes held by younger generations. Millennials and Gen Z are nowhere near as attached to the car-centric lifestyle as their parents and they feel more strongly about the threat posed by climate change.

Whether we have a new land development code in the next few years or not, Project Connect is a key investment in building a city that is able to absorb the massive population growth that is coming in a way that actually enhances quality of life, with walkable neighborhoods, green spaces, and affordable housing and transportation. That stands in sharp contrast to the alternative: more environmentally destructive sprawl that further entrenches economic and racial segregation. 

Indeed, the $300 million for affordable housing included in Prop A is just the beginning of what will hopefully be a long-term effort to provide housing near transit for those who are most likely to benefit from it. 

Betting on proven technology
Finally, I need to address the argument that “choo-choo trains” will soon be obsolete. Simply put, there’s no evidence that that’s the case. Those who make such claims conjure up a future in which we eschew fixed route mass transit in favor of door-to-door solutions, notably autonomous ridesharing vehicles. But they never explain how that system will resolve the geometric challenges that bedevil today’s cars or why it will be more affordable than today’s Uber and Lyft. The prices Uber and Lyft currently charge are not low enough for regular people to use on a day-to-day basis and yet neither company has ever turned a profit. The prospect of driverless cars cuts out one big cost (the driver) but presents another major cost that they have thus far avoided (the vehicle itself). Ridesharing, autonomous or not, is an important part of the mobility mix, but it’s not a substitute for mass transit. 

Light rail is still the best bet we have. The technology governing whatever runs on those tracks will inevitably change in the coming decades, but what’s important is that we dedicate the right-of-way and reserve it for moving large numbers of people in an efficient, sustainable way. It’s the least we can provide to future generations. 

You can read more about Prop A in this lengthy Chronicle article I wrote the other week. 

Please Vote YES on Prop B too!
Prop A isn’t the only important mobility initiative on the ballot. Prop B is another long-overdue investment in multi-modal transportation. The $460 million for sidewalks, bikeways, urban trails and safety improvements will make it much easier for Austinites to get around on foot, wheelchair or bike.

Like Project Connect, Prop B is both a practical investment and a moral imperative. Practical because this type of infrastructure is extraordinarily cheap but, if done right, can have a meaningful effect on the number of people who walk or bike instead of drive. The key investments in urban trails and bikeways are particularly important: it’s been proven in cities throughout the world as well as in public opinion research that people will bike if they feel safe from cars. That sense of safety is what protected bike lanes and urban trails provide.

No, for the umpteenth time. Not everyone is going to start biking everywhere. That’s not the point. But wouldn’t you like to have the option to bike at least sometimes? Or at least feel safe letting your kid bike to school or to a friend’s? 

Making it comfortable and easy to bike is a great act of economic and environmental justice. It’s an extremely cheap way to get around and I believe it will become even more popular, even in the hot summer months, as electric bikes continue to drop in price. Believe me –– I got one in January and it was the best $1,200 I’ve ever spent. In the coming years they will only get cheaper and the prospect of biking will become attractive to an even larger share of the population because of the speed and comfort e-bikes offer. But we need to have the infrastructure in place first.

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There’s no evidence Austin’s Black population is declining again

Since moving here five years ago I can’t count the number of times I’ve heard people say that Austin’s Black population is in decline. The claim probably hasn’t been true for at least a decade, but it’s still treated as unassailable fact in many conversations about the city’s future. 

Part of the confusion is due to the fact that there was a significant exodus of black residents in the first decade of the 21st century and that an academic study examining that decline was published in 2014, prompting umpteen rounds of navel-gazing among the city’s political class about how Black Austin could be saved. 

The good news is that, beginning four years ago, we started to see evidence that the Black population was growing again. Here is what I wrote at the time: 

…city demographer Ryan Robinson explained to Council members that the black population within Austin’s city limits increased by an estimated 8,000 in the four years following the 2010 census. In the entire Austin metropolitan area, it grew by an estimated 20,000.

