Prop B passes. Strong mayor crushed. What does this mean?

Everyone I was talking to expected Prop B to pass. The 57-43 result ended up being closer than I expected.

Austin’s political establishment, including most members of City Council, had essentially conceded this race before voters cast their ballots. Sure, Casar and Harper-Madison vocally opposed it and the mayor made a few statements against, but everyone else mostly kept their heads down. The only anti-B group barely raised any money; none of the usual suspects who give to liberal causes opened up their wallets. They all expected it to pass and many supported its passage.

The comments from former Democratic Party Chair Harold Cook reflect what I’ve heard from a lot of others in the Democratic tent, including activists, politicos and regular voters.

And yet…the only strong mandate comes from West Austin…

And yet, one should be wary of reading too much into the results of a low-turnout spring election. For a May referendum, 25% turnout is not bad, but those voting are not at all reflective of the city as a whole. I do not yet have a thorough breakdown of the precinct-level numbers yet, but what the data will invariably show is that those who voted were much whiter, much older, much wealthier and much more concentrated in West Austin than the general population.

Just look at this map:

Map by Eli H. Spencer Heyman. Twitter: @elium2

In fact, east of Mopac, Prop B narrowly failed! It likely also failed in five of the 10 Council districts, but the much heavier turnout in the wealthiest neighborhoods in the city sealed the deal for Prop B.

So while the backlash to the camping situation is definitely a meaningful political force that has activated Austin’s conservative minority and even pissed off a lot of Dems, it’s very likely that Prop B would have failed in a November election.

So…what actually happens now?

I really have no idea. Again, a lot of the camping that has angered people the most is illegal under current rules. They are more a result of the city’s decision, in accordance with CDC guidelines, to not try to move homelessness camps during the pandemic.

It really depends how the city in general, and APD specifically, decide to enforce the rules. Remember, there were homeless people sleeping on the streets before Council lifted the camping ban. What you didn’t see were large encampments with tents.

But in all seriousness, now it’s time to focus on what is actually important: getting people connected with housing. And it’s time for Council to turn up the pressure on City Manager Spencer Cronk and city staff to get the job done. More on that in the coming days…

Strong mayor gets crushed. And some other interesting stuff…

Wow. I knew strong mayor was going down, but not that bad. 86-14. That is brutal. It was going down no matter what, but the biased language Council used to word the initiative helped make it particularly lopsided. Well, that idea is dead for a generation or two.

Mayoral elections go presidential

Woah! I wouldn’t have guessed that Prop D –– moving mayoral elections to presidential election years –– would pass so easily (67-33). In fact, if you had told me that only two of the APR props would pass, I wouldn’t have guessed this one. But nobody spent any time or money opposing it.

The previously scheduled mayoral election in 2022 will go ahead. But whoever wins that will have to stand for election again in 2024 to win a full four-year term.

Aligning mayoral elections with presidential years will likely further marginalize conservatives –– both Republican-style conservatives and land use conservatives who identify as liberals. For the same reason that conservatives enjoy an advantage in low turnout spring elections, progressives benefit from high turnout elections where the electorate is younger, poorer and more racially diverse.

Let me be very clear: I am NOT saying that a preservationist/anti-growth mayoral candidate can’t win in a presidential election year. Most people who vote in a presidential election year do not have a strong position on land use or growth management policies. A well-funded candidate who says all of the right things that most liberals agree with can prevail no matter what their views on land use are.

What I’m saying is that the larger the electorate, the less salient the “defend our neighborhoods” message becomes. This was illustrated in 2018: amidst record-breaking midterm turnout, Laura Morrison got 18% of the vote after running exactly the same type of campaign that had twice won her citywide Council races in May elections.

But again, the mayor still isn’t that important of a figure. He or she is just a Council member with a slightly bigger bully pulpit. So this isn’t necessarily a major change to city politics.

Ranked Choice Voting passes … but it may be a while before it’s a reality

RCV passes 58-42! This is good news and it might eventually become great news. We don’t quite know what the legality of RCV is in Texas. Skeptics point to an opinion issued years ago by then-Secretary of State Henry Cuellar that RCV was not legal under state law. His view was that state law requires runoffs when no candidate wins a majority in the general election and that an “instant runoff” via ranked choice voting does not count.

Some disagree with Cuellar’s interpretation but let’s assume that the courts agree that RCV is not legal unless the legislature amends state law to allow it. Many assume the only way the law changes is if Democrats take over the Lege in the future. That assumption is probably correct, but it’s worth at least seeing whether there is some appetite among Republicans to support ranked choice voting. Runoff elections are just about the worst way to select local leaders and they also cost local governments a lot of money to administer. Beyond a knee-jerk opposition to anything that liberals in Austin propose, it’s not clear that Republicans should be against RCV.

Whether Republicans are willing to allow RCV likely has a lot to do with how they believe it might affect GOP primary elections. Do they believe eliminating runoffs will help the establishment or the MAGA types?

No new Council district

There won’t be a new Council district after Prop G failed 43-57. You’ll recall that Prop G was originally supposed to be part of the strong mayor initiative. The idea was that the strong mayor would not be on Council, and the new Council district would keep an odd number (11) of Council members to avoid the risk of tie votes. However, when the two proposals were split, it seemed likely that strong mayor would fail but the new council district would pass, so that Council would become a 12-member body.

It’s interesting that this one failed. I don’t know if that’s because many voters were sophisticated enough to understand the negative implications of deadlock or because they just didn’t like the idea of adding a new Council member.

The only good thing about 12 members would have been that it would have become easier to get to a ¾ majority to override valid petitions aimed at blocking development (or the land development code). Currently a ¾ majority is 9/11, whereas with 12 it would still be 9/12.

