Creating Inclusive Corridors: Austin’s Airport Boulevard. by andres galindo

Introduction and Overview Austin faces many competing goals as it moves toward adoption of its new plan, Imagine Austin. The plan advances a vision for the city that tries to reconcile several conflicting impulses at once. On the one hand, it articulates a vision of a city made up of a set of “complete communities,” where residents can find a range of housing types and prices, access services and meet daily needs, and commute to work without travelling far. These goals build on recent city initiatives aimed at encouraging greater use of transit, through land use policies that will encourage development close to transit stops. Strategies include designation of “core transit corridors,” of “vertical mixed-use zones” along commercial corridors, and creation of plans for station areas along the city’s new commuter rail line. In recent years, the city’s housing department has also established goals, based on a comprehensive study of the local housing market. This study identified a shortage of 38,000 units of rental housing affordable to low-income residents and found the crisis most acute for the lowest income residents. It also found a shortage of homes priced below $240,000 and attributed this, in part, to a lack of condominiums and townhouses for sale. Yet at the same time, the plan, and the city’s efforts to move forward on housing goals, must grapple with the concerns of residents of existing communities about the effects of growth on their neighborhoods. These concerns are embodied in the 48 adopted neighborhood plans covering the central core of the city. The city’s strong coalition of neighborhood associations is pushing back against the plan, based on fears that growth that will threaten the character of their neighborhoods and may result in rising property values, yielding property taxes unaffordable to current residents. (See map 1: Neighborhood Planning Areas) Austin must develop strategies that will allow it to channel growth in ways that will support environmental and public health goals, while also respecting the culture and character of existing communities. It also means ensuring that existing residents are not priced out through explicit attention to preservation of existing affordable housing—both subsidized and unsubsidized. A premise for this project is the idea that existing central neighborhoods, particularly areas where new transit lines are likely to be introduced, are already home to many low-income households. Most of these low-income residents live in unsubsidized rental housing, whose rents are low due to the age and condition of the building, rather than to public subsidies. This makes them particularly susceptible to change as public investment increases the value of land along transit lines. We wondered, how might current planning efforts integrate existing apartments into plans, while ensuring that they remain affordable to current residents?

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Map 1: Neighborhood Planning Areas As the city began planning for the redesign of the upper Airport Boulevard corridor, we decided to focus our efforts on this area. While we were able to identify existing subsidized rental housing in the area, and

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to map the location of 6 large, class c apartment buildings, we suspected that many of the large number of renters in the corridor lived in smaller buildings that were of a scale consistent with existing neighborhood plans. Could these buildings help weave the planned changes along the boulevard with the desires of surrounding neighborhoods for modest streetscape changes, but little change in development scale? (See map 2: Rental Housing Stock in Airport Boulevard Study Area) Research questions: We organized our work around a set of questions and issues at different scales: What is the context for thinking about housing and corridors? How should we frame these efforts in order to think more holistically about the sustainability goals of these efforts? Who lives in the Airport Boulevard area now? What type of housing do they live in? What aspects of the neighborhood are especially valuable to them? What features are lacking? How do neighborhood plans relate to the ideas being presented in the current Airport Boulevard planning process? How can the tools of â&#x20AC;&#x153;form-based codeâ&#x20AC;? be used to highlight common goals? How can existing buildings be adapted, using these tools, to meet neighborhood and corridor goals? How financially feasible is it to rehabilitate existing small scale apartment buildings? How do the costs of rehab compare to the costs of new construction? How do the costs of subsidy, per unit, compare to citywide averages? What policies and funding strategies can the city adopt in order to retain existing affordable housing, and to address unmet needs in the corridor? Based on our research, we offer a set of organizing principles for corridor planning, as well as more detailed findings and recommendations outlined below and detailed in the body of the report. Principles: 1. Make affordability a central theme: Affordability should be an organizing frame for corridor planning and integrated into each phase of the planning and redevelopment process. 2. Take a holistic view of goals and geography: Successful corridor plans require a more holistic view of goals and a more flexible view of the geography of communities affected by corridor redevelopment. 3. Balance city goals and existing community needs: Strike a balance between citywide goals and neighborhood wants & needs, based on assessment of aspects of communities that are valuable or problematic for low-income residents.

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Map 2: Rental Housing Stock in Airport Boulevard Project Area

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4. Preserve what works: Adapt and upgrade housing that is already integrated into the community, using form based codes and small scale neighborhood improvements aligned with neighborhood plan goals. 5. Start early to achieve cost effective preservation: Identifying well-located aging rental housing early will result in low subsidy requirements per unit compared to new construction or rehabilitation of more recently upgraded properties. 6. Align policies, planning and resources: Use policy and planning processes, as well as administrative processes, to ensure that policy goals, public resources, and planning processes successful integrate these principles.

Findings: Thinking about corridors and the social context for redevelopment What is the context for thinking about housing and corridors? How should we frame these efforts in order to think more holistically about the sustainability goals of these efforts? The success of affordable housing in creating avenues for social inclusion, opportunities for growth, and stability for low-income families is dependent upon the vulnerabilities and opportunities associated with the surrounding neighborhood. Having a clear understanding of these risks and opportunities is an important consideration for the development and preservation of affordable housing. To understand neighborhood context, it makes sense to begin with existing forms of local organization and planning. Austin’s neighborhood planning areas can provide a starting point for such efforts—but extra efforts will be needed to ensure renters and other groups less frequently involved in planning efforts are involved. Corridor plans must be linked to these existing planning areas and plans. It makes sense to begin by planning for the most vulnerable areas. To illustrate how this might be done, we identified four “zones of housing opportunity,” by identifying areas with high concentrations of renters, whether in subsidized or aging (“class c”) apartments, where more than half of the population had annual incomes below half of regional median family income. Assessing these areas requires thinking about what defines the character and quality of life of neighborhoods, how these features relate to each other and how they fit into larger citywide systems. Seeing local areas as part of systems, and allowing for variation in planning purposes, implies a more flexible view of area boundaries and approach to assessing the needs of corridors and surrounding communities. Our assessment of East Riverside, North Lamar, Rosewood, and Airport Boulevard illustrated the variation in conditions and trends in each area. While all four zones currently house many low-income renters, the likelihood that such renters will be able to continue to live there, and the types of public investments required to stabilize or enhance their neighborhoods varies greatly. Such variations, based on growth pressures, past patterns of development and the quality and availability of public services, must be assessed and the unique vulnerabilities and opportunities present addressed through the planning process.

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A profile of the Airport Blvd Corridor Who lives in the Airport Boulevard area now? In what type of housing do they live? What aspects of the neighborhood are especially valuable to them? What features are lacking? We found a large population of low-income renters living in the area, many in the 152 older rental properties that we found within the two zip codes encompassing the project area. In addition to these modest sized properties (of under 50 units), we found 11 subsidized properties, and 6 large class c apartment properties (of 50 units or greater). Within the original project area, we found 4 subsidized properties and 4 large, class c apartment buildings. In addition, we found over 500 units in 27 small rental properties (<50 units). Based on our survey of these properties, we found that the average number of units per building was just under 20. Just over 60 percent (305 units) were efficiencies or 1 bedrooms, while over 27 percent had 2 or more bedrooms. Rents averaged $575 for a one bedroom and $709 for a two bedroom apartment ($0.86 and $0.75 per square foot, respectively). These rents are well below the official “fair market rents” HUD publishes based on market surveys and are affordable to households earning approximately 40 percent of median family income ($28,000 for a family of three in 2011). To understand who lives in these properties and how they are served by the existing community, we profiled sub-areas within the corridor. The large share of residents who rent in the northern end of the corridor (69% in 78752) lived primarily in single family homes—there were only nine multiunit buildings in the area. Close to 60 percent of residents are non-white, and about one-quarter of households have children. The local school was “recognized” in 2011 under the state accountability rating system, but access to jobs, markets and health care is limited, and parkland is inadequate. The Red Line’s Crestview station serves the area. The bulk of small scale rental properties (less than 50 units per building) were found in the southern end of the corridor. This area is served by Ridgetop Elementary school, a school rated “exemplary” in 2 of the past 3 years that is participating in the district’s new dual language program. Fifteen small scale rental properties were zoned for Ridgetop. About 114 units in the area were sized for families, with 2 or more bedrooms. The area also provides better access to supermarkets and health care facilities than does the northern zone. Yet like the northern zone, this area lacks parks and open space. In sum, we found that the corridor contains a large stock of currently affordable apartments, most in older, small scale buildings—some in need of repair. Residents, especially in the southern zone, have access to important social services and to an exemplary school that serves economically disadvantaged students well. Yet the entire corridor suffers from inadequate parkland, a lack of public spaces, and poor access to markets and other services. Neighborhood Plans, form-based code and affordable housing How do neighborhood plans relate to the ideas advanced in the current Airport Boulevard planning process? How can the tools of “form-based code” be used to highlight common goals? How can existing buildings be adapted, with these tools, to meet neighborhood and corridor goals?