The figures are not based on a survey as comprehensive as the decennial census, but rather on estimates from the annual American Community Survey. The margin of error for the estimate of the city’s total black population from the (ACS 1-year estimate) was +/- 4,771. The five-year estimate from the American Community Survey, which only has a margin of error of +/- 2,036, estimated that the black population had grown by roughly 7,000. 

As you can see, the margins of error are very big, particularly for the 1-year ACS estimate. The 1-year estimates are OK for analyzing trends for much larger population groups, but they’re really not supposed to be used to look at something as small as Austin’s Black population. 

But that’s exactly what the Statesman did two weeks ago, resulting in an alarming claim that the Black population is once again dropping fast (emphasis mine):

The latest numbers show an abrupt about-face for Black residents in Austin. From 2010 to 2018, the number of Black residents grew 29%, from 63,504 to 82,148 — outpacing the city’s overall population growth, along with increases in Latino and white residents. The 2019 numbers show a sudden decrease of nearly 5,700 Black residents.

It looks like what they did was simply take the figures from the 2019 ACS 1-year estimates (below):

And then they compared them with the figures from the 2018 ACS 1-year estimate:

But just check out the margins of error in the right-hand column. The 2019 MoE is +/- 6,997, which exceeds the total change in population the Statesman is reporting.  

The ACS comes out with new 1-year estimates every year and they invariably show wild swings for small subgroups simply because the sample size isn’t large enough to be reliable. The 2019 estimate showed a decrease of 5,700 Black people while the 2018 estimate showed an increase of nearly 9,000. Absent a Hurricane Katrina-type population disruption, none of this actually took place. It’s just statistical noise. 

That’s why it’s better to look to the five-year estimates. If you look at the five-year estimates, which are updated each year, you’ll see a slow but steady increase in the black population throughout the decade. The 2018 5-year estimate (2019 isn’t available yet), shows 73,390 people who identified black as their only race, with a MoE of +/- 1,926. That’s up from 67,000 in the 2013 5-year estimate. 

This is an understandable oversight by the Statesman, especially given how thin the reporters are stretched by the horrible company that owns the paper. Everyone makes mistakes; my goal is not to beat up on the Statesman but to prevent another round of baseless speculation about why Black people are leaving Austin.

There’s another issue with the data that trusty Twitter pundit Julio Gonzalez Altamirano commented on:

In conclusion, the evidence suggests that Austin’s Black population has increased in the past decade, but the growth in the Anglo, Hispanic and Asian populations means that Blacks will continue to be a smaller proportion of the population than they were 20-30 years ago. 

Despite all of the problems with the 2020 census, it will still provide a much more reliable picture of population trends and hopefully put much of this confusion to rest.

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Are Convention Center projections always wrong?

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I have a number of objections to expanding the Convention Center. I was skeptical even before a global pandemic upended the convention and hospitality industry, leading hotel tax revenue (the only funding source) to plummet and prompting a massive shift towards remote work that may very well lead to fewer conventions even after the pandemic. I also don’t accept the premise that the hotel tax should be used to subsidize a certain economic sector; there are plenty of other ways to use that money that would likely deliver greater economic benefits to the community and it’s time for cities to start demanding that the state allow them greater flexibility in the use of hotel taxes. 

But let’s set those arguments aside for a moment and just focus on the case for Convention Centers. Specifically the case that is made by HVS, the consulting group that cities pay to tell them why they need to expand their Convention Centers. 

At the very least, the picture that HVS paints very often does not match with reality. The attendance and economic impact that an HVS-recommended Convention Center ends up generating often falls far short of what the consultants project.

A few recent examples: 

1. In Nashville, HVS argued in favor of a 2013 expansion of the Convention Center, projecting that the facility would be generating over half-a-million hotel “room nights” by 2017. The actual performance in 2017 was 359,000. (This discrepancy was not noted in the UT report on the Convention Center expansion that held Nashville up as a role model (pg 118)

2. In Raleigh/Durham, HVS projected that the new Convention Center would be generating 140,000 room nights by 2011. A report by another consultant in 2018, hired to consider yet another expansion, reported that the Center was generating 72,448 room nights a year. 