Democracy dollars fails??

I didn’t see this coming. It’s pretty embarrassing how few local leaders stepped up to support a program that aligns with everything they say they support. I think this reflects a pettiness on the part of Council members who didn’t want to support anything associated with APR due to the strong mayor initiative.

Andrew Alison, the wealthy entrepreneur who was the principal donor to APR, said that democracy dollars could be adopted via ordinance by Council. OK, but that would be a bad look coming right off a thumping at the polls. But what a future Council should do is put the measure on the ballot in 2024 when there is a larger electorate that comes much closer to reflecting the city. If there is a decent campaign behind it, it will pass easily. Just like Project Connect passed easily after two failed rail referenda.

Will May elections be a conservative weapon?

The biggest lasting impact of this election may be that it will inspire conservatives to make a habit of using May referenda to annul Council policy, including policy that is much more popular than camping decriminalization. This is definitely something Council should keep in mind when drafting policy. Just consider Prop J –– the attempt by Fred Lewis and other anti-growth activists to require a citywide vote on any new land development code. It got whupped in November of 2018, but it would almost certainly pass in a low turnout May election.

A better way for I-35

This is an excerpt from the April 22 edition of the Austin Politics Newsletter. To get daily breaking news and analysis on city politics, click here to subscribe. 

A mixture of apathy and ignorance among Austin’s political and civic leaders is putting at risk billions of dollars of downtown property and hundreds of millions of dollars in tax revenue.

I’m talking, of course, about TxDOT’s planned expansion of I-35. It is a disgrace and it needs to be stopped. Everyone, car-haters and road warriors alike, should understand that there is a much better way to do this project.

The better way: Reconnect

The practical alternative is the vision laid out by Reconnect Austin, which proposes burying I-35 from Lady Bird Lake to Airport Blvd and building an urban boulevard on top. According to Sinclair Black, the legendary local urban designer and planner who helped craft the vision, the boulevard would include three vehicle lanes in each direction while the highway underneath the cap would include five lanes in each direction, for a total of 16 vehicle lanes on the corridor.

Here’s a rendering of the reimagined corridor:

Countless benefits

I will devote but one paragraph to listing the lofty goals this vision advances before moving on to the central argument.

So, the new boulevard would reconnect the urban street grid, allowing for easier east-west travel by all modes, including foot and bike. Burying the highway will reduce air pollution and the consequent health effects that disproportionately hurt the poor people most likely to live near highways. The new boulevard will include a 70-ft median that will create another opportunity for dedicated transit lanes. The project will do away with an ugly symbol of segregation.

But the most important benefit…

Now, on to the biggest and best argument: money. Right now the space taken up by I-35 and its frontage roads has a tax value of $0. The Reconnect concept would do away with the frontage roads, thus freeing up 74 acres of the most valuable land in Central Texas to be developed.

Wait, how can you just get rid of frontage roads? Easy, the boulevard makes the frontage roads superfluous. The only reason frontage roads exist is to provide access to properties along the highway, particularly when the highway being built is replacing an existing road, as was the case with I-35. Now, instead of accessing the frontage road, neighboring businesses could access the boulevard, just like any other major corridor in town.

The Reconnect team has estimated that the new land would yield more than $6 billion in taxable value. I haven’t analyzed their methodology yet but you don’t have to be an expert in real estate economics to know that 74 acres of property in and around downtown is worth billions. In one of the few publicly-disclosed real estate deals, the Railyard Condos sold in 2019 for $1,471 per square foot. That cost applied to 74 acres = $4.8 billion.

Now, the Railyard is in an extremely valuable part of downtown, whereas other parts of the I-35 corridor are significantly less valuable. On the other hand, the price of land in Austin continues to soar and the value of property abutting I-35 should only increase when the current corridor’s major downsides (pollution, noise, ugliness) are buried and replaced with a thing that people actually want to be on and look at. So $6 billion doesn’t sound crazy; nor would an even higher figure.

In the long-term, this new land value can deliver desperately-needed tax revenue for the school district and city and county government. In the shorter-term, however, the tax generated by the new property can be used to pay for the project itself via tax increment financing (TIF).

Basically, city government sets up a Tax Increment Reinvestment Zone (TIRZ) that encompasses all of the new developable land (and possibly some neighboring properties that can reasonably be expected to increase in value due to the project). Any new property revenue derived from that zone is dedicated to paying off the project. After the project is paid off, the properties return to the general tax rolls.

Or at least that’s how TIF works for a straightforward city project. Of course, the I-35 project is planned to be funded with state and federal dollars. Obviously the city doesn’t want that to change, but if TxDOT refuses to pay for the costs of burying I-35 and building the boulevard, then the city can volunteer to take on those costs via TIF while TxDOT commits to building the highway itself, as planned.

The cap-and-stitch bait and switch

In what was likely an attempt to distract from Reconnect, TxDOT has said it will consider a “cap-and-stitch” alternative that partially reconnects the urban grid by depressing parts of the highway. The Urban Land Institute studied a version of that idea that would create 11 acres of capped segments, projecting capital costs of $260M and 30/yr maintenance costs of $53M. ULI then evaluated a potential TIRZ that would surround I-35 to pay for it and projected that the new tax revenue would fall short of covering the costs.

But the project ULI reviewed does not remove the frontage roads and doesn’t create a boulevard. It simply accepts the nonsensical premise that the frontage roads must remain, perhaps because TxDOT has insisted that they must remain.

Again, there’s no reason the frontage roads must remain. TxDOT itself has questioned the utility of frontage roads in the past, even in scenarios that do not offer a boulevard that solves the access issue. Here’s a 200-page analysis of the costs and benefits of frontage roads in Texas from 2001, if you’re interested.