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Residents have expressed their preferences for neighborhood improvements and for infill development through the neighborhood planning process. There are two adopted plans in the corridor area: the Northloop and Brentwood/Highland Combined Neighborhood Plans. Our review of these plans found many goals that can be addressed using the tools available through “form-based codes.” These include design guidelines adopted for single family, multifamily and commercial areas for setbacks, street trees, parking, lighting, front access to buildings, building scale and width and ways that new buildings reference the existing architectural character of the neighborhood. In addition, local plans described areas in terms that can be adapted to categories used in “smart codes”, upon which form based codes typically draw. To explore how existing rental housing might be upgraded or adapted to fit plan guidelines, using form based code, we selected three different types of buildings and streetscapes and developed urban design strategies for them. All three were in areas labeled “neighborhood transition” zones in the current planning process, where strategies are needed to mesh the lower density residential areas with the higher densities planned for Airport Boulevard. Through exploration of three contrasting examples, the team demonstrated how two existing structures (one 18 units, one 127 units) could be integrated into the new corridor and used to bridge the intensity of development likely along Airport Boulevard and the lower density of surrounding residential neighborhoods. In addition, design strategies were presented for a site where rental housing could be included in a new, mixed use building. Strategies focused on compatibility with neighborhood design guidelines, and on making parking less obtrusive, thus allowing for a more pleasant pedestrian experience while retaining the character of the existing community. Such goals were attainable through minor renovations focused on sidewalks, landscaping and lighting, along with reconfiguration of parking areas and improved façade design. Such low cost strategies would allow for preservation of existing buildings that are already compatible with the scale of the existing neighborhood, while improving pedestrian connections between residential and commercial areas. Financing rental housing rehab and ongoing affordability How financially feasible is it to rehabilitate existing small scale apartment buildings? How do the costs of rehab compare to the costs of new construction? How do the costs of subsidy, per unit, compare to citywide averages? We next considered the economics of preserving existing properties in order to determine whether preservation would be a good use of public funds. We focused explicitly on when preserving existing properties would be more cost effective than construction of new buildings in the same location. We attempted to estimate two related ratios: first, the cost per unit to finance rehabilitation vs. construction and, second, the subsidy per unit (again, for rehabilitation vs. construction) that would be required to ensure rents remained affordable to current residents. Based on discussions with three local affordable housing finance experts with extensive practical experience, the team developed estimates of construction costs for rehabilitation and new construction, and for operating properties while imposing rent restrictions targeted to area residents. We then developed

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financing approaches for both types of projects, under varied assumptions about the value or cost of the properties. The goal in both cases was to create or preserve housing affordable to current residents (based on current neighborhood characteristics). (The methodology likely underestimates the cost of new construction for existing properties since it does not include the cost of acquiring and demolishing existing structures.) We analyzed two properties using this methodology: one older property, built in 1958, containing 18 onebedroom units, with an average rent of $575, and one larger (127 unit) property built in 1964 and recently upgraded with a mix of unit sizes and with 1 bedroom rents closer to $800. (These properties were the focus of the design improvements sited above). In both cases, despite our exclusion of some costs from the new construction scenario, we found that rehabilitation of existing properties was more cost effective per unit. The cost savings were most dramatic for the smaller property, due to its lower value, as reflected in its lower current rents. This made it possible to buy and remodel the property for a very low cost per unit. In addition, we found that the smaller property required substantially less subsidy per unit than did the larger property, whether for rehabilitation or new construction. While rehabilitation can be more complicated than constructing a new building, there are substantial benefits to the public of facilitating rehabilitation. It is an effective use of scarce public funds, it retains neighborhood scale and can enhance neighborhood character, and it allows preservation of existing affordable housing, at rents comparable to those currently offered. Policy options for moving forward What policies and funding strategies can the city adopt in order to retain existing affordable housing, and to address unmet needs in the corridor? How might the City of Austin support the creation of inclusive corridors through creative local policies? Rents in Austin, as in many other growing metropolitan areas around the country, are climbing making the task of preserving or creating an adequate supply of affordable rental housing all the more daunting. Evidence suggests that such increases in housing costs are likely to be considerable in neighborhoods surrounding new transit lines. Yet ensuring that low-income residents, who are much more likely to be transit reliant, have ongoing access to housing in these neighborhoods is critical for the households themselves and for the city as a whole. Airport Boulevard area residents are much more likely to commute by public transit than are city residents overall (9.4 to 14.5% of area households vs. 4.8% citywide in 2010). Identifying new resources for preservation of affordability is particularly important at this moment, since federal funds for affordable housing have fallen dramatically in the last few years: CDBG funding has fallen approximately $1.5 million (or 18.3%) since 2006, to $6.7million, while HOME funding has fallen approximately $3.2 million (or 57.1%), to $2.4 million. In addition, no funds have been appropriated to the cityâ&#x20AC;&#x2122;s HTF since FY 2007-08 and the 2006 general obligation bond funds for housing are now entirely obligated.

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Based on research on approaches taken to preserving affordable housing near transit lines in other cities, we developed several “big ticket” recommendations, along with a longer list of more modest policy proposals. Big ticket options include: 1) TOD Fund: creation of TOD fund for acquisition of existing properties or land, within neighborhoods targeted for transit and in accordance with neighborhood plans, using proceeds from the next GO bond; 2) Incentives for preservation: use of existing federal loan programs for substantial rehabilitation and new construction of MF rental housing, incorporating affordability standards and control periods similar to LIHTC restrictions, along with adoption of notification requirements for assisted housing; 3) TIF funds dedicated to affordable housing: use of TIFs to implement ideas presented for Airport Blvd have been demonstrated in Dallas, where at least 20% of housing developed in TIF zones must be affordable, and the fee in lieu rises as the gap between affordable and proposed rents rises. Funds have also been used to match federal grants for land acquisition and were also dedicated to streetscape improvement and parkland acquisition and public space design. In Chicago, TIFs fund home repair grants and MF housing rehab with affordability conditions attached. Consistent with preservation goals, TIF boards should include community and housing stakeholders; 4) Designate a Homestead Preservation District for Airport Boulevard: The area meets the criteria for a zone. TIF funds would be used to preserve and create affordable housing for the area and would have more specific income targets attached. Housing preserved would be required to remain affordable for at least 30 years. “Small ticket” policy options include 1) weatherization and energy efficiency programs, 2) transit cost relief, and 3) low cost community planning improvements, such as streetscape improvements and resuse of underutilized parking lots. Austin Energy funds (from federal Weatherization Assistance Program funds) targeted to low-income homeowners to encourage energy efficiency upgrades can be matched with SMART Housing incentives; transit passes can be offered to low-income residents by apartment owners, resulting in lower demand for parking. Use of design tools as part of planning can enable addition or preservation of affordable units in a more cost effective manner, while respecting neighborhood concerns about the scale and character of development. They can also identify sites for purchase and use as parks, open space or green alleys. Such projects can be funded through more strategic partnership between public and private stakeholders, and by combining funds from different levels of government. Finally, in support of these goals and to raise the profile of affordability in the corridor planning process, we recommend that the Airport Boulevard Initiative add to its vision of the future corridor the goal of “equitable and sustainable affordability for residents.”

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Contents

Introduction and Overview Chapter 1: Thinking about Corridors and the Context for Redevelopment Chapter 2: A Profile of the Airport Boulevard Corridor Chapter 3: Neighborhood Plans, Form-Based Code and Affordable Housing Chapter 4: Financing Rental Housing Rehab and Ongoing Affordability Appendix 4-2: 5122 Eilers Appendix 4-2: 1020 E. 45th St. Chapter 5: Policy Options for Moving Forward

Chapter 1: Thinking about Corridors and the Context for Redevelopment “Cities have the capacity of providing something for everybody, only because, and only when, they are created by everybody.” —Jane Jacobs

Introduction The primary questions we sought to address are:   

What is the role of existing social and physical contexts in urban development projects? How might existing affordable housing units in Austin serve as a starting point for reframing how urban development projects are conceived, designed, and implemented? How can development mitigate conditions, such as transit oriented development, that can be simultaneously considered an opportunity and vulnerability?

Development, “an event constituting a new stage in a changing situation” or “the process of converting land to a new purpose by constructing buildings or making use of its resources”1 is often perceived as a means through which some sort of technological improvement will yield improved social and physical conditions. Technology is seen as an exogenous force applied to cities with the expectation of change. Alternatively, Hommels suggests that the city is a “seamless web of material and social elements” (Hommels 2005: 15), and argues that the confrontation between existing and new elements within development processes allows us to approach the city as a series of social and material interactions that might be analyzed and measured. “…one of the theoretical implications of viewing the city as a technological artifact is that it becomes possible and productive to analyze it with the same conceptual tools that are applied to other technologies, such as bicycles, transport systems, or refrigerators. Focusing on obduracy enables a new and different way of looking at urban form and process.” Obduracy, for Hommels, is resistance. Following Hommels, development offers the opportunity, then, to understand the extent to which existing social or physical elements resist or mitigate the balance between vulnerability and opportunity. Defined as “exposed to the possibility of being attacked or harmed, either physically or emotionally,”2 on one hand vulnerability can be used to describe existing communities that are subject to development. On the other hand, if development is literally interpreted as something that “makes use of its (land) resources,” then it is reasonable to consider a seemingly vulnerable situation in terms of opportunity. Following Hommels, the City Wide Mapping group approached the project from the perspective that development can be a platform or process of interrogating the vulnerabilities and opportunities found in the city as it exists today, and that a more sustainable city or improved urban “outcome” derive from the positive and negative aspects of existing conditions. Beginning with the normative position that the existing affordable housing, neighborhood plans, and communities are valuable, we generated a series of zones of housing opportunity that are political and spatial boundaries in which development that favors existing social and physical conditions is prioritized over other conventional development goals.