3. In Albany, HVS projected that the new facility would induce 104k room nights in the first three years of operations (2017-19). At the end of last year the city proudly reported the facility had generated 67k hotel stays during that time. (Granted, the new center wasn’t open the first two months of 2017) 

In its recommendation to Austin, HVS projected a far greater economic impact than another study by UT, even though both studies claimed to have use the same software program to project job-creation.  

If anybody is aware of instances in which HVS projections were met or exceeded, please let me know and I will dutifully report them. 

In some of these cases the industry defenders will say that the economic impact was good even if it fell short of projections. Fine. But at the very least we deserve realistic numbers when we’re making multi-billion dollar decisions. City Council should ask somebody –– perhaps the city auditor –– to conduct an analysis of HVS’ projections. How far off are their projections on average? We should know.    

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How to get Austin’s bike network up and running now

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In November, voters have a chance to approve a historic investment in pedestrian and bike infrastructure that will allow the city to make serious progress towards building out the “All Ages & Abilities Bicycle Network.” 

There is a hierarchy when it comes to bike infrastructure. The ideal is a wide urban trail that is entirely separated from the danger, the noise and the pollution of car traffic. Even hesitant bicyclists are comfortable riding on that. Below is the Southern Walnut Creek Trail.

Next best are bike lanes along roads that are fully protected by a continuous physical barrier. Here’s a bike lane in San Francisco that is separated from the vehicle lanes by landscaping. The bike lanes downtown on 3rd St. are about the closest we’ve got to this setup.

Elsewhere in Austin we often see protected bike lanes with either these bumps, like the ones show below on Jones Rd, or “flexible delineator posts,” like the ones on S. Congress in the photo below.

Both of these options are OK. The bumps provide a visual barrier that will deter cars, although it’s not hard to imagine a number of clueless drivers thinking it’s OK to roll over them to park.

The value of the vertical sticks depends on how many of them there are. The more space there is between each one, the less impact they likely have, both in terms of keeping motorists out of the bike lane and in making bikers feel safe. This section of S. Congress shown below, for instance, leaves a lot of room for misinterpretation.

And last, there are the temporary bike lanes that the city recently set up on Congress with traffic cones. Obviously traffic cones aren’t permanent and can be stolen, fall over or blown away, but it’s an unambiguous visual cue to drivers to stay away. 

The city recently announced that the temporary protected bike lanes on Congress will be transformed into permanent protected bike lanes (with the plastic sticks and parking stops). Which prompted this brilliant idea from a citizen:

This seems like an idea at least worth exploring. I doubt the cost of acquiring enough traffic cones to do this is high enough to cause concern.

The greater concern would be political: will people get annoyed at having to look at temporary bike lanes on their streets for years? They’re not as visually-pleasing as a proper bike lane, and traffic cones are typically associated with construction, so it might create the perception that the city is not doing its job. Which may actually be a good thing for bike advocates, since it might create additional pressure on the city to build the permanent bike lanes!

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Hotel taxes don’t belong to hotels

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City Council ultimately voted 10-0-1 yesterday, with only CM Leslie Pool abstaining, to kick off the process of acquiring land for the new Convention Center. 

As I discussed yesterday, my doubts about the long-term viability of the convention industry have only grown as a result of the pandemic. In a brief phone convo with the mayor, however, he said he doesn’t view the expansion as a major “risk” because the city is not on the hook. It is not the city that is issuing bonds to finance the Convention Center expansion, but a separate entity that is funded entirely by hotel occupancy taxes. If the Convention Center goes bankrupt, said the mayor, city taxpayers will not be forced to bail it out. 

I appreciate that. If City Council were actually putting the city’s general fund at risk, that would be an even bigger problem and I imagine the project would encounter much greater opposition. 

Still a major lost opportunity
The problem is that this project shuts the door on the possibility of reforming the deeply unjust way that we use tourism taxes. And yes, that’s what the tax levied on hotel guests is: a tourism tax. It is a tax on tourists, not hotels. They don’t pay a damn thing. It’s their guests who pay.  