Local leaders need to step up

Right now Reconnect is not getting the attention it deserves from local leaders, who appear resigned to trying to negotiate over crumbs with TxDOT. Yes, City Council passed a vague resolution describing its hope that TxDOT will consider ways to make the I-35 plan better, including by considering proposals such as Reconnect, but nothing will come of it unless local leaders and the community unite behind a viable alternative to TxDOT’s 50’s-era proposal.

I think part of the problem is that too many local leaders don’t fully understand Reconnect. They are mistakenly trusting that TxDOT has a reason for paving over more of downtown besides a stubborn refusal to consider alternatives. Until recently, my own flawed impression of Reconnect, based on what some of its advocates had said, was that it proposed some pie-in-the-sky plan to build a park on top of the highway. That’s definitely not it –– even if there will hopefully be some delightful green space included at various points in the median.

(I would be remiss to neglect an even more radical plan that has been proposed by a group of urbanists: ReThink35. That plan proposes simply replacing the highway with a boulevard. I’m going to catch some flak for saying it, but that’s not realistic politically. Whether or not they say it publicly, many of Austin’s leaders believe that an expansion is necessary.)

As TxDOT barrels ahead with this project, Austin’s leaders should look to their counterparts in Houston, who convinced Transportation Secretary Pete Buttigieg to halt a similarly misguided highway expansion project. The same can happen here, but it will likely take more than just the usual gang of highway critics. It requires our political leaders, including those who are friendly to expanding I-35, to unite behind an alternative. That alternative is Reconnect Austin.

You can read their full proposal here.

This is an excerpt from the April 22 edition of the Austin Politics Newsletter. To get daily breaking news and analysis on city politics, click here to subscribe. 

A humbling hearing at the Capitol for housing supporters

Yesterday’s meeting of the House Committee on Land & Resource Management seemed to go pretty well for those who oppose more housing in Austin. Most of the members of the committee, Republican and Democrat, either misunderstood what HB 2989 does or couldn’t make sense of the debate over it.

I am far from an expert on the Lege, but it appeared clear that most members of the committee are far from convinced that the bill, which would specify that comprehensive rewrites of city zoning codes cannot be subjected to the same housing filibuster that is used to thwart individual zoning cases, deserves their support.

For some reason the screen shot of the committee hearing is showing up very small.

The hearing kicked off with a handful of opponents testifying against the bill –- all familiar faces in Austin anti-development politics. Fred Lewis alleged that city planners, inspired by the “latest fad of New Urbanism” aimed to eliminate “single-family neighborhoods” –– “they say it’s bad for the environment and needs to be eliminated.”

For the record, the vast majority of single-family zoned lots in Austin would have remained so under every code revision presented by city staff in recent years.

Former Travis County Auditor Susan Spataro rambled incoherently about the wonders of single-family housing and the horrors of apartment living, suggesting that the purpose of the bill was to condemn all of Austin to the latter.

“It is destroying the way humans are allowed to live when you get rid of single-family homes,” she said.

Funny. Houston doesn’t have zoning and yet it has lots of single-family homes. How does that work?

Later on, she contrasted the good old days with the dystopian future planned by New Urbanists:

“You had a backyard and you know and maybe a rabbit in it or a dog or something like that. These big high rise units, these small apartments are not that. They will impact families and how people are raised.”

So just how bad does Spataro believe multifamily housing is? Should parents even be allowed to raise children in apartments?

The hallucinations and histrionics were received quite positively by committee members, who later grilled Dan Keshet, the head of Texans for Housing, on both the perception that the bill would deprive property owners of proper notice and that it would destroy neighborhoods.

Rep. Kyle Biederman, a Fredericksburg Republican who attended the infamous Jan. 6 rally at the Capitol and has proposed a referendum on Texas seceding from the union, repeatedly asked Keshet to explain why so many people were opposing the bill and asked him what was going to happen to the properties in “their area.” Keshet had to explain that he didn’t know where the individual opponents lived and how the properties in their neighborhoods were being rezoned, if at all.

“I believe if these people felt like it was going to be zoned single family, they wouldn’t be so concerned, wouldn’t you?”

It’s about the feelings man!

Later, in response to Austin home builder Scott Turner’s testimony in favor of the bill, Biederman conceded that “cities need to grow … but they don’t have to grow over the top of people and roll them over.”

The constraints that the city of Austin is putting on housing is not such a big deal, reasoned Biederman, because “home builders can build homes wherever you want, wherever you got land.”

“Regulation outside of the city is much less,” he said. “Outside the city of Austin it’s a lot easier. There’s a lot of open space around. And it just doesn’t seem fair to individuals that they have to change their lifestyle, their community because homebuilders need to be able to build homes because Texas really needs them.”

This ringing endorsement of sprawl given by Biederman is the logical conclusion of the positions taken by many of Austin’s “progressive” anti-development folk.

And yes, it’s obviously deeply ironic that a politician whose identity is based on nostalgia for the rugged individualism of the Texas frontier is so willing to sacrifice individual property rights.

The conflation of property rights with protest rights was a recurring source of confusion for members of the committee. In general it is the opponents of the bill who seek to restrict property rights by keeping zoning as restrictive as possible (single-family zoning). And yet somehow they appeared able to convince members of the committee that it is their “property right” to increase the voting threshold by which City Council rezones other people’s properties.

Most of the committee members were clearly unfamiliar with the debate around the issue and had a hard time making sense of the fact that both sides were claiming the mantle of affordability.

“Somewhere there’s some disconnect because you and the opposition have the same goals, it seems to me,” said Committee Chair Joe Deshotel, a Beaumont Democrat.