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Affordable Housing in Austin The inability to find adequate, safe and affordable housing is an issue that affects millions of renter and homeowner households all over the country.3 According to the federal government, housing is â&#x20AC;&#x153;affordableâ&#x20AC;? if a household spends no more than 30% of their income on rent, mortgage payments, and utilities. If families are paying more than this, they may have trouble affording other necessities, such as food and medical care. Housing programs and policies divide different categories of low-income housing based on their relationship to the area median family income (MFI). Moderate income families make 80% of MFI, very low-income families make 50% or less of the area MFI, and extremely low-income families make 30% or less of the MFI. From 1970-1990, a HUD study found Austin to be one of the most affordable housing markets in the country. However, over the past few decades, Austin has experienced large population growth and is quickly becoming less affordable. In 2011, the MFI for Austin, Texas was $74,900.4 The median home price is $180,000 and the average rent is $831 in Austin. Both of these numbers are not affordable for low-income families. 5 Using American Community Survey data, the Community Action Network found that 149,594 Travis County households (38%) spent more than 30% of their income on housing. Additionally, 66,527 (17%) Travis County families paid more than 50% of their income on housing. The majority of the City of Austin Department of Neighborhood Housing and Community Development affordable housing programs target moderate-income persons, and a few target low-income and very-low-income individuals and families.6 Figure 1 displays the spatial distribution of subsidized affordable housing units in Austin. Financial assistance for these properties was provided by several different agencies, including the Austin Affordable Housing Corporation, the Austin Housing Finance Corporation, the Housing Authority of the City of Austin, the Housing Authority of Travis County, The Texas Department of Housing and Community Affairs, and the Department of Housing and Urban Development. The homes are concentrated in both the north and the south of Austin, and can exist as one single unit, or a large apartment that contains hundreds of affordable units. The units exist on both sides of IH-35, but generally do not exist on the west side of the city. Transit-Oriented Development and Affordable Housing in Austin, Texas As a rapidly growing city, and with population projections expected to double within the next thirty years, Austin faces many challenges in the coming years with regard to infrastructure, sustainability, and affordability, while trying to also maintain the culture and character unique to the burgeoning city.7 Similar to many cities around the United States, officials in Austin are turning to Transit Oriented Development (TOD) to address many of the challenges facing the city. TOD creates opportunities for the city to develop solutions centered on density, mixed-use development, walkability, and avenues for greater mobility along transit-rich corridors.8 While these are all essential to creating a sustainable infrastructure here in Austin, there are social implications for the use of TOD along with concerns that housing stock, particularly units affordable to low-income families; will become inaccessible to many families due to a lack of affordability. Higher land and housing values are generally associated with TOD. Research conducted by the U.S. Government Accountability Office indicates that increases in land and housing values raise Context - 2

market rates for housing units, making the available housing stock unaffordable for low-income families. 9 TOD also has the potential to negatively impact subsidized housing units in and around transit corridors. Reconnecting America and the National Housing Trust reported in 2007 that one-third of the subsidized units available in the cities surveyed were located in transit corridors. The study also found that contracts for federal subsidies for 63% of the units located near transit were expected to expire by 2012, suggesting that few incentives currently exist for developers to maintain affordability, as increases in land and housing values allow developers to target households with higher incomes that do not require subsidies to access the available housing stock. 10 In using TOD to address issues with infrastructure and sustainability, Austin faces many of the same challenges in trying to maintain affordability. Although the median family income (MFI) for Austin from 2006 to 2010 was higher than the MFI for the state, close to 21% of the cityâ&#x20AC;&#x2122;s population is living below the federal poverty guidelines established by the U.S. Department of Health and Human Services.11,12 A significant percentage of the cityâ&#x20AC;&#x2122;s population is also contributing more than 30% of their monthly income towards housing. According to the City of Austin, there are more than 22,000 subsidized housing units in Austin, many of which are located in close proximity to areas targeted for development.13 Although current plans for development hope to ensure equity and promote opportunities for various types of housing, threats to affordability remain significant concerns for communities across the city.

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Figure 1: Affordable Housing Stock of Austin

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City-wide Vulnerabilities and Opportunities There are many factors that impact the residents of any city. Maps of demographics and city characteristics, based on census 2010 data, will be shown below so that the features of Austin can be better understood. First, the map below shows the percent of the population that is black in 2010. This shows that the black population is concentrated on the east side of the city, specifically in the center and the northeast. There are only a few census tracts to the west of IH35 that are more than 5% black. There is a large population of Hispanics in Austin, and there are many census tracts that are more than 45% Hispanic. Most of the Hispanic population is concentrated east of IH-35 as well as in the north-center and south-center. Context - 4

2010 HISPANIC POPULATION Figure 3: Percent of Population that is Black, 2010

Figure 2: Percent of Population that is Hispanic, 2010

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Economic opportunity is represented in Figure 4, and displays all the employers in Austin that employ over 500 people. Most of the jobs are concentrated towards the center of the city, which is good for all residents, because this means they are more easily accessible by public transportation. Three of the four largest employers are in the center city, including the University of Texas, the City of Austin and the State of Texas. The other employer of more than 10,000 people is Dell, which is located to the north outside of the city limits in Round Rock. Many jobs are also located along IH-35. There are clusters of jobs in the northwest in the Cedar Park neighborhood, and in the south. Overall, it seems that there are many employers that are easily accessible, but there are some that would be very difficult to reach without a car. Figure 4: Economic Opportunity15

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The figure below shows educational opportunity in Austin, based on the 2011 Public School Accountability Rating each school received by the Texas Education Agency. Exemplary is the highest rating, followed by Recognized, Academically Acceptable and Academically Unacceptable. The bottom three rankings seem evenly distributed throughout the city, but all but one of the schools that received an Exemplary rating are west of IH-35. This shows that the educational opportunity is highest for children who live west of IH-35. Figure 5: Educational Opportunity16 ! !! !

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The health opportunity map shows Austin’s public health centers and hospitals. Most of the health centers are to the east of IH-35 and most of the hospitals are to the west. They are evenly distributed throughout Context - 7

the north and south, but it appears that more health centers and hospitals should exist to accommodate the eastern population of Austin. 17 Figure 6: Health Opportunity "

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There are many amenities open to the public that can provide cultural and academic resources or serve as a place to congregate or provide safe haven. It is important that all people have access to these types of facilities because of the value they bring. Public amenities, including colleges, libraries, museums, recreation centers, nursing homes, post offices, and parks are mapped below. Overall, these amenities are concentrated near the center city. The colleges tend to be located Context - 8

centrally, but there are many on both the east and west side, and some at farther out locations in the city. Many recreation centers and libraries are on both the east and west side, which is a positive sign for the well being of children. More nursing homes seem to exist west of IH-35. Small parks exist throughout the city, and the larger ones are on the borders of the city and around Lady Bird Lake. Figure 7: Public Amenities PUBLIC AMENITIES

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College Library Museum Rec Center Nursing Home Post Office Park

Methodology Ecological Systems Theory and Community Capacity Place is an important predictor of individual identity and behavior, suggesting that the purpose of affordable housing goes beyond the physical boundaries of a single building.19 The success of Context - 9

affordable housing in creating avenues for social inclusion, opportunities for growth, and stability for low-income families is dependent upon the risks and opportunities associated with the surrounding neighborhood.20 Having a clear understanding of the risks and opportunities present within a community is an important consideration for the development and preservation of affordable housing. In wanting to further evaluate the relationship between vulnerabilities and opportunities that exist within different communities, Ecological Systems Theory was used to evaluate the nature of the relationship between identified vulnerabilities and opportunities with regard to affordable housing. Ecological Systems Theory focuses primarily on the relationship between individuals and their environment, suggesting that both are interactive systems.21Although Ecological Systems Theory has traditionally been used to evaluate the systems in which individuals and groups navigate, this perspective also serves as a useful tool for assessing larger systems and their capacity for sustainable change. Identifying vulnerabilities and opportunities that exist within a given community is necessary to evaluate community capacity. Robert Chaskin defines community capacity as “the interaction of human capital, organizational forces, and social capital existing within a given community that can be leveraged to solve collective problems and improve or maintain the well-being of a given community.” Chaskin suggests that successful change efforts are community based as they rely upon opportunities that exist within the community in its current state. 22 Communities often have varying degrees of capacity, requiring that change efforts be a product of collaboration from within communities. Alternatives for Affordable Housing Although current development plans for TOD in Austin maintain that ensuring affordability for all of the city’s residents remains a priority, efforts to preserve the existing housing stock in Austin may require a different approach. Since the vulnerabilities and opportunities attached to affordable housing are best evaluated within the context of community, using established social zones within the city may prove to be a much more viable alternative for the preservation and creation of affordable housing. In 2007, the City of Austin allowed citizens to begin taking an active role in the development and preservation of their neighborhoods by developing neighborhood-planning areas. To date, there are 29 neighborhood plans that have been approved by the City of Austin, and a total of 48 identified neighborhood-planning areas.23Scaling down efforts to maintain affordability from large transit-corridors, which are often comprised of many different communities, to neighborhood planning areas simplifies the process of assessing community capacity. Zones of Housing Opportunity Zones of Housing Opportunity are zoning overlays that allow land to be valued and used on a case-by-case basis as determined by subcategories that prioritize concerns that change on a caseby-case basis. ZHO can be used to place the upgrade of existing affordable housing and the production of new affordable housing as the primary goal of development. Zones of Housing Interest are derived from ZEIS – Zones of Special Social Interest, a planning tool developed in Brazil as part of the Statute of the City to address the relationship between informal settlements Context - 10

and housing development projects. While the context of Brazil and Austin are obviously different, Brazil can be considered light years ahead of Austin for establishing a zoning overlay that prioritizes affordable housing for those at varying levels of need. The general boundaries of the ZHO are based on neighborhood plans developed by individual communities. The boundaries favor 1) existing affordable housing and 2) areas that need affordable housing. The boundaries can then be refined and negotiated by actors with a vested interest in particular housing development projects: residents, community members, developers, city officials, planners, and architects as needs and conditions change over time. The project, then, becomes a platform through which the diverse needs and resources of a particular place are integrated. The boundaries can also undergo modification depending on vulnerabilities and opportunities. For the purpose of this project, fours ZHO were identified in Austin. Each ZHO coincides with an existing neighborhood planning areas. Since affordability remains a concern for many communities, the ZHO were chosen based upon the following criteria 1) higher rate of renter occupied units than owner occupied, 2) more than 50% of the population has an annual income less than $50,000 and, 3) subsidized housing units exist within the community.24,25The following maps identify amenities within each community that can be leveraged to enhance community capacity and create opportunities for the development and preservation of affordable housing.

