What good are Street Impact Fees?



A lot more people are out and about than a few weeks ago, but this was Congress Ave just north of Ben White at 8:30 a.m. That certainly doesn’t look like pre-COVID rush hour. 

COVID cases surge in Austin
Travis County experienced its two highest one-day totals for new COVID cases on Monday and Tuesday, with 118 and 164 new cases, respectively. The previous one-day high was 88 on June 1. 

The good news is that this has not been accompanied by a surge in hospitalizations so far. There are currently 91 hospitalized, 36 of whom are in the ICU and 26 are on ventilators in the five-county metro area. 

Could this be due to a surge in people getting tested after attending protests? Austin Public Health director Mark Escott says that’s probably not the big reason because it often takes a week for people to get test results. 

Unanimous support on Council for police reform resolutions
City Council’s discussion yesterday on police reform showed no signs of disagreements between Council members. At the very least, it appears that the resolutions scheduled for Thursday that call for reforms to use-of-force policies and shifting funds from APD to other public safety strategies will encounter no resistance. 

Alter says APD needs new leadership
Council members have used different words to make the point, but by my count Alison Alter became the fifth Council member to call for APD Chief Brian Manley’s resignation or demotion. She came to the conclusion, she said, after re-watching the chief’s responses to questions from last week’s meeting over the weekend. 

“We need to breathe new air into a department that time and time again has come short,” she said, highlighting the mishandling of sexual assault cases, APD’s response to the protests, use-of-force incidents, and the Tatum Report, which alleged that officers were afraid to report misconduct within the department. 

She added: “This is really difficult for me to say, but I feel that at this point in time, we need different leadership of our public safety department.”

She suggested that a resistance to “cultural change” at the department was an issue not just for Manley, but for Rey Arrellano, the assistant city manager who oversees APD, and for Troy Gay, the #2 at the department. 

Nobody on Council responded to Alter’s comments, which came at the end of the meeting. The mayor’s office declined to comment when asked whether he believed Manley should resign. 

What good are Street Impact Fees? 
Over the last four years City Council has been exploring the idea of implementing Street Impact Fees. SIFs are a fee that is levied on new development to pay for the road improvements made necessary by the project. Specifically, they are calculated based on the number of car trips that the project is anticipated to add to the existing infrastructure. 

The city already forces developers to pay for the impact their projects have on infrastructure through a convoluted “pro rata” system. However, the money the city collects from those payments can only be used for streets that are directly impacted by the project. 

A universal SIF would be different. The city could use the fee revenue on any projects that boost vehicle capacity within a six mile radius. Thus, the idea is that the city would be split into 17 districts, and the fees levied on a project could be used for a project in its district. 

The problem is, state law requires that SIFs only be used to expand car-carrying capacity by building new roads, expanding existing roads, improving access management or improving intersections. 

You can’t use a SIF to build an urban trail, a bus stop or a standalone bike lane. You can, however, use SIFs to build new sidewalks and bike lanes that are part of a project to boost roadway capacity. And at least according to an ATD spokesperson, that could include upgrading an existing bike lane from unprotected to protected. 

Could they incentivize good things? 
Driving up the cost of housing to build more car lanes is definitely not my idea of good policy for Austin. So my inclination is to view this potential change as worse than the status quo. 

There are some ways the outcomes could be less bad than expected, though. The SIF policy proposed by a task force envisions a number of ways that developers could cut their fees, including by offering some affordable housing or things that discourage car use, such as bike racks, bike lanes, on-site showers (for employers). Mixed-use developments could also be eligible for a discount.

Fees could vary dramatically by area
The fees would differ between the 17 districts based on the roadway capacity needs. Below is the anticipated median fee that would be levied for a single-family home by district. You can see it would be nearly 7x higher in Southwest District K than in Central District I. 
The good thing is that the fees go down as the units go up. Below, for instance, are the estimated median fees that would be levied per unit for duplexes and other “missing middle” multifamily. 
For larger multifamily projects, the per-unit fee would be even lower. See below. 
What’s important to remember is that the fee is only supposed to be levied based on the cost of the demand that will be generated in the next 10 years. The fee is not supposed to account for the current unmet demand or demand that is generated more than 10 years from now. 

If the city really wanted to, it could levy fees that would generate up to $1.8 billion over the next decade, staff estimates. However, the proposal that is being floated does not imagine charging the maximum allowed by state law, but about 35% of the max for residential projects and 50% of the max for commercial projects. And then there are the discounts that developers can qualify for. Taking all of that into account, staff estimates the fees will generate $285 million over a decade, only a sliver of the estimated $1.2 billion of current demand for new road capacity. 

It doesn’t seem like this is getting any pushback on Council but a lot of developers, particularly infill builders, are worried about the costs and say this will drive up the cost of housing. 

Below is another set of hypothetical projects and how they would be impacted by the new fees compared to the status quo. The IFAC Recommendation is what Council will likely be considering. 
NEWS AROUND TOWN

Lax behavior, lack of masks tied to surge in COVID cases say officials: Escott said the reopening of businesses alone is not the reason for the increase in positive tests. Also, because of it can take a week or more to receive results after getting tested, Escott said the recent spike in new cases can’t be tied to the social justice protests that began in the final days of May. Any infections that arose from the protests would be reported later this week and into next week, Escott said.“Quite frankly we also have an increase in risk-taking behavior,” he said. “People are less cautious, they’re not wearing masks as much, they’e not social distancing as much, and there not paying as close attention to personal hygiene messages like washing your hands frequently and not touching your face.”

We’ll see what things look like a week from now, after protesters start getting their results back. Q&A with Austin’s largest apartment builder: Journeyman Group President Sam Kumar said his company will probably build at least 600 fewer apartment units in Austin this year than it had initially planned.Despite that, the company is still projected to have 2,100 apartment units under construction this year, he said. That’s about the same or slightly more than Journeyman built last year.

Cool. 

Fires under I-35 left homeless with nothing. Volunteers stepped up: “During the riots, all my stuff got burnt up. My mattress, my tent – all that stuff got burnt up,” he said. “So, [I’m] starting all over – again.”Howard said he’s been living under I-35 for four months. When the protests outside APD headquarters got heated May 30, he decided to leave.

What’s interesting is that everybody seems to agree there is nothing lower than burning a homeless man’s mattress and yet many of us believe that person should be ticketed/arrested and have his belongings confiscate

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