This might take a while.

Biden vs. Austin NIMBYs

This is an excerpt from the April 5 edition of the Austin Politics Newsletter. To get daily breaking news and analysis on city politics, click here to subscribe. 

There’s a lot to love about the American Jobs Act, Biden’s sprawling $2 trillion infrastructure package. It represents the type of massive investment in America’s physical and human infrastructure that hasn’t occurred since the 1960’s. It’s the Green New Deal in all but name. The only thing missing, as far as I’m concerned, is a dedicated fund for pedestrian and bike infrastructure, but I hope that changes.

In addition to combating climate change, stimulating the economy and making America more globally competitive, Biden has framed the package as a generational opportunity to reduce racial and economic inequality. Some of that comes courtesy of investments that disproportionately benefit the poor: public transit ($82B), affordable housing ($263B), home health care ($400B).

But Biden is also proposing programs specifically aimed at redressing past injustice, such as highway projects that demolished minority neighborhoods (I-35, Mopac) and/or separated them from opportunity (I-35).

Here are a few words of which Austin’s leaders may take particular note:

So apparently the White Knight we thought was saving our democracy from the Orange Menace was just a developer shill all along.

(Take a moment to consider the irony: it was actually Trump, the real estate developer, who embraced the defense of single-family zoning as a campaign issue)

Liberal defenders of exclusionary zoning in Austin may be inclined to dismiss this as an unfortunate vestige of Biden’s centrist tendencies. After all, the guy went along with much of the Clintonite neoliberal agenda of the 90’s (NAFTA, financial deregulation, welfare reform) and stood apart from the other Democratic frontrunners in 2020 by avoiding attacks on big business and the 1%.

Alas, Austin NIMBYs won’t get much comfort if they look further to the left. Biden’s plan mirrors a bill proposed by Elizabeth Warren in 2018, which if passed would set up a $10 billion competitive grant fund aimed at encouraging cities to reduce barriers to housing production, such as:

  • “revising or eliminating off-street parking requirements”
  • “revising minimum lot size requirements and bans or limits on multifamily construction to allow for denser and more affordable development,”
  • “instituting incentives to promote dense development, such as density bonuses”
  • “allowing accessory dwelling units”
  • “streamlining regulatory requirements and shortening processes, reforming zoning codes, or other initiatives that reduce barriers to housing supply elasticity and affordability”

In both Biden’s proposal and Warren’s bill, there’s a lot of room for interpretation. Austin’s zoning code is certainly restrictive, but it’s certainly less restrictive than, say, Woodbridge, Conn., a suburb of New Haven, where the minimum single-family lot is 1.5 acres.

But the message from the national Democratic Party is unequivocal: exclusionary zoning is a barrier to equality. It’s not something that any elected Democrat should support, let alone devote their political career to saving.

The growing chorus on behalf of housing justice in liberal/Democratic circles bodes well for supporters of reform in Austin. No, it’s not going to change Kathie Tovo, Alison Alter and Leslie Pool’s minds about the land development code (although I could see it affecting Ann Kitchen). But if their message is fundamentally at odds with that coming from liberal media outlets and national liberal leaders, it will make it harder for them to recruit a new generation of anti-density leaders.

If supporters of reform in Austin want to finally move the ball, they should jump all over this. The old adage that “all politics is local” has in recent years been flipped on its head: all politics is national. Most people consume more national political news than local news and they feel a stronger association with national political leaders than with local elected officials. Therefore, the best way to convince a liberal voter who only casually pays attention to City Hall that NIMBYism is not the right position is to point them to national figures they trust. This should have been apparent five years ago when the Obama administration began urging cities to reduce zoning barriers to housing, but it has become even clearer in the past year, during which a detested Republican president waged a dog whistle-infused campaign in defense of single-family zoning.

So here’s a question for City Council members: Whose position on exclusionary zoning do you support? Trump’s or Biden’s?

This is an excerpt from the April 5 edition of the Austin Politics Newsletter. To get daily breaking news and analysis on city politics, click here to subscribe. 

Natasha Harper-Madison’s biblical case against Prop B

This is an excerpt from the March 18 edition of the Austin Politics Newsletter. To get daily breaking news and analysis on city politics, click here to subscribe. 

I finally got around to watching the ATXelerator forum on Prop B — May ballot initiative to reinstate the homelessness camping ban. The online discussion pitted Matt Mackowiak, the head of the Travis County Republican Party who is leading the Prop B effort, against CM Natasha Harper-Madison and Matt Mollica, the executive director of ECHO Austin, the homelessness advocacy group.

Mackowiak, a professional political consultant and frequent talking head on local TV, was characteristically insolent and hyperbolic, displaying contempt for both the people he was talking with and the people he was talking about.

To hear Mackowiak tell it, City Council’s repeal of the camping ban is responsible not only for the proliferation of homelessness encampments in public places but for the homelessness crisis itself. He says Austin has become a “magnet” for homeless people from around the state and country. He specifically claimed that there are “nonprofits” around the country facilitating this by “putting the homeless on buses to cities they want to go to.”

“There’s a program called Operation Homestead, where nonprofits put people on buses to the cities they want to go to and get them out of other cities around the country. Austin is probably the single most attractive place in the country right now for a homeless person to go, partially because of the weather but partially because of the camping ordinance, which basically allows them to do anything they want, anytime they want, anywhere they want, with very, very few restrictions and almost no enforcement whatsoever.”

Mackowiak is thus describing homeless people as an invasive species that the city is allowing to spawn. It’s also remarkable to see an American, let alone a Texan, let alone a Texas Republican, express horror at people exercising freedom of movement and of a government that allows people “to do anything they want …. with very, very few restrictions.” Isn’t that the story of Texas that Greg Abbott tries to tell every day?