Context - 11

Figure 8: Zones of Housing Opportunity

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Analysis A characteristic of a zone that could be considered a vulnerability or an opportunity to the affordable housing stock is population growth, depending on how it is managed by the government and citizens. So it is important to look at where population is expected to grow in the city. An increased amount of population could drive property values up, which will make class C apartments harder to find and make it more expensive to subsidize units. If the influx of population is low-income, this will strain the need for affordable units, so there will be greater competition to rent or buy an affordable home. Population growth could be an opportunity for citizens if it results in increased employment opportunities or increased services provided by the city. On the other hand, if the new growth is not met with the necessary services to accommodate it, this presents another vulnerability for the population. The Capital Area Metropolitan Planning Context - 12

Organization (CAMPO) provided population estimates until the year 2035. The map below displays the expected increase in persons per census tracts from 2010-2035. Considering the zones, Rosewood and N. Lamar are not expected to grow by more than 500 people. However, the Airport and E. Riverside zone are both expected to receive over a thousand more people. E. Riverside has a tract that CAMPO projects will increase by 5,000 – 10,000 people. 26

Figure 9: Projected Population Growth, 2010-2035 POPULATION GROWTH, 2010 - 2035

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Context - 13

East Riverside (East Riverside/Oltorf Combined Planning Area) The opportunities of the East Riverside Zone are presented below. Subsidized affordable housing units, represented by black crosses, are clustered in the zone. There are many easily accessible bus stops and bus routes near these units. Fewer transit options exist to the south of the zone near Ben White Blvd, but it still seems to be a relatively transit rich neighborhood. The neighborhood is close to downtown, which means it is% in close proximity to many jobs. Within the zone, there are a few employers of 500 or more people near the %south of the region. These include the IRS and Sematech Inc. A few schools exist in this zone, but they are all rated only academically acceptable. On the right border of the zone, ACC Riverside " !! "assets. and There is an ample amount of green space near Lady Bird! ! ! ! !!! Ruiz Branch library are important ! !! ! ! !! ! % ! !! !! ! %Lake #!! ! # ! the southwest and a few other parks in area there are no!health facilities in ! !! !! !!of the zone. However, ! ! !! !! % ! ! $ this area or some public amenities, such as nursing homes or recreation centers. ! ! ! ! ! ! !!

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Next, the future land G use map of the East Riverside /and Oltorf Neighborhood will be analyzed to ! !! determine how it might affect affordable housing in the zone. The area that has the potential to ! ! ! change the most is along the south side of Riverside Drive and along Lady Bird Lake. ! ! Additionally the white and grey etched areas are designated as withdrawn for possible future $ core transit corridor designation and withdrawn for future consideration respectively. Thus, it is

Context - 14

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not apparent what will happen to this area, but it could be subject to change. New mixed-use development could bring in new job opportunities or services for residents, but it could also greatly raise property values. Many of the subsidized units are along E. Riverside Drive, which is where mixed-use development is expected to occur. The potential rise in property values is a major vulnerability for this area. Additionally, the eastern area of the zone is designated as multifamily. This could serve as an opportunity for subsidized and class c units, but it cannot be determined how this are will be impacted by changes made in the northwest area of the zone. Figure 11: East Riverside / Oltorf Combined Neighborhood Plan27

Rosewood Zone (Central East Austin Neighborhood Planning Area) The Rosewood zone has subsidized affordable housing clustered in the south of the zone. There are a few bus routes and several stops along major roads. Additionally, the Plaza Saltillo stop of the MetroRail runs right below the zone. The region contains a few parks, one recognized school and two academically acceptable schools. Huston-Tillotson University is an important asset, along with George Washington Carver Library and Museum. There are not any employers of over 500 people, health facilities, recreation centers, or nursing homes in this zone.

Context - 15

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Context - 16

Figure 13: Central East Austin Future Land Use Plan

Overall, due to low projected population growth and no huge changes on the neighborhood planning area, the Rosewood Zone does not seem extremely vulnerable to rising property values, so subsidized units as well as class C apartments are not in danger. The area is close to downtown, has transit options, and has a few important assets such as Huston-Tillotson University. However, the area could use a few more services, jobs centers, and amenities. Context - 17

North Lamar Zone (North Lamar Combined Neighborhood Planning Area) %

The North Lamar Zone has the fewest opportunities relative to the other zones. It is farther from downtown, has a small amount of green space, and no health facilities or public amenities. There are two schools; one rated “recognized” and one rated “academically acceptable” in 2011. The affordable units are clustered towards the south and are near a few bus routes, but not much else. !

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ContextG- 18

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supply stores, and other types of retail that is not oriented to residents. New mixed-use developments may create a safer area with more amenities for the residents. Figure 15: North Lamar Future Land Use29

Due to the lack of population growth or major changes in the future land use map, it does not appear that the North Lamar zone will be subject to great increases in property values. Additionally, it appears that future mixed use development, retail, and multifamily units will be a positive addition for residents, because the current stores are not attractive to many people, and thus do not promote safety and walkability. Context - 19

Airport Blvd Zone (North Loop Combined Planning Area) G

The Airport Blvd Corridor and potential changes will be studied in depth in the following section G of this project. However, the current opportunities will be briefly G presented, followed by how they compare and related to the other zones. This zone is very transit rich, as shown by the many bus stops and the MetroRail running along side of it. This the future site of an ACC campus. There is one health center in the south of the region and a few employment centers. No schools exist within the boundaries, % but a few exist right outside. Additionally, the Airport Blvd area is projected to grow, as shown the population growth map above. Because of the transit assets and projected growth, property values could increase, endangering subsidized affordable units and # " $ class c apartments. # # ! !

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Context - 20

Conclusion and Recommendations

The four zones presented above are all very different. The areas that are subject to the most change, and hence rising property values, are East Riverside and Airport Blvd. Rosewood and North Lamar do not appear to face this vulnerability, so plans to increase development in the area could represent a positive change in terms of jobs, amenities, and safety. What can be learned from looking at all these areas is that the affordable housing units around the city face different challenges and have differing amounts of services and opportunities. This means that approaches to maintain affordability should be tailored to each region, depending on projected growth and change. Additionally, any new developments and population growth should also attempt to improve services, jobs, and amenities for those that do live in affordable units. Given our findings and conclusions, the City Wide Mapping Group recommends that East Riverside and Airport Boulevard be prioritized for Zones of Housing Interest. The Airport Zone could be expanded to include the adjacent affordable housing units, schools, and the park to the northwest, resulting in a hybrid zone that builds off the neighborhood plan. The Riverside Zone could also be expanded to include adjacent affordable housing and the green space around Lady Bird Lake.

Ibid. Oxford English Dictionary 3 “Affordable Housing.” (2012.) U.S. Department of Housing and Urban Development. Accessed March 17, 2012. Retrieved from: http://www.hud.gov/offices/cpd/affordablehousing/ 4 Giello, Rebecca. (August 2011.) “City of Austin Neighborhood Housing and Community Development: Presentation to the Community Council.” Accessed March 10, 2012. Retrieved from: 2

http://www.caction.org/councils/Community_Council/Presentations/Aug2011_NHCDHousingPresentation.pdf 5

City of Austin Neighborhood Planning and Zoning Department. “Martin Luther King (MLK) Boulevard TOD Station Area Plan.” Retrieved from: http://www.austintexas.gov/edims/document.cfm?id=126526 6 Giello, Rebecca. (August 2011.) “City of Austin Neighborhood Housing and Community Development: Presentation to the Community Council.” Accessed March 10, 2012. Retrieved from:

http://www.caction.org/councils/Community_Council/Presentations/Aug2011_NHCDHousingPresentation.pdf 7

“Experiencing Austin: Who We Are Today.” In Imagine Austin Comprehensive Plan, 23-28. Accessed May 6, 2012. http:// ftp://ftp.ci.austin.tx.us/GIS-Data/planning/compplan/iacp_PCDraft_2012-4-20.pdf. 8 National Housing Trust, and Reconnecting America. Preserving Opportunity: Saving Affordable Homes Near Transit, 1. Accessed May 2, 2012. http://www.reconnectingamerica.org/resource-center/books-and-reports/2008/preservingopportunities-saving-affordable-homes-near-transit/. 9 U.S.Government Accountability Office. :Affordable Housing in Transit-Oriented Development: Key Practices Could Enhance Recent Collaboration Efforts between DOT-FTA and HUD. GAO Highlights. Accessed May 4, 2012. http://www.gao.gov/new.items/d09871.pdf. 10 National Housing Trust, and Reconnecting America. Preserving Opportunity: Saving Affordable Homes Near Transit, 1. Accessed May 2, 2012. http://www.reconnectingamerica.org/resource-center/books-and-reports/2008/preservingopportunities-saving-affordable-homes-near-transit/. 11 "Austin (City) Quickfacts," U.S. Census Bureau, accessed March 2012, last modified 2011, http://quickfacts.census.gov/qfd/states/48/4805000.html. 12 “Experiencing Austin: Who We Are Today.” In Imagine Austin Comprehensive Plan, 23-28. Accessed May 6, 2012. http:// ftp://ftp.ci.austin.tx.us/GIS-Data/planning/compplan/iacp_PCDraft_2012-4-20.pdf. 13 "Affordable Housing Volume," data.austintexas.gov, accessed May 2, 2012, last modified 2011, https://data.austintexas.gov/Neighborhood/ Affordable-Housing-Volume/gqmc-bxs4.