The failure of policymakers to understand this distinction has hamstrung the debate. The hotel industry has brilliantly framed the taxes that hotels collect from guests as belonging to them. They frame their support of room taxes as an act of benevolence and it’s only right that the city return the favor by dedicating the great majority of that money to generating more demand for hotel business via a Convention Center. 

But the fact is that it’s not the hotels who generated that tax revenue. It’s generated by tourists and other visitors who are coming to the city to do other things. They’re not coming to Austin for the privilege of staying in the Hilton. The hotel is just one of many local businesses that is providing them a service while they’re in town to visit friends, attend a music festival etc. The hotels are just the most logical place to collect taxes on tourists. For hotels to argue it’s “their” money is ludicrous. Another way to tax tourists is to put a tax on rental vehicles –– should the government spend that money in a way that specifically benefits the car rental industry? Of course not. 

There is a major opportunity to rethink the hotel occupancy tax paradigm that we’ve operated under for decades but nobody in city leadership is interested in that. They’ve resigned themselves to playing by the rules set by the hotel industry and negotiating for crumbs, rather than just taking the whole pie. 

Local leaders in recent years have dismissed calls to reallocate money from the Convention Center by pointing to state law. It’s true that the state law on hotel taxes was written by hotel lobbyists and is geared towards helping the hotel and convention business specifically. However, past attorneys general have opined that cities have broad discretion in their interpretation of the law. More importantly, laws can be changed and in this case, it should be changed. Activists and local leaders in Austin should be leading the charge, along with allies in other cities. 

I really do think there is an opportunity for local and state elected officials to rethink the use of hotel occupancy taxes. There are certainly members of both parties who aren’t happy with the current system. The right-wing Texas Public Policy Foundation, for instance, the influential Koch-aligned “think tank” and lobbying group, is not a fan. And I’m sure that there are many elected officials in urban areas who are desperate for new revenue sources to make up for the Covid-induced plunge in sales tax revenue. If not now, perhaps three or four or five years from now, when Texas may very likely be a blue state. 

But the problem is, building a new Convention Center will shut down the opportunity for Austin to rethink how it spends tourist taxes. Building a new Center ties up our tourist taxes for another 30 years. 

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Covid schmovid. City Council wants a new Convention Center.

City Council is poised to take an important step toward building a new Convention Center. Today it is considering a resolution that would authorize city staff to enter negotiations with the owners of two properties that the city is eyeing for the future CC. The resolution authorized staff to provide up to $6.3 million in “earnest money,” which suggests they are envisioning paying as much as $600 million just to acquire the land for an expansion. 

This move comes after a meeting on Tuesday in which HVS Convention, Sports & Entertainment, the nation’s leading Convention Center consulting group, presented an economic analysis touting the benefits of a bigger Convention Center. The report argues that Covid-19 is a temporary setback for trade shows, conventions and meetings, but the industry will eventually claw its way out of the abyss and Austin will need to have a bigger Convention Center if it hopes to compete with peer cities. 

If there has ever been an instance in which HVS recommended that a city not expand its Convention Center, I’d like to see it. I have a strong suspicion that that’s a recommendation they’ve never made. Yesterday emailed Thomas Hazinski, who heads the firm’s consulting practice, to ask whether they have ever advised a city not to expand. I haven’t gotten a response yet. 

Now, technically HVS wasn’t hired to tell the city whether to expand the Convention Center or not. Council already had a report by a group of folks at UT that it used to justify the expansion last year. That report actually focused more on potential designs for a new CC, but it offered some pro forma economic analysis as well. 

You may have to zoom in to see the figures below, but at the bottom you’ll see that the UT study presents three scenarios for the number of jobs that a larger CC will create. In the “base case,” which essentially is what the report considers a middling outcome, the new CC will add 355 jobs to the local economy. In the “upside case,” they project it will add 954 jobs.

The HVS analysis was far more optimistic. Even though it projected an increased attendance of only 350,000 per year, it projected that the expansion will add 1,772 jobs to the local economy. That’s nearly twice the number of jobs that the UT study projected in its “upside” scenario where CC attendance increases by 500,000.