(Also, I’m having trouble finding any meaningful evidence of the bussing homeless people to Austin operation that Mackowiak referenced. The only “Operation Homestead” that my trusty Google is turning up is a group of activists who took over vacant buildings on behalf of Seattle’s homeless in the early 90’s. I have requested more information from Mackowiak; he hasn’t replied yet.)

And yet, despite all of the dehumanizing language, Mackowiak insists that he cares about the homeless (“I’m a Christian”) and that lifting the camping ban has actually made life worse for them.

Harper-Madison offered a respectful and compassionate contrast. She was likely the best ambassador possible for the anti-Prop B forces. I found her Scripture-infused opening comment particularly strong:

“Austin is not the only city grappling with homelessness. The City Council did not create Austin’s homelessnesss crisis in 2019. Poverty has been a part of civilization long before Jesus himself declared without qualification that blessed be the poor. And despite that pretty clear statement, there’s still that stubborn theological tradition woven into American history about how being poor, is a sign of sinfulness. I think what we did is recognize that you don’t have to be rich and successful to be blessed in the love of God.”

I say this as an atheist: the language of the Bible is a far more effective tool for social justice than the language of the academy. Why? Because far more people have gone to Church and learned “love thy neighbor” than have gone to college and learned about critical race theory. The more progressives understand this, the more they’ll win.

NHM calls out NIMBYism

On at least one front, Mackowiak was right: the city is not doing a good job of housing the homeless. Some of the city’s efforts have been disrupted by the pandemic, which diverted some space designated for permanent supportive housing to quarantine people recovering from covid and just generally prompted a diversion of resources and attention. But there has been frustration on City Council with City Manager Spencer Cronk’s slow movement on implementing the plans they’ve passed to get people into housing.

Harper-Madison also stressed over and over again that the issue was “housing, housing, housing, housing, all housing types, all parts of the city.” She even conceded a common argument made by conservatives, who point to the Community First homeless community as an example of private sector success. That type of housing settlement, she said, is not allowed by Austin’s land development code, and that’s a problem.

Harper-Madison thus described Prop B:

“This ballot item won’t create new housing. It won’t invest in services … it won’t stop anyone from holding a cardboard sign at an intersection. It will simply punish people who can’t afford a bedroom in our increasingly unaffordable city.”

What’s the actual problem?

I do think there’s a good chance that Prop B passes because it’s certainly not just conservatives who are upset about the camping situation. It is awful. In my own neighborhood, the sidewalks under the highway at Ben White & Menchaca have now been completely taken over by tents. I don’t think anyone could look at that and not conclude that it is a societal failure.

But is the failure that the world’s most prosperous society has people living in abject misery, or is it that that misery is now visible? For what it’s worth, I think one can believe the greater failure is the former and still believe that there should be greater restrictions on where people can camp. Whatever the answer is, the only fool-proof solution is housing, housing, housing.

This is an excerpt from the March 18 edition of the Austin Politics Newsletter. To get daily breaking news and analysis on city politics, click here to subscribe. 

Without the outages, Austin Energy may have lost big money

This is an excerpt from the March 8 edition of the Austin Politics Newsletter. To get daily breaking news and analysis on city politics, click here to subscribe. 

It’s time to explain a few things about Austin Energy that I have come to realize most people don’t understand.

Many understandably believe that Austin Energy generates power and then distributes it to Austin homes and businesses. Therefore, they figure that if 40% of Austin lacked power during the storm, it was because AE simply wasn’t generating enough. Or they see a report about how an AE biomass plant sat idle during the storm and conclude that more Austin homes would have been powered if that plant had been running.

None of this is true. Let me explain:

  1. Austin Energy, like every other utility in ERCOT, is required to sell all of the power it generates into the ERCOT grid. It does not have the option to “keep” the power for its own customers.
  2. To power our homes, it then buys back power from the grid that comes from generators all over the state.
  3. Therefore, your home is not necessarily powered by the energy generated by AE.

As I explained the other day, during the week of the storm AE was a net generator, meaning that it provided more power to the grid than its customers (us) consumed. As a result, in contrast to the utilities (and their customers) that got crushed by the sky-high prices of energy during the crisis, AE likely made money –– money that can be invested in a way that benefits the community it serves.

This context is important when you look at the debate in past years between AE and environmentalists over how much of the utility’s generation should be renewable. AE’s reluctance to phase out its fossil fuel generators was due to the potential financial risk. They wanted to be sure that in the event of sky-high prices, they would be able to sell as much power to the grid (at the same high price) as AE customers were consuming. If you’re completely reliant on intermittent wind or solar power, you can’t be assured that your generation will meet demand in every circumstance.

But what if there hadn’t been outages?

Until yesterday, the only information I had from AE was that it was “net generator.” However, in its presentation to City Council yesterday, the utility offered more specifics in the way of this graph:

The black line represents AE’s “load,” or the amount of power being consumed by Austin homes and businesses.

CM Alison Alter made an important observation: although AE’s generation mostly exceeded its consumption throughout the storm, it almost certainly only was a net generator because nearly half of its customers didn’t have any power. Had there not been massive outages ordered by ERCOT, the utility would have been forced to buy more power off the grid than it was providing.

“While we can say that we met the needs of our load, such as it was reduced, and that’s better than what happened in other markets, it’s not clear that we would have been able to meet our needs absent ERCOT’s load sheds,” she said.

Therefore, “We were still contributing to the need for the load shed in the first place.”