Context - 21

Affordable Housing Inventory. (2012). City of Austin. Accessed April 5, 2012: https://data.austintexas.gov/Neighborhood/Affordable-Housing-Volume/gqmc-bxs4 15 Austin Chamber. Major Employers.” Accessed March 15, 2012: http://www.austinchamber.com/austin/work/employers.php 16 Texas Education Agency. (2011). “2011 Accountability System District and School Accountability Ratings.” Accessed April 12, 2012: http://ritter.tea.state.tx.us/perfreport/account/2011/statelist.html 17 Points of Interest. [Computer File]. 2008. Austin, TX: City of Austin. Available FTP: ftp://ftp.ci.austin.tx.us/GISData/Regional/coa_gis.html. [Sept. 27, 2011]. 18 Points of Interest. [Computer File]. 2008. Austin, TX: City of Austin. Available FTP: ftp://ftp.ci.austin.tx.us/GISData/Regional/coa_gis.html. [Sept. 27, 2011]. 19 Ruston, Annmarie. “Isolation: A Threat and Means of Spatial Control. Living With Risk in a Deprived Neighborhood.” Health, Risk & Society 11, no. 3 (June 2009): 257-268. Accessed May 3, 2012. JSTOR. 20 Denton, Nancy A. “Segregation and Discrimination in Housing.” In A Right to Housing, 61-81. Philadelphia: Temple University Press, 2006. 21 Roberts, Albert R. Social Workers’ Desk Reference. New York: Oxford University Press, 2009. 22

Chaskin, R. J. (2001). Building community capacity: a definitional framework and case studies from a comprehensive community initiative. Urban Affairs Review, 36(3), 291-323. 23 “Neighborhood Planning.” Austintexas.gov: The Official City of Austin Website. Accessed May 7, 2012. http://www.austintexas.gov/department/neighborhood-planning. 24 "U.S. Census Bureau," American Fact Finder, accessed April 9, 2012, http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. 25 "Tax Year 2008 ZIP Code Data," IRS , accessed March 2, 2012, http://www.irs.gov/taxstats/article/0,,id=254177,00.html . 26 2005 to 2035 Demographics. [Computer File]. 2011. Austin, TX: CAMPO. Available: http://www.campotexas.org/programs_gis.php 27 City of Austin Neighborhood Planning and Zoning Department. (2011). “East Riverside/Oltorf Combine Neighborhood Plan.” Accessed April 10, 2012: ftp://ftp.ci.austin.tx.us/npzd/Austingo/eroc_flum.pdf 28 City of Austin Neighborhood Planning and Zoning Department. (2011.) “Central East Austin Neighborhood Planning Areas.” Accessed April 12, 2012:

ftp://ftp.ci.austin.tx.us/npzd/website/Zoning_Archive_01102010/zoning/central_east_austin.htm 29

City of Austin Neighborhood Planning and Zoning Department. (2010). “North Lamar Combine Neighborhood Planning Area.” Accessed April 12, 2012: ftp://ftp.ci.austin.tx.us/npzd/Austingo/nlamar_combined_flum.pdf

Chapter 1: Base GIS Files 2008 Land Use [Computer File]. 2004. Austin, TX: City of Austin. Available FTP: http://www.ci.austin.tx.us/landuse/gis.htm. [October 20, 2011]. City Limits [Computer File]. 2011. Austin, TX: CAPCOG. Available: http://www.capcog.org/informationclearinghouse/geospatial-data. [Oct. 27, 2011]. Lakes and Ponds [Computer File]. 2004. Austin, TX: City of Austin. Available FTP: ftp://ftp.ci.austin.tx.us/GISData/Regional/coa_gis.html. [Sept. 27, 2011]. Street Centerlines [Computer File]. 2011. Austin, TX: City of Austin. Available FTP: ftp://ftp.ci.austin.tx.us/GISData/Regional/coa_gis.html. [Oct. 27, 2011].

Chapter 1: References "Affordable Housing Volume." data.austintexas.gov. Accessed May 2, 2012. Last modified 2011. https://data.austintexas.gov/Neighborhood/ Affordable-Housing-Volume/gqmc-bxs4

Context - 22

"Austin (City) Quickfacts." U.S. Census Bureau. Accessed March 2012. Last modified 2011. http://quickfacts.census.gov/qfd/states/48/4805000.html. .Chaskin, R. J. (2001). Building community capacity: a definitional framework and case studies from a comprehensive community initiative. Urban Affairs Review, 36(3), 291-323. Denton, Nancy A. “Segregation and Discrimination in Housing.” In A Right to Housing, 61-81. Philadelphia: Temple University Press, 2006. “Experiencing Austin: Who We Are Today.” In Imagine Austin Comprehensive Plan, 23-28. Accessed May 6, 2012. http:// ftp://ftp.ci.austin.tx.us/GIS-Data/planning/compplan/iacp_PCDraft_2012-4-20.pdf

Fogharty, Nadine, Nancy Eaton, Dena Belzer, and Gloria Ohland. Capturing the Value of Transit. Capturing The Value of Transit. Accessed May 5, 2012. http://www.reconnectingamerica.org/assets/Uploads/ctodvalcapture110508v2.pdf

Hommels, Anique. 2005. Unbuilding Cities: Obduracy in Urban Sociotechnical Change. Cambridge: MIT Press. “Mobility Corridors Development Plan.” Austin Strategic Mobility Plan . Accessed May 4, 2012. Last modified April 9, 2012. http://www.austinstrategicmobility.com/news/ . National Housing Trust, and Reconnecting America. Preserving Opportunity: Saving Affordable Homes Near Transit, 1. Accessed May 2, 2012. http://www.reconnectingamerica.org/resource-center/books-and-reports/2008/preservingopportunities-saving-affordable-homes-near-transit/ “Neighborhood Planning .” Austintexas.gov: The Official City of Austin Website. Accessed May 7, 2012. http://www.austintexas.gov/department/neighborhood-planning Roberts, Albert R. Social Workers’ Desk Reference. New York: Oxford University Press, 2009. Ruston, Annmarie. “Isolation: A Threat and Means of Spatial Control. Living With Risk in a Deprived Neighborhood.” Health, Risk & Society 11, no. 3 (June 2009): 257-268. Accessed May 3, 2012. JSTOR.

"Tax Year 2008 ZIP Code Data," IRS , accessed March 2, 2012, http://www.irs.gov/taxstats/article/0,,id=254177,00.html "U.S. Census Bureau," American Fact Finder, accessed April 9, 2012, http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml U.S.Government Accountability Office. :Affordable Housing in Transit-Oriented Development: Key Practices Could Enhance Recent Collaboration Efforts between DOT-FTA and HUD. GAO Highlights. Accessed May 4, 2012. http://www.gao.gov/new.items/d09871.pdf

Context - 23

Chapter 2: A Profile of the Airport Boulevard Corridor As part of the comprehensive study of the Upper Airport Boulevard Redevelopment, this section focused on developing a profile of the existing housing stock, specifically multifamily rental units available in the area. In an effort to develop a comprehensive housing stock profile of the area, three primary questions were asked: ď&#x201A;ˇ ď&#x201A;ˇ ď&#x201A;ˇ

Who Lives here? Where do they live? What amenities are accessible to them?

Guided by issues of affordability, one of the main goals of the study was to investigate an initial hypothesis that the area has a large affordable rental housing stock. This theory was proven correct not only revealing the low rental rates but the diversity of housing stock available shed light to need in remodeling and maintaining many of the properties to ensure that they can remain as an affordable amenity to renters for many more years. This report presents a summary of the results for housing stock survey for the entirety of the study area. Additionally, the study breaks down the results into two sections, north and south, that showed a clear clustering of multifamily properties to account for potential differences in the zones.

Airport Boulevard Profile - 1

Project Area Boundaries The project survey was begun with a limited data base of existing rental housing stock on the study area. Initial information were two sets of listings: Larger Class C apartments (50 units or more), and a list of all City of Austin Affordable Housing properties. What this database showed was a gap in the actual number of properties documented, particularly smaller properties that are less than 50 units and therefore not on the original listing provided by the city of Austin. The properties on those two sets of listings were mapped over a land use map showing only multifamily zoning. Once these were overlaid, any property zoned for multifamily use without a documented property on it was then visited on a windshield survey which aimed at gathering all of these addresses along with a picture of the multifamily development on the lot. The map shown shows the boundaries that the survey followed.

