According to the Austin Monitor Council Member Pool has joined forces with the Austin Neighborhood Council to make lobbying rules more strict. Which sounds great. Should people who make more than $1,000 in a field related to their volunteer efforts at the city be required to register? I mean if we forget that this favors kicking out the qualified in favor of the retired and wealthy, it sounds rational.

I’m 100% in favor of this as long as we include people who’ve seen more than $1,000 increase in the taxable value of their house in the past year. Council Member Pool has seen her home value go up almost $200,000 over the past 5 years. Since being elected Council Member Tovo has seen her taxable value go up over $100,000 on her homestead.

And we’re worried about the impact of people making $1,000 or more corruption our government? What about those whose policies are pricing out renters and first-time home buyers and are enriching their pockets to the tune of hundreds of thousands of dollars? Aren’t they lobbyists as well?

Currently Austin is governed by a set of standards. We have base zoning which says where you can build single-family homes and where you can build businesses. Then we have overlays such as the waterfront overlay, that says that your building has to be short near the waterfront. Then we have FLUMs and Neighborhood Plans on top of that.

FLUMs (Future Land Use Maps) and Neighborhood Plans were created by neighborhoods in a lengthy neighborhood process about a decade ago. From all accounts it was a horrible process. No one was happy with the results, and it was horribly unrepresentative.  In my neighborhood with 40,000 residents the meetings didn’t yield more than 100 participants. Many of those participants no longer live in the neighborhood and the intent of large pieces of the plan is no longer understood. Yet you still see people defending adhering to them.

A great example of why we need to chuck them is the East Riverside Corridor. One of our priorities that was set at the time was to get the Lady Bird Lake Boardwalk implemented. Mission accomplished! We did it. High fives. When I went to ask the city to remove it from our plan requirements they said they couldn’t do so without going through a massive neighborhood amendment process (multiple stakeholder meetings, etc). Things that are complete cannot be removed.

Currently the East Riverside plan has target increased density along East Riverside near the planned rail transit stations. These are the areas in peach below.

Now whether you agree with that or not, you may be asking yourself – “What if the Rail Bond fails at the polls?”

That’s exactly the problem. The neighborhood plan doesn’t change. We still have these weird density pockets around non-existent train stations. And what about maybe filling in the white spaces in between so that they match the tall buildings that are built? Nope. No change. That will require a neighborhood plan amendment process with multiple stakeholder meetings. So without rail Riverside just gets left with a weird neighborhood plan they can’t change.

We have roads and buildings that don’t appear on our maps and can’t be trivially added.

That doesn’t even get into the Future Land Use Maps (FLUMs). FLUMs are basically fantasy maps. Dreams of a small group of shareholders a decade ago. In many cases they include less affordable and multifamily housing than currently is in the base zoning. So FLUMs are already making Austin more expensive.

It’s time to chuck neighborhood plans and FLUMs. Let’s get a better system where it’s easy to build affordable housing. Where we can easily adapt to allow nice things in our neighborhood, and where people who haven’t lived in a neighborhood for decades have a seat at the table.

So I just filled out a survey to vote on priorities for our neighborhood plan. It was really difficult to find the priorities I wanted because there was a ton of cruft. We have dozens of plan items related to completing the Butler Trail (DONE), and adding Dillo (?!?) Service to East Riverside. There are also tons of items you can vote for like “stop street X from connecting to street Y”, which seems like a completely pointless thing to prioritize. Prioritizing doing nothing seems like a waste of priorities to me.

At the end of the survey they had an email address to which I could direct any questions. So I sent them an email asking how to get all this cruft out of the plan. They replied that removing things from the neighborhood plan is too hard and costs the city too much money. So we’re just stuck with these irrelevant items. And can look forward to more irrelant items being added to the list.

Although probably not. Because it’s too hard to add items to the list as well. So East Riverside shall henceforth be stuck in 2006-2008.