Yep. AE’s status as a “net generator” during the storm was largely due to the fact that roughly 220,000 Austin homes were without power.

AE did not push back on that point, simply pointing out that its generation was hampered by the unprecedented storm.

This is definitely something important for the utility to consider in its long-range plans. If for some reason ERCOT had not ordered the outages but energy prices had still been extremely high, AE would have spent a fortune providing power to its customers but not have sold enough to cover the cost. And that might have put the utility in the precarious situation that many other utilities across the state now find themselves in. The utility would not have been able to immediately pass the cost on to customers, but it may have been forced to seek a rate hike at the next available opportunity.

This is an excerpt from the March 4 edition of the Austin Politics Newsletter. To get daily breaking news and analysis on city politics, click here to subscribe. 

New bill would make it much easier for Austin to get new code

This is an excerpt from the March 8 edition of the Austin Politics Newsletter. To get daily breaking news and analysis on city politics, click here to subscribe. 

Identical bills filed on Friday would make it much easier for City Council to adopt a new land development code.

The bill, which was filed in the House by Rep. John Cyrier, R-Lockhart, and in the Senate by Sen. Nathan Johnson, D-Dallas, amends a provision of the local government code to draw a clear distinction between rezonings “that only affect an individual lot or a limited area of contiguous lots or land” and a “comprehensive revision of the regulations or boundaries.”

The bill specifies that site-specific zoning cases could be challenged via “valid petition,” in which either the owner of the property or (more commonly) the owners of 20% of the land with 200 feet protest the rezoning. In those cases, City Council needs a ¾ majority to adopt the rezoning.

However, comprehensive rewrites of the code or code amendments that apply uniformly across the city could not be challenged via valid petition.

The city of Austin and plenty of other legal experts have argued that this was always the case. However, a year ago Travis County District Judge Jan Soifer disagreed, telling City Council that as long as property owners were objecting to their properties being rezoned as part of a new LDC, Council needed a ¾ majority to approve it. That would mean nine out of 11. That essentially put the new code on hold, since at the time there were only seven members of Council in favor.

Who’s behind this bill? Will it pass?

From my very limited knowledge of Cyrier, gleaned largely from reading his online biography, he is a fitting author of this bill. He is a general contractor by trade and has served on the executive board of the Real Estate Council of Austin in the past. I don’t know much about Johnson — this bill was not included on the list of legislative priorities he unveiled a few months ago.

I also have no read on this bill’s chances of success at this time. Because the Lege is only in session for 140 days every two years, bills that are not a top priority among the chamber’s leaders often die simply because the clock runs out.

One group that is involved in pushing for the legislation is Texans for Housing, whose board of directors includes five people from Houston, DFW, College Station and Austin. The one local is urbanist activist Dan Keshet.

It will be very interesting to see how this plays out. The traditional business-oriented wing of the GOP would be inclined to defer to industry (RECA etc) in support of this legislation, especially since they know that this is aimed at helping cities lower barriers to development, not raise them.

However, the defense of single-family zoning has become a rallying cry among some conservatives over the past year. Trump tried to extend the racial anxiety prompted by the Black Lives Matter protests into zoning, claiming that Democrats were going to “abolish the suburbs,” and force middle class people to live near undesirables. Empower Texans, the far right pressure group, has expressed support for those fighting Austin’s new LDC, and I wouldn’t be surprised if Dan Patrick, who largely controls what happens in the Senate, is sympathetic to their argument.

Finally, what will Democrats, especially Austin-area Democrats, say about the bill? At this point, I have no clue.

So, what happens if it passes?

Immediately after the Soifer decision, Council voted 7-4 to appeal, but two of those seven (Flannigan & Garza) are now gone and it’s far from certain that there remains a majority in favor of pursuing the appeal. Mackenzie Kelly was explicit in opposing the city’s position during her campaign, while Vanessa Fuentes’ views on the LDC are less clear.

If this bill passes, all of the questions about the appeal and the lawsuit become moot, but the fight over land use reform would be far from over. There are only five members of Council who support the new LDC, while four (Tovo, Pool, Kitchen, Alter) are opposed and the two new members have expressed varying degrees of opposition.

The big question mark is Fuentes, who has said she believes there must be more market-rate housing in all parts of the city but said she wanted to see greater anti-displacement protections in the new LDC. What would it take to get her on board? And does Adler have the stomach to approve a new code 6-5?

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

Thanks to Austin Energy, we aren’t facing huge electric bills

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

 

I’d like to circle back to something an Austin Energy spokesperson told me last week:

Preliminary analysis indicates that Austin Energy was a net generator during the event. Based upon what we currently know, we do not anticipate any negative impacts regarding Austin Energy’s ability to continue to operate and to meet outstanding financial obligations.

It’s worth pondering that for a moment. Although I do think AE needs to answer some tough questions about how it managed the outages, it’s good to know that at the very least, after the hell that half of Austin endured two weeks ago, people can rest assured they won’t get hit with a financially devastating utility bill.

The historic Seaholm Power Plant, which is no longer in use.

Elsewhere in Texas, many of those who were lucky enough to have maintained power during the storm are now confronting four or five-figure bills. In fact, even some who lost power got hit hard. The Texas Tribune explains:

As the bad weather bore down, it froze natural gas production and wind turbines, choking off the supply of electricity as demand skyrocketed. In response, the Public Utility Commission, appointed by Abbott, let the wholesale market price of electricity rise to $9 per kilo-watt hour, a 7,400% increase over the average 12 cents per kilo-watt hour.

Karen Knox, a special education teacher in Bedford…lost power during the crisis but still owes some $7,000 to Griddy, an electricity provider located in Houston.