Key 1/2 Buffer Original Project Area Final Project Area

Airport Boulevard Profile - 2

Airport Blvd. Character Map Because this study was done alongside an existing planning process by the city for the Upper Airport Blvd. Corridorâ&#x20AC;&#x2122;s redevelopment, the set boundaries of focus underwent two changes. Both boundaries aimed at defining the characteristics of zones in an immediate adjacency with the corridor in â&#x20AC;&#x153;transitionâ&#x20AC;? to single family residential. The first map showing four characteristic zones, as seen here, was used as the guiding boundary for the second round of data collection on rental units in the area. The second map shown here shows a more constrained boundary of the study area and what could be described as more use specific characterizations. This housing stock profile acknowledge the change in the boundary but kept the data of properties found on the original study area for a accurate sample reading.

Airport Boulevard Profile - 3

Housing Stock Survey Results

First Round:

Key 1/2 Buffer Original Project Area

Method: For the first round of our survey, we decided to look at properties in the original Airport Boulevard project area, as well as properties within a half-mile buffer. We felt that having more properties would give us a better sense of the multifamily housing situation in the area. We performed a windshield survey of lots that are zoned multifamily, but not listed as a Class C property or a COA affordable housing property. We recorded addresses and took pictures of the properties we observed. We finished our initial survey with 152 properties for which we did not have existing information. Limitations: Our final list of properties consisted of those that we were able to locate while driving in the area.

Airport Boulevard Profile - 4

Property Surveyed

Address

4606 Connelly Austin, Tx 6222 Lamar Austin, Tx 7102 Guadalupe Austin, Tx 505 Swanee Austin, Tx 6607 Guadalupe Austin, Tx 7102 Guadalupe Austin, Tx 611 E. 45th Austin, Tx 4409 Duval St Austin, Tx 407 E. 45th Austin, Tx 4510 Duval St Austin, Tx 4362 Duval St Austin, Tx 503 E. 43rd Austin, Tx 39th and Duval Austin, Tx 4002 Duval St Austin, Tx 409 E. 38th Austin, Tx 4012 Duval St Austin, Tx 4110 Duval St Austin, Tx 4210 Avenue H Austin, Tx 312 43rd Austin, Tx 4202 Speedway & 42nd Austin, Tx 4204 Speedyway Austin, Tx 4206 Speedway Austin, Tx 4209 Speedway Austin, Tx 4205 Speedway Austin, Tx 4312 Speedway Austin, Tx 4401 Speedway Austin, Tx 4409 Speedway Austin, Tx 4413 Speedway Austin, Tx 4503 Speedway Austin, Tx 4501 Speedway Austin, Tx 4504 Speedway Austin, Tx 108 W. 45th Austin, Tx 4500 Avenue D Austin, Tx 4500 Avenue C Austin, Tx 4501 Avenue C Austin, Tx 4605 Avenue A Austin, Tx 202 E. 45th Austin, Tx 4413 Caswell Ave Austin, Tx 712 Caswell Ave Austin, Tx 4307 Caswell Ave Austin, Tx 4311 Caswell Ave Austin, Tx 103 47th Austin, Tx 47th and Red River Austin, Tx 4624 Depew Austin, Tx 4708 Depew Austin, Tx 4712 Depew Austin, Tx 4628 Depew Austin, Tx 4612 Bennett Avenue Austin, Tx 4608 Bennett Avenue Austin, Tx 4520 Bennett Avenue Austin, Tx 4720 Harmon Avenue Austin, Tx 4705 Harmon Avenue Austin, Tx 4719 Harmon Avenue Austin, Tx 924 E. 51st Austin, Tx 900 E. 51st Austin, Tx 905 E. 51st Austin, Tx 5505 Helen Street Austin, Tx 5516 Helen Street Austin, Tx 909 Reinli Street Austin, Tx 5606 Stark Street Austin, Tx 5412 McCandless Street Austin, Tx 5607 Sunshine Street Austin, Tx 705 Nelray Boulevard Austin, Tx 703 Nelray Boulevard Austin, Tx 701 Nelray Boulevard Austin, Tx 700 Nelray Blvd Austin, Tx 615 Nelray Bld Austin, Tx 611 Nelray Blvd Austin, Tx 601 Nelray Blvd Austin, Tx 502 W. 55th Street Austin, Tx 5509 guadalupe Austin, Tx 5511 Guadalupe Austin, Tx 5413 Guadalupe Austin, Tx

600 Franklin Blvd Austin, Tx 606 Franklin Blvd Austin, Tx 607 Franklin Blvd Austin, Tx 608 Franklin Blvd Austin, Tx 609 Franklin Blvd Austin, Tx 610 Franklin Blvd Austin, Tx 611 Franklin Blvd Austin, Tx 5300 Guadalupe Austin, Tx 5306 Guadalupe Austin, Tx 5315 Guadalupe Austin, Tx 602 North loop Blvd Austin, Tx 612 W. North Loop Blvd Austin, Tx 608 W. North Loop Blvd Austin, Tx 606 W. North Loop Blvd Austin, Tx 701 W. North Loop Blvd. Austin, Tx 5101 Guadalupe Austin, Tx E. 51st and N. Lamar Austin, Tx 5106 N. Lamar Austin, Tx 5117 N. Lamar Austin, Tx 5200 N. Lamar Austin, Tx 509 Zennia St Austin, Tx 505 Zennia St Austin, Tx 500 Zennia St Austin, Tx 5107 Leralyn Austin, Tx 5210 Leralynn Austin, Tx 225 N. Loop Blvd Austin, Tx 300 N. Loop Blvd Austin, Tx Chesterfield Ave and Franklin Austin, Tx 5403 Chesterfield Ave Austin, Tx 211 Nelray Blvd Austin, Tx 5307 Link Avenue Austin, Tx 101 Franklin Blvd Austin, Tx 115 Franklin Blvd Austin, Tx 202 N. Loop Blvd Austin, Tx 200 N. Loop Blvd Austin, Tx 100 E. 51st St Austin, Tx 5012 Duval St Austin, Tx 5100 Bruning Austin, Tx 5203 Evans Avenue Austin, Tx 600 E. 53rd St Austin, Tx 5304 Evans Avenue Austin, Tx 5401 Evans Avenue Austin, Tx 5501 Duval Street Austin, Tx 5401 Duval Street Austin, Tx 5315 Duval Street Austin, Tx 5211 Eilers Avenue Austin, Tx 5420 Middle Fiskville Austin, Tx

Study Area Properties Round Two: Method: In surveying for our second round, we decided to eliminate the properties within the half-mile buffer of the project area. Instead, we sought information only for properties located within the original project area boundaries. We decided to collect more in-depth information for as many of these properties as possible (number of units, occupancy rate, number of rooms by unit, rental rates, room sizes). The properties for which we sought more information are located at the northern and southern ends of the project area. We called or went in person to the properties we had addresses for, and finished the survey with more detailed information for 28 of them. Limitations: We could only get information on properties where someone from management or who otherwise had access to the information would speak to us. There were a few properties that we could not get information on because a manager did not want to talk or could not be reached.

Smaller Properties 400 Kenniston 505 Kenniston 600 Kawnee 7000 Guadalupe 503 Swanee 7007 Guadalupe 5505 Helen Street 5516 Helen Street 5304 Evans Avenue 5401-9 Evans Avenue 5420 Middle Fiskville 4624 Depew 4708 Depew 4712 Depew 4628 Depew 4612 Bennett Avenue 4608 Bennett Avenue 4520 Bennett Avenue 4720 Harmon Avenue 4715 Harmon Ave., 4719 Harmon Avenue 924 E. 51st 900 E. 51st 905 E. 51st 5211 Eilers Avenue

COA Affordable Housing 6607 GUADALUPE ST 4606 Connelly 7102 GUADALUPE ST 6222 LAMAR BLVD 7102 Guadalupe St 505 Swanee Drive 7581 Chevy Chase Dr. 4305 Duval St. 5606 Lamar Blvd. N. 4505 Duval St. 4003 Red River St.

Key 1/2 Buffer Original Project Area Final Project Area Smaller Properties within Zones COA Affordable Housing Properties Large Class C Properties

Airport Boulevard Profile - 5

Large Class C Properties 600 53rd St. E. 909 Reinli St. 1020 45th St. E. 4709 Harmon Ave. 7401 Lamar Blvd. N. 6008 Lamar Blvd. N.

Survey Summary: Rental Properties & Rents

234

250 200

results of the second round housing stock survey.

100

50 0

Average Number of

131

150

The following data summarize the

Average Occupancy Total Number of

Total Number of Units

8 Efficiencies

1 BR

The Numbers reflect the results of average from 27 properties distributed in the northern and southern districts of the study area.

2 BR

3 BR

Unit Type

Rental Rates What is interesting to note from the results of the study is the large number of 1 bedroom units. Out of 501 units, over half (234) were 1 bedroom. At the same time, 27.5% (138) had 2 or more bedrooms.

$1,817.50

$2,000.00 $1,500.00 $1,000.00 $526.50

$574.89

Efficiencies

1 BR

$709.38

$500.00

2 BR

3 BR

Unit Type

Average Unit Size 1200

1100

1000

947

669 600 400

400

200 0 EďŹ&#x192;ciencies

1 BR

Unit Type

Airport Boulevard Profile - 6

2 BR

3 BR

Survey Summary: Comparison of Rents In making the case for the affordability of the housing stock in the study area, making comparisons to local and national benchmarks was imperative. As shown in the graph, the all three types: efficiencies, 1 bedrooms, and 2 bedrooms, had average rents that were around $200 lower than the â&#x20AC;&#x153;fair market valueâ&#x20AC;? as defined by HUD.