What explains the huge discrepancy in these projections? Hard to say. Both studies say they relied on same IMPLAN input-output software to estimate the economic and employment impact of CC expansion. 

Things were likely bad even before Covid
Considering how much taxpayers pour into Convention Centers, there’s surprisingly little analysis of their economic impact. Heywood Sanders, a professor of public administration at UT-San Antonio, seems to be the only scholar who has paid much attention to the issue over the past 20 years.

In a report that he just prepared, Sanders says that Convention Center attendance at the nation’s four largest facilities (Chicago, Las Vegas, Orlando, Atlanta) has still not returned to the levels experienced before the 2008 financial crash.

At the very least I would like to see HVS and other Convention Center proponents address these facts. The prospect of an enormous investment in an industry that was not even keeping pace with population growth before the pandemic is troubling. 

Here’s what has happened in Las Vegas since the major expansion in the early years of the century. It appears that the expansion prompted an immediate spike in attendance but that quickly evaporated in the Great Recession and has never recovered.

Sanders highlights a few major national conventions that have seen their attendance dip. For instance:

If he’s cherry-picking, I’d like to be presented with some examples that prove it. 

Even the figures provided by industry cheerleaders aren’t very encouraging. According to the Center for Exhibition Industry Research, the industry has underperformed the overall economy more often that it has overperformed it. But the convention industry suffers far greater than the overall economy during downturns. 

See below how the industry compared to GDP over the past decade. It got absolutely crushed in the years following the 2008 crash and in recent years it has generally grown at a rate slower than overall GDP. This is despite a steady stream of investment by cities to expand Convention Center space. 

So, about COVID…
The short-term impact of COVID on tourism in general and conventions in particular makes the 2008 recession look like a picnic. Hotel tax revenue, which is what is needed to fund the new CC, has plummeted. For what it’s worth, in a July assessment of the city-owned Hilton Hotel, Standard & Poors projected that revenue per room will not return to 2019 levels until 2024. 

The intense decline in the short-term is worrisome enough, but what about the long-term impact of the fundamental shift in work behavior prompted by the pandemic?

The past six months have certainly highlighted the limits of Zoom meetings. But they’ve also highlighted the opportunities. People are eager to talk with their colleagues face-to-face again, but it would be foolish to assume that everything is going to return to the way it was before. Because frankly, it shouldn’t. Being in the same room with clients and colleagues is beneficial, but it’s not always necessary. My guess is that, assuming that this pandemic is eventually resolved, more employers are going to tolerate more remote work, more flexible schedules and they’ll likely spend less on conventions.  

Here’s some more background I’ve written on the Convention Center and why local leaders insist we have no choice but to continue supporting it. 

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How the status quo bias warps our politics

How much should the city of Austin be spending on policing, based on its size and crime rate? How many police officers should it employ? How many patrol officers should be out at any given time?

If you stopped 100 people on the street and asked them those questions without providing any further context, would any of them feel any degree of confidence providing an answer? 

Consider some other public policy questions: 

  • What should be the starting salary of an Austin public school teacher? 
  • What is the appropriate sentence for someone convicted of armed robbery? 
  • How many swimming pools per capita should the city of Austin have? 
  • How much should the city spend per year to maintain its parks?
  • What’s the minimum level of math knowledge that a high school graduate should have?  
  • What percentage of city land should be zoned for single-family homes? 
  • How much should the owner of a $400,000 home expect to pay a year in property taxes?

In almost every case, few people will have strong answers to these questions if they’re presented in the abstract. Many will, however, have strong opinions in response to the following:

  • Austin City Council has slashed its police budget by $20 million. 
  • The school district board has proposed cutting teacher salaries by 10%. 
  • The state has proposed reducing sentences for those convicted of violent crimes, such as armed robbery. 
  • The city is shutting down a quarter of its pools, including your neighborhood pool
  •  The city is rezoning single-family properties on the edge of your neighborhood to allow as many as eight units per lot
  • AISD will no longer require students to take trigonometry to graduate 
  • Your taxes are going up by $700 this year 

(TO BE CLEAR: Except for the police budget issue, all of the above are imaginary scenarios. I have no idea what the AISD math requirements are, for instance)

In public policy debates, there’s always a bias for the status quo. There’s always an assumption that things are the way they are for a reason.