At first, it may seem like the surge in prices only hurt those poor souls on “variable” electricity plans. Indeed, there is no shortage of smug market fundamentalists who would shrug at these people’s misery, insisting they are not in fact victims but rational market actors who made a risky bet.

But actually, many Texans on fixed rate plans may see their bills go up in the coming years. From the Tribune:

Kaiba White, an energy policy specialist with consumer advocacy group Public Citizen, said the costs would be passed on to customers one way or another.

“If they [the electric provider] don’t have a mechanism that allows them to do that in the immediate — like on the next bill or the next several bills — it’ll end up getting rolled into the overall cost of service,” she said. “It’s just a matter of whether it’s going to get passed on in an immediate way, in a shocking way … or spread out over time.”

Now, at least one expert I talked to disputed this, saying that the competition in the retail electricity market is fierce enough that companies may just eat the huge costs they incurred during the storm and not pass them onto their customers. But some of them won’t be able to afford to do that. For instance, Brazos Electric Power Cooperative, the state’s oldest and largest power co-op, just declared bankruptcy and it sounds like it’s not going to be the only one. From Reuters:

The state’s grid operator, Electric Reliability Council of Texas (ERCOT), on Friday said $2.1 billion in initial bills went unpaid, underscoring the financial stress on utilities and power marketers. More providers likely will reject the bills in coming days, executives said.

“The municipal power sector is in a real crisis,” said Maulin Patani, a founder of Volt Electricity Provider LP, an independent power marketer that is not a member of the Brazos coop. ERCOT should suspend the service charges to halt further defaults, he said in an interview on Sunday.

In other words, it’s likely we’re going to need a state bailout to keep many of these utilities afloat. Hooray for the free market.

Meanwhile, the People’s Republic of Austin and its customers don’t have this problem. Why? Because, according to what Austin Energy has said, the city-owned utility likely made money during the storm. You see, AE is both a generator and a distributor. It owns power plants that generate power that it, like every other Texas generator, is obligated to sell into the broader ERCOT market. But it simultaneously buys electricity from the ERCOT market to power Austin homes and businesses.

Thus, when prices are high, AE is paying up the wazoo for electricity like all other utilities, but it is also flush with cash from the money it’s making selling the energy it’s generating from its power plants and wind farms. Are you following me?

Now, if AE’s generators had all gone offline during the crisis, the situation would be very different. Austinites wouldn’t have been hit with high utility bills right away, but AE may have faced a serious financial difficulties that could have forced City Council to hike rates, perhaps substantially.

Here’s what Robert Cullick, who was AE’s comms director from 2014-19, says:

We need more information from the City. The news that Austin was a “net generator” during the freeze could be very, very important. On the face of it, It means that when power jackknifed from $40 to $9,000 per unit, Austin Energy may have been selling as well as buying. That would have protected consumers against the price gouging that was occurring in the market. That would be great. But we have to find out which plants were producing power. If the units that were producing were coal, gas or nuclear-powered, the freeze raises political questions — these are the very units that environmental lobbyists are pushing the Council to close prematurely because they prefer renewable sources. We deserve the whole story.

Well, to be fair, renewable sources aren’t merely a preference. They’re a moral imperative and, most of the time, they’re cheap, which is why utilities have invested so heavily in wind power in recent years. However, it is true that we likely do not have the storage technology yet to rely entirely on renewables. We still need to have sources that can be dispatched at any time, whether the wind is blowing or the sun is shining.

So if it was the coal-powered Fayette Power Plant or the one remaining unit of the gas-powered Decker Power Plant that kept AE (and its customers) from losing its shirt during the storm, that certainly makes it harder to vociferously campaign for their closure, as environmental groups have done in recent years.

TO BE VERY CLEAR, all of the above has very little to do with whether Austinites kept their lights on two week ago. Austin Energy’s ability to produce power does not have any direct effect on whether its own customers have power because it is obligated to sell whatever power it generates into the broader ERCOT grid. So, the overall effect of AE’s success as a generator during the storm was that it helped to stabilize the statewide grid and it prevented financial disaster for the utility and its customers (you and me).

At the very least, one should hope that AE’s apparent ability to perform while so many of its peers failed means that we will no longer have to live under the continual threat of privatization by the legislature. After all, at least we’re paying our bills.

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

Heads roll at ERCOT. Don’t fall for it.

Five members of the ERCOT board who aren’t Texas residents have resigned in response to outrage over last week’s disaster.

I will concede, it is extremely unbecoming of ERCOT to resort to out-of-staters to fill its board. This is a state of 30 million and the historic energy capital of America. Are there really not enough qualified candidates in that pool?

Our state leaders are peddling these resignations as a meaningful response to last week’s crisis. They are hoping that the crisis will be interpreted by voters as simply the result of absentee leaders being asleep at the wheel.

Don’t fall for it.

First, ERCOT does not have meaningful regulatory power. It’s the Public Utility Commission, whose board is appointed by the governor, that calls the shots. Here’s what one longtime energy insider tells me:

“Essentially the PUC gives (ERCOT) the ability to write rules. However if the rules are controversial then they can be appealed by anyone to the PUC. So practically that means they mostly write technical rules or small ball rules. Big policy items are at the PUC.”

ERCOT’s job is to prevent the grid from collapsing. Last week, it did its job. It does not have the ability to force utilities to generate or store power in anticipation of the type of major surge in demand that took place last week. When Texas deregulated its electricity market 20 years ago, it placed its faith in the market addressing that issue. Last week the market failed, and it will fail again unless significant changes to the system are made.