Study Area Rents Vs Fair Market Value Rents

$527 $709 $575

Avg Rent FMR Efficiency 1-BR

Additionally, when comparing the average rental rates of the study area to the median family income, as listed by the U.S. Department of Housing and Urban Development, the rents offered in the study area are affordable, on average, to households with incomes between 30-50% of regional median family income. Such low average rents establish the district as very affordable.

Airport Boulevard Profile - 7

AVG $ $ $

$ $ $

30% $ $ $

2-BR 50% $ $ $

60% $ $ $

Study Area Properties As previously mentioned, the study further analyzed the housing stock of two separate zones, north and south. The northern zone as shown in the map focused on properties with the study area north of Highland Mall. The southern zone focused on the clustering of properties in the southern end of the study area using 51st street as the cut off for the northern boundary.

Key 1/2 Buffer Original Project Area Final Project Area Smaller Properties within Zones COA Affordable Housing Properties Large Class C Properties

Airport Boulevard Profile - 8

Airport Boulevard Profile: North End Demographics Overview Race/Ethnicity: Race/ethnicity demographics are frequently difficult to measure. This analysis of race/ethnicity was conducted using census 2010 tabular data and demographic maps created in Social Explorer. It is important to note that the Hispanic/Latino demo graphic group is not desegregated by race, therefore the majority of Latino individuals are categorized as white. Census data reports that the city of Austin is majority white (70 percent), approximately 12 percent black, 4 percent Asian, and 10.5 percent some other race demographic. Residents in the Northern study are 80.6 percent white, 3.7 percent black, 2.7 Asian and 11.3 percent some other race. When disaggregated by ethnicity the study is area (both zones) is approximately 35 percent Latino.

I-35

Airport Boulevard Profile - 9

Household Family Status: To depict local citizen composition the research team examined household type by family statistics. Use of census 2010 tabular and mapping data revealed that 23 percent of households are families with children.

I-35

Airport Boulevard Profile - 10

Home Occupancy Typologies: Home occupancy type factor concerns whether residential structures are occupied by owners or renters and whether units are occupied or vacant. Firstly, by reviewing census 2010 tabular data as well as maps generated in Social Explorer we observed that a considerable number of residential structures are occupied by renters, 69 percent. At the same time, we found a very low rental vacancy rate of less than 5 percent. The maps show many areas as having vacancy rates of less than one percent.

I-35

Airport Boulevard Profile - 11

North Zone Rental Housing The property survey revealed a total of 9 multiunit rental properties in the northern zone. Six were identified through the windshield survey, and three were from the city of Austinâ&#x20AC;&#x2122;s list of affordable housing properties. We found no large Class C apartments were in this area. It is interesting to note the clustering of properties found on the Neighborhood Transitional Zone(yellow) as defined by the Upper Airport Blvd. Redevelopment Character Map.

Key Original Project Area Final Project Area Neighborhood Transition Zone Corridor Mixed Use Zone Local Mixed Use Smaller Properties within Zones COA Affordable Housing Properties Large Class C Properties

Airport Boulevard Profile - 12

North Zone Rental Housing 1

The following is the photographic catalog of the properties in the northern zone.

Smaller Properties within Zones COA Affordable Housing Large Class

Airport Boulevard Profile - 13

North Zone: Typologies

Duplex/Single Family Conversion 6

3+ Units 1

A breakdown of the multifamily properties into typologies reveals a predominance of rental properties of 3 or more units as oppose to smaller duplex types. The study focused on making a distinction among property types to perhaps reveal any trends in single family to multifamily conversions. This zone did not show a clear trend in that direction.

Smaller Properties within Zones COA Affordable Housing Properties Large Class C Properties

Airport Boulevard Profile - 14

North Zone: Rental Properties Survey Out of the study area total sample of 501 units, 116 fell in the northern zone, about 1/5th of the total sample. The average building had 12 units.

North

North Zone: Total Number of Units 45 40 35 30 25 20 15 10 5

Smaller Properties COA Affordable Housing Large Class C Properties Total

Property Types North

Efficiencies

Efficiencies comprise the majority of the units. And an occupancy rate of 100% for the sample revealed a high level demand for the housing stock in this northern zone.

1 BR

2 BR

3 BR

Characteristics

Unit Type

North Zone: Average Rental Rates $745.00

$800.00 $700.00 $600.00 $500.00 $400.00 $300.00 $200.00 $100.00 $-

$652.50

Efficiencies

1 BR

3 BR

Unit Type

North Zone: Average Unit Size 929

1000 801 800 600 400 400 200

0 0

Eﬃciencies

1 BR

Unit Type

Airport Boulevard Profile - 15

6 3 0 9

2 BR

3 BR

Total Average Occupancy

116 12 100%

AISD School servicing Study Area Four elementary schools serve the Airport Boulevard Corridor (see Figure 1). The northern zone of the corridor is served by Brentwood Elementary. The central zone where the highest concentration of properties is located is served by Reilly and Ridgetop elementary schools. Combined, these schools serve a high concentration of low income, Hispanic, highly mobile student population (see Figure 2). The southern- most zone of the corridor is serviced by Lee Elementary.

Key 1/2 mile Airport Blvd. Final Project Area School

Airport Boulevard Profile - 16

North Zone: Elementary Schools Feeder Patterns All of the elementary schools in the study area were rated either “exemplary” or “recognized” under state accountability metrics in 2011. For an elementary schools to be rated “recognized” or “exemplary” under the state accountability system, 80% and 90% or more of students at these schools must meet standards for passage of each subject of the Texas Assessment of Knowledge and Skills (TAKS). In order to achieve this status, all students and sub-groups of students must meet this standard. Scores are compiled for individual racial and ethnic groups as well as students classified as “economically disadvantaged” or “limited English proficiency.” Schools with high concentrations of economically disadvantaged students and high mobility rates typically fail to meet accountability standards for all subgroups. Reilly Elementary is currently rated “academically acceptable.”

Key

Airport B lvd. Final Project A r e a Properties Zoned for Reilly Elementary Properties Zoned for Ridgetop Elementary Properties Zoned for Lee Elementary Schools

Airport Boulevard Profile - 17

Transit

Capmetro: Metro Rail The Austin MetroRail line runs through the entirety of the study area alongside the western edge of Airport Boulevard. Stops are found at the intersection of Airport and Lamar Boulevard and just west of Highland Mall. Individuals who live in the study area have close access to the rail line, but where they can ride it to is still quite limited. The line only runs north and south at this point, with suburbs northwest of Austin being its furthest northern destination and downtown being its furthest southern destination. The MetroRail stops we observed are still new and in good condition.

Crestview Station

http://southernbrownfieldreport.files.wordpress.com/2010/07/austincommuter-rail.jpg

Highland Station

Bike Lanes: Many of the streets in the study area have bike lanes on the outside shoulder. However, these lanes are largely found on neighborhood streets. Bike lanes are not as prevalent in the northern part of the study area, but there are still quite a few.

Key I-35 Metro Rail Final Project Area

Airport Boulevard Profile - 18

Parks and Natural Features 1

There are no true parks within the northern part of the study area, but several just outside. All of the parks we looked at are close enough to the study area to be in comfortable bike or busriding distance. Brent- wood Park and the North Austin Optimist Baseball Field are located just west of Lamar Boulevard. Both are neighborhood parks and neither are large in size. The Crestland and Meadowview Triangles are located just east of Lamar Boulevard. Both of these are officially designated as park land, but as the name suggests, neither are more than a triangle of grass in the middle of a neighborhood street. The University Hills Optimist Club Clubhouse is east of Airport Boulevard and just north of Highland Mall.

4 3

1 North Austin Optimist Baseball Field 5

Crestland Triangle

Key 1/2 Buffer Final Project Area Creek Line

Meadowview Triangle

0.2 Annual Chance of Flood City of Austin Parks

University Hills Optimist Club Clubhouse

"87% of people in Austin say itâ&#x20AC;&#x2122;s important to live near open space (Austin Community Survey), but 63% of those that live in the urban core do not live within walking distance of one." 4 Brentwood Park

Airport Boulevard Profile - 19

source: COA- Urban Parks Workgroup Report

Health/Social Amenities

The community surrounding the study area is both demographically and commercially diverse. To better comprehend the goods and services that local residents have nearby, within one mile, access to the research team further examined the local context. Two areas of great importance for a high quality standard of living are access to healthcare and food. Area surveys of these two life essentials were completed through online mapping and physical exploration of the neighborhood. Unfortunately, the northern zone has limited access to both healthcare facilities and grocery stores. There is only one healthcare based enterprise within a half-mile radius of the study, an acupuncture and herb store. Fortunately, there is a full service health facility within one mile of the northern study area, the Austin Regional Clinic which serves all community members with various public and private insurance plans.

Regrettably, the northern zone only has one destination for groceries within a mile radius, the New Oriental Market. Community members without a demand for Oriental goods and who walk as a major mode of transit would be challenged by the limited provisions of health and food options.

Health Care Facilities (North Zone) Facility Name

Accept Government Subsidized Plans

Within Half Mile Community Acupuncture & Herbs (300 W. Huntland Dr.)

Not applicable

Within Â˝ To 1 Mile Austin Regional Clinic (6937 N. IH-35, #400)

Grocery Stores (North zone) Within half mile New Oriental Market (6929 Airport Blvd, #121) Within 1/2 to 1 mile None

Airport Boulevard Profile - 20

Yes

Airport Boulevard Profile: South End Demographics Overview Race/Ethnicity:

I-35

Statistics reflecting the southern territory are quite similar to that of the northern district. The southern boundary is comprised of 75.4 percent white, 6.2 percent black, 6.8 Asian, and approximately 11 percent biracial or some other race. As previously stated, when disaggregated by ethnicity, the study area is 35 percent Latino.

I-35

Airport Boulevard Profile - 21

Household Family Status: Interesting family trends were noted in the southern zone. The identical method was used to collect data on the percentages of families with children present in the southern area. Only 12 percent of households included children. There are many possible explanations for the low percentage of children present in the northern and southern districts. It is conceivable that persistent preferences for suburban child rearing, lack of larger apartments or single family homes, and costs of living may hold explanatory significance.

I-35

Airport Boulevard Profile - 22

Home Occupancy Typologies: Residential trends were noted in the southern territory explored by the research team and compared to the northern zone. Again, home ownership and rental vacancy rates were examined. Through use of census 2010 data we found that approximately 79 percent of residential structures were renter occupied. As in the northern zone, a very low rental vacancy rate was also observed in the south.

I-35

Airport Boulevard Profile - 23

South Zone Rental Housing The housing stock survey revealed a total of 17 properties along the southern zone. Out of those, 14 were small rental properties, 1 was on the City of Austinâ&#x20AC;&#x2122;s Affordable Housing Properties list, and 2 were on our list of larger Class C apartment properties. As shown on the map, a large number of the newly identified properties fall right on the edge of the study area boundary in both the neighborhood transition and corridor mixed used zones.

Key

Original Project Area Final Project Area Commercial Transition Zone Highway Mixed Use Zone Neighborhood Transition Zone Corridor Mixed Use Zone Local Mixed Use Smaller Properties within Zones COA Affordable Housing Properties Large Class C Properties

Airport Boulevard Profile - 24

South Zone Rental Housing

The following is the photographic record of the south zone.

17 Smaller Properties within Zones COA Affordable Housing Properties Large Class C Properties

Airport Boulevard Profile - 25

South Zone: Typologies A breakdown of the multifamily properties into typologies reveals a the diversity in scales of the properties in the southern zone ranging from the larger Class C apartments of 50 units or more to smaller buildings and duplexes. As previously stated, the study focused on making a distinction among property types to reveal any trends toward single family to multifamily conversions. This zone showed a clear trend in that direction perhaps due to its proximity to adjacent single family neighborhoods.

Duplex/Single Family Conversion 1

Smaller Properties within Zones COA Affordable Housing Properties Large Class C Properties

Airport Boulevard Profile - 26

3+ Units 2

South Zone: Rental Properties Survey

South Zone: Total Number of Units

South

Total Average Occupancy

223

250

389 22.8 95%

Units Stats

200

Out of the study area total sample of 501 units, 389 of them were in the southern zone, nearly 80% of the sample. The average building had about 23 units.

150 100 29

Efficiencies

Again, the majority of units were one bedrooms (223 or 77 percent). And an occupancy rate of 95%, while not as high as in the north zone, still proves a high level of rental housing demand in the southern zone.

South

110

1 BR

2 BR

3 BR

Unit Type

South Zone: Average Rents $2,000.00 $1,500.00 $1,000.00 $500.00 $-

Efficiencies

1 BR

2 BR

3 BR

Unit Type

South Zone: Average Unit Size 1100

1200 909

1000 800 600

626 400

400 200 0 Eﬃciencies

1 BR

Unit Type

Airport Boulevard Profile - 27

2 BR

3 BR

Smaller Properties COA Affordable Housing Large Class C Properties Total

Properties Stats

14 1 2 17

South Zone: Elementary Schools Feeder Patterns Ridgetop Elementaryâ&#x20AC;&#x2122;s concentration of low income and Hispanic student population is greater than the overall concentration rates of the school district; yet these student populations outperform their peers throughout the district (see Figures 2 and 3). This elementary school also demonstrates a lower rate of student mobility than the rest of schools in the area with similar demographic profiles.

Key Airport Blvd. Final Project Area Properties Zoned for Reilly Elementary School Properties Zoned for Ridgetop Elementary School Properties Zoned for Lee Elementary School School

Airport Boulevard Profile - 28

Ridgetop Elementary School: Accountability Statistics It is important that the City consider the impact of redevelopment in the Airport Boulevard Corridor on local schools such as Ridgetop Elementary. Low income households generally have high rates of mobility typically due to financial reasons. Maintaining affordability should be a major priority in the redevelopment process so that low income students remain in a school that has a proven track record of successfully closing academic achievement gaps. Figure 2: Elementary Schools serving the Airport Boulevard Corridor, Student Population, 2011 Hispanic

Economically Disadvantaged

Limited English Proficiency

Mobility Rate (2009 )

42.00%

47.10%

13.10%

17.00%

83.10%

94.00%

66.90%

29.90%

Ridgetop Elementary (Exemplary)

81.00%

79.00%

51.00%

17.80%

Lee Elementary (Exemplary)

24.10%

14.30%

2.80%

8.9%

AISD

60.3%

64%

Elementary School (State accountability rating) Brentwood Elementary (Recognized) Reilly Elementary (Recognized)

28.7%

22.6%

(Academically acceptable) Source: Demographic data and campus mobility rates are from the Texas Education Agency, Academic Excellence Indicator System, 2010-2011 Campus Profile. Campus mobility rates are for 2009-2010 (same source.)

Figure 3: Students meeting Texas reading standards, 2010-11, percent Elementary School (state accountability rating)

All students

Hispanic

Economically disadvantaged

Ridgetop Elementary

96%

99%

95%

AISD 87% 81% 81% Source: Texas Education Agency, Academic Excellence Indicator System, 2010-2011 Campus AEIS Results, Report for Ridgetop Elementary School. .

Airport Boulevard Profile - 29

Parks and Natural Features As in the northern part of the study area, there are no parks found within the southern part itself. However, Shipe Park is found in the Hyde Park neighborhood just south of the study area. Shipe is a small neighborhood park like the parks found north of the study area and is in comfortable bike and bus riding distance from the southern part of the study area.

1 Shipe Park

“The national benchmark for an “accessible” park is one that is within a ¼ mile safe walking distance.” Source: COA- Urban Parks Workgroup Report

Key

Airport Boulevard Profile - 30

1/2 Final project area Creek line Annual chance of flood City parks

Transit Airport Blvd, Transit corridor: Both the northern and southern parts of the study area are located centrally in Austin and thus have a large number of bus lines running through. Individuals living in the study area have convenient access to bus lines going in all directions to other parts of town. It appears entirely possible to live within the study area and not own an automobile. The bus stops themselves are not of uniform quality. Many along Airport Boulevard itself have benches and sign positing in good condition, while several on Lamar Boulevard are quite dirty and damaged. The diversity in waiting area conditions is found in both the northern and southern parts of the study area. Some of the stops in the study area consist only of signs, with no benches or covering. Bike Lanes: As in the northern part of the study area, the lanes are found primarily on neighborhood streets. Some of the larger streets (Guadalupe, 51st, North Loop) have lanes, but the two

Airport Boulevard Profile - 31

largest and busiest streets in the study area (Airport and Lamar Boulevard) do not have bike lanes and are not particularly bike-friendly. Airport and Lamar run north and south across the study area and have little to no convenient bike access in either section. While individuals living in the study area would not have much trouble getting to neighborhood parks, schools, or bus stops, it does not appear to be safe to travel on these two major streets by bicycle.

Health/Social Amenities

Residents in the southern portion of the study area are better served with healthcare and grocery options. Healthcare options are multiple. There are two pain clinics and two Eastern medicine shops within one-half mile of the boundary. Of great importance, there are three healthcare centers within a mile of the southern study area. They include a full service pediatric hospital, and two comprehensive community clinics that accept public and private insurance payment. Access to groceries is also improved in this area as there are two large, full service grocery chain grocery stores containing thousands of fresh food and personal care items.

Health Care Facilities (South Zone) Facility Name

Accept Government Subsidized Plans

Within Half Mile The Hendirkz Clinic Family Practice (4361 Airport Blvd.)

Private plans

Pain Management Consultants (101 W. Koenig Lane, #100)

Private plans

Community Acupuncture & Herbs (300 W. Huntland Dr.)

Not applicable

Elephant Acupuncture & Massage rd (401 E. 53 Street, #204)

Not applicable

Herbs & Things rd (204 E. 53 Street)

Not applicable

Within Â˝ To 1 Mile Dell Childrenâ&#x20AC;&#x2122;s Medical Center (4900 Mueller Blvd.)

Yes

Seton Family Healthcare (5555 N. IH-35)

Yes

CommUnity Care st (1000 E. 41 Street, #925)

Yes

Grocery Stores (South zone) Within half mile None Within 1/2 to 1 mile HEB Hancock Cener (1000 E. 41st.) Fiesta Mart (3909 N IH-35)

Airport Boulevard Profile - 32

Airport Boulevard Profile: Assets & Opportunities Kirwan Opportunity Maps Based on the maps that we chose to pull out, it appears that the study area has mostly high to very high education and health opportunities. According to the maps, west Austin has a much higher prevalence of opportunity for these two measures than east Austin. The study area is located very centrally, but seems to share the westâ&#x20AC;&#x2122;s high prevalence of opportunity. Housing and neighborhood quality opportunity, however, is quite low. This is in contrast to very high housing and neighborhood