I realize that Neighborhood Plans only exist for NIMBY purposes. I realize that improving and fixing them is completely against the point of the Neighborhood Planning Process.

But allowing the continuation of horrible systems is not in my nature!

“Experts” in Austin with Austin Afforadbility are advocating cutting Austin’s tax rate as a way to make Austin more affordable.

I agree that we need to address affordability, but we need to do it with more abundant housing. Tax rates are not the driver of un-affordable housing in Austin. Let’s look at my house:

• In 2013 my house was valued at $168,385

• My total tax rate was 2.463200% with a final tax bill of 4,147.66 without exemptions.

• Now let’s say Austin lowered my tax rate to 2.2% (and .2% is a huge chunk since only .5% of my bill goes the COA currently).

• My total tax bill would be $3,704.47 without exemptions.

Difference of $443.19. Pretty sweet right?

• Let’s say in 2014 my house valuation goes up the maximum 10% to $185,223.50
• If the tax rate stays the same at 2.463200 my final tax bill jumps to $4562.43
• If Austin lowered my tax rate to 2.2%
• My total tax bill would be $4,074.92

An even better savings of $487.51!

Oh, but look. By my house increasing in value by 10% my tax bill jumped by $414.77 at the current rate, and $307.45 with the slashed rate. One more year of a 10% increase in property valuation and the effect of that tax cut that slashed the city revenue almost in half will be completely gone.

In less than two years of maximum increases in property value I will have completely eradicated any benefit of a significant property tax cut.

Cutting taxes is a shortcut to affordability, but it’s not a long term solution. The only long term solution for housing affordability is slowing the growth of home valuations by providing more abundant housing choices and supply. Abundant housing supply also helps not only those on fixed incomes, but the young and families as well.

I wanted to start writing some basics about how development works in our city. Because I think a lot of people have misconceptions. I used to have a lot of misconceptions. When I got out of college and rents started going up in the dot-com boom I was pissed. I was sure there was a way to stop all this condo building and get things back to normal. Surely the city was doing something wrong to make all this happen! I went looking for answers and realized much of how I thought things worked was completely wrong. Like I was a rube – playing into the hands of wealthy landowners twirling their mustaches – wrong.

Misconception 1: Zoning

I’ll admit. I used to think that if the city zoned something, that was what went there. If you re-zoned a lot as multi-family, then BOOM condos. This must be a side-effect of playing SimCity. Because in real life that’s not what happens at all. Frequently the city rezones, and nothing happens. For decades. Perhaps centuries.

Zoning only matters if developers decide they can make a profit building on an empty lot. For something to be built you need:

1) An empty lot.
2) An empty lot zoned to something useful.
3) An empty lot zoned to something useful that a developer thinks they can make a profit building on.

Everything that is built is expected to turn a profit. This was kind of hard for me to take at first. Because I like to think of human beings as nice people who do nice things. And there are like 2 of them who are real estate developers. But they don’t really make a dent on the system. 99% of the developers are driven by profit and so that’s how things work. I hate that world. But that is how it works.

Misconception 2: Zoning and Single Family

One of the biggest complaints I hear with rezoning for duplexes or condos in single-family neighborhoods is that the city wants to make everyone live in an apartment. While apartments are much more effecient and require less cost to the city in terms of maintaining sewers, electrical, and gas lines, the fact of the matter is – the city cannot change your home.

As long as you live in it. Your home will be single-family. The city cannot convert your home to an apartment.

If you like your home, and you own it, then by and large it will stay exactly as you want it until you die.

Except your grass. Even the City of Austin has ordinances about mowing it.

Misconception 3: Condos and You

Right off the bat. Everyone knows condos are bad, right? I used to think that if the city didn’t multi-family we’d have no condos and cheap single family housing for all!
But you know what? You probably know someone who owns a condo, and multiple people who rent condos. You probably think of it as an apartment. But legally underneath it’s a condo.