In many other states, utilities are paid to have additional energy capacity that may not be useful 99% of the time. In other words, when customers pay their electrical bills, they are not just paying for the energy they are using, but for the investments the utility has made in preparation for an emergency. In Texas, power generators aren’t required to prepare for major demand surges, but they are incentivized to do so; when demand skyrockets they are able to sell their power for a fortune to power distributors.

Texas’s system is supposed to result in lower prices most of the time. In practice, it may have resulted in lower prices for large commercial customers but it has not resulted in lower utility bills for your average residential customer. From today’s Wall Street Journal:

Texas’s deregulated electricity market, which was supposed to provide reliable power at a lower price, left millions in the dark last week. For two decades, its customers have paid more for electricity than state residents who are served by traditional utilities, a Wall Street Journal analysis has found…

…Those deregulated Texas residential consumers paid $28 billion more for their power since 2004 than they would have paid at the rates charged to the customers of the state’s traditional utilities, according to the Journal’s analysis of data from the federal Energy Information Administration.

Robert Cullick, who oversaw communications at Austin Energy from 2014-19 and had a similar role at the Lower Colorado River Authority from 1991-2001, described the state’s system thus:

“Power is generally cheap, except when it’s extraordinarily expensive. Power is generally reliable, except when it’s off for four days.”

The good news for Austinites is that not only are Austin Energy rates codified by city ordinance, but because AE is both a generator and a distributor, it both sold and purchased power at last week’s exorbitant rates, meaning that it did not suffer the crippling financial losses that some purely distributor utilities are now passing onto customers. (In other words, AE generates power, which it sells into the ERCOT grid at whatever the market rate is and then it buys the energy back to distribute to its customers. Yes, it’s confusing)

The bad news is that we will likely face power outages again –– just like we did in 2011 –– unless the state imposes new requirements on utilities that it is willing to enforce. For instance, it could mandate that power generators make certain investments to protect their plants from cold weather. But those requirements need to be accompanied by accountability, either in the way of inspections or major penalties in the event that a generator goes offline.

None of these changes will occur by changing who is on the board of ERCOT.

“This is going to take a thoughtful discussion about how much risk I am willing to take in exchange for the few dollars (a month in savings),” says Cullick. Scapegoating ERCOT or renewable power is a distraction from that necessary discussion, he adds.

So far Abbott is not talking about making the type of switch to that type of “capacity” system.

He is, however, talking about requiring winterization — and even providing state funding for it. Having the state pay, rather than utility customers, is a more progressive cost structure. But is this going to be a long-term commitment from the state or just a one-time injection of assistance whose usefulness will wane over time as facilities age?

Cullick’s concluding remark: “I for one am going to Lowe’s to buy a generator.”

EMS union prez describes harrowing week during storm

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

In response to a newsletter from earlier this week, in which I referenced the blasé attitude expressed by some about last week’s disaster, Selena Xie, president of the Austin EMS Association, sent me an email detailing her experience as a medic during the storm.

Here are her words, verbatim:

Early Monday, power shut down for many Austinites. I jumped on an ambulance to start responding to emergency calls at around noon. While our shift started at 10 am, the ambulance had been t-boned by a vehicle that lost control. We had heard of crews holding over for over 4 hours working over 28 hours straight, with no rest.

Our first 911 call was someone who lost power. He was reliant on his oxygen concentrator to live. His oxygen levels started dropping without it. Our ambulance got stuck going up a hill that had snow deceptively covering ice. After two hours, one of ATCEMS’s 4x4s was able to extract us. By the time we reached the patient, his oxygen levels were half of what is normal. As we rode into the hospital, I tried every form of oxygen, trying to get his levels up to a place that would be safe (or safe for intubation if necessary).

Austin EMS Association President Selena Xie.

Our second patient was a bone cancer patient who couldn’t get his pain meds refilled due to the road conditions and he was in agonizing pain. Our third patient was on hospice and expected to die in a few days at home comfortably surrounded by loved ones. When his oxygen that was making him comfortable went out, he started making awful grunting sounds. It is not acceptable to die like that, in agony. We had no other options at the time than to take the person to the hospital to keep him comfortable, but not before we let his wife cry against his chest for 5 minutes, which was all we felt comfortable sparing at the time.

Then we ran an overdose, a young woman who was brought to her limit living in her freezing vehicle that had run out of gas. Then in the evening, the carbon monoxide calls started coming in. People choosing between freezing and burning furniture to keep their families warm causing carbon monoxide poisoning.

As the next days approached, we would see our infrastructure fall like dominos – a freeze meant no power. No power meant no water, no gas, no power or water meant different type of medical emergencies to follow. Our methadone clinics and dialysis clinics closed which meant people dying or critically ill while needing dialysis. Someone asked me for help to get dialysis and the response from the hospitals was, unless you’re close to dying, you’re not eligible for dialysis.

After my shift, I slept for the whole day. On Wednesday I started thinking about how to make sure EMS crews got food (many were stranded at work or asked to work 24 on 24 off).

While getting food to crews, I got a phone call. The person’s cousin had died and 911 said there were no resources to take the body away. He didn’t know what to do. I told him his options were to wait or put the body in his vehicle and drive it to a funeral home if it was safe. I cried in my car for an hour after that. I told someone to load their loved one’s body in a car and take it to a funeral home. And honestly, that wasn’t the best advice but that was the best I could do and I couldn’t believe those words came out of my mouth in this city, in this country.

It was only Wednesday, and we would continue to see people resort to illicit drugs to stave off withdrawals from methadone clinics closing, people dying from electrolyte imbalances from lack of dialysis, our only Level 2 trauma hospital evacuating patients and closing the doors to EMS, our only Level 1 hospital almost on the same verge. It was and continues to be a humanitarian crisis and it is horrifying that there exists so much privilege that people can be blind to it.

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