If a property has been zoned single-family for 40 years, then many elected officials in Austin believe that it should not be rezoned unless the developer requesting the change offers a basket of “community benefits” in return. It rarely occurs to anyone that there was never any good reason for the property to be zoned single-family to begin with. Austin is less densely populated than Dallas, Houston and San Antonio and yet efforts to modestly densify the city are portrayed as an attempt to turn Austin into New York –– or Calcutta

If the city of Austin spends more per capita on police than every other major Texas city and has a far lower crime rate, cutting the police budget still prompts outrage. Those driving the outrage –– notably Greg Abbott –– don’t have any ideas about how much Austin should spend on policing. They just know that the city is cutting, and that’s bad. They’re proposing to punish the city for cutting, but they’re not proposing to punish Houston, Dallas and San Antonio for spending less than Austin has for all of these years. 

My favorite example of the status quo bias is in transportation policy. For instance, autonomous cars are probably already safer than driver-operated cars but they will undoubtedly have to be much, much, much safer before society will fully embrace them. The tens of thousands who die each year in driver-operated cars are taken for granted. Any casualty attributed to driverless cars, however, will likely prompt widespread panic about their safety.  

Similarly, those who oppose major investments in alternatives to cars will invariably point to the fact that the great majority of Austinites rely on cars. Of course, they do so simply because that’s the only decent option we’ve provided them. Thus, an $8 billion expansion of I-35 is viewed as logical and an $8 billion investment in public transit is viewed as radical.

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No, City Council isn’t cutting $150M from the police

As Council approaches budget deliberations, there appears to be consensus on the dais in favor of a package of cuts and reallocations of APD funding put forward by Greg Casar. It includes $149M in current APD funds that could be taken away from the department in one way or another. 

But that figure is not nearly as big of a deal as you may think.

Only $23.3M of the total are immediate cuts. Nearly half of the total ($10.7M) comes from cancelling the three police academy classes in FY 2021. Then there’s $2.5M from contractuals and commodities, $2.8M in reduced overtime, $2.8M from records management and an assortment of smaller items. 

Then there’s the $79M of programs that are being “decoupled” from APD. These are programs that will continue to exist but that Council wants to exist separately from the police department. That includes Victims Services, the 911 Center, Forensics, Internal Affairs. There are arguments for and against movign these entities, but it would certainly not be fair to characterize them as cuts. 

Finally, there’s the $47M “Reimagine Safety Fund.” These are programs that have essentially been flagged for review, with the hope that they can either be reduced or eliminated in the near future. That includes $18M for traffic enforcement, another $3M for overtime, $2.2M for mounted patrol, $10.8M for training, $5.9M for park police, $1.4M for lake patrol and $3.5M for recruiting. 

How much of the “reimagine fund” will ultimately be reimagined? Hard to say. There’s a good chance that six months from now city staff will return to Council and recommend keeping those budget line items almost exactly the same. 

As I explained the other day, a good guess would be that the cuts envisioned by Council will likely result in 200 fewer cops by the end of next year. Or 1,593 cops instead of 1,793. If you’re worried about fewer cops on the street, those are the numbers you should be focused on. 

What’s going to be strange is that both sides of the debate will disingenuously argue that Council has cut 1/3 of police funding. Some will celebrate it as a radical reform while others will decry it as a dangerous step towards anarchy. In reality, the average Austinite won’t be able to tell the difference between a 1,600 officer force and a 1,800 officer force. If there are consequences, positive or negative, they likely won’t be apparent, at least not immediately. It’s no different, really, then the debate over class sizes. In that case, however, it’s liberals and teachers who are saying that our children’s futures will be destroyed if the average class size marginally increases. In this case it’s conservatives warning of chaos if we marginally reduce the size of the police force. 

In fact, the crime rate might go up (during a recession, it’s a good bet), but it also might go down. The marginal reduction in the size of the police force is not going to dramatically reshape the calculus for would-be offenders.