This is a condo:

It’s all about technical legal nonsense and has nothing to do with what the housing looks like. Julie and I were at one point building a 2200 square foot freestanding home (front yard, back yard, fence, garage…) that was technically a condo.

The apartment you lived in in college may have been a condo that was rented to you. A huge number of Austinites rent condos from condo owners. When you’re renting the different between renting an apartment and a condo is negligible.

When you carp about condos you might as well be carping about blue houses raising the cost of living in Austin. Who technically owns the land underneath the building is not what’s raising prices.

Misconception 4: Doing Nothing Is Best

In Austin there’s a conception that doing nothing is best. That building new condos near you will raise prices. And there’s some truth to that. Because remember – developers doesn’t built it until they think they can make a profit.

But there is a cost to doing nothing. Every day 110 people move to Austin. As a renter you sign a lease that contractually freezes your costs for a year or few. Home owners get 30 year mortgages that (mostly) insulate them from changes in the market. When renters leases come up for renewal they’re frequently shocked by the amount their greedy landlords have raised their rents. That’s the cost of doing nothing. Once a year homeowners with mortgages are shocked by the amount their home value went up – the cost of doing nothing again.

During the space of a 1 year lease 40,000 new people have moved to Austin. At least some of them may have more money than you and are desperate for a place to live. All year they’ve been subtly bidding up the price of your apartment while your rent has been locked. So you get the sticker shock when your lease is up for renewal, or when you find out how much they’ve paid for the house next door.

When a neighborhood defeats a new condo development or delays it they’re thwarting some of those 40,000 people from finding a place to live. And so those 40,000 people may decide to pay even more for the housing that exists. And each time they do housing prices and tax valuations go up just a bit more. Multiplied by 40,000. Every year.

So What To Do

I highly recommend reading Dan Keshet’s musical chairs housing model. In a game of housing musical chairs people who have more money will always get housing. The only way to ensure there is enough housing for you, is ensuring that there are enough chairs.

By deciding to work within the system I’m not saying I like the system. I’m not saying the system is fair. I just want my friends to be able to afford to live in the city. I want my tax valuation to stay low enough so that I can continue to live in the city.

We need more chairs.

I was discussing Travis County Proposition 1 at lunch today with a co-worker whose house is worth about double what mine is. The proposition will increase Travis County taxes by 5 cents per 100 dollars of value. Now whether you think that’s a big tax increase may have a lot to do with how the county appraises your homes value. In my case it’s some money, but not big money. For people whose houses are worth twice as much as mine it’s a big deal.

But I think we’re arguing about the wrong thing. In Texas, the value of your house is a much bigger issue than your tax rate. We could cut the tax rate in half, but if my co-worker’s house doubles in value again in 5 years he still has the same exact problem. And if my house doubles in 5 years (which it easily could), I’ll start having my co-worker’s problem.

So the question about preserving affordable housing in Austin has jack to do with tax rates. It has to do with slowing real estate appreciation. No one wants that. But they also don’t want huge tax bills. So lets call it managing our real estate appreciation.

Ultimately we need more supply in Austin. Pretty much everyone would love to live in the central city, which is why the prices are so high. So we need to focus on building more housing in the central city. And, frankly everywhere.

Neighborhoods fight the city all the time on a number of issues. We tend to think about those issues as having no cost. But think about 10 people moving to Austin. A builder is planning on building a 100 unit housing complex in your neighborhood and there are 2 homes for sale. If the neighborhood allows the housing complex and its built in time all those people will be able to find a house without making the price of homes in your neighborhood rise. But if there is a fight and the new housing is delayed all 10 people will be competing for those 2 houses. And they’ll almost certainly pay more for the house raising the value of your house. Which raises the value of your tax bill.

Now I think there are reasonable reasons to fight development. But being reflexively anti-development is very, very bad for your tax bill. And the tax rate has little to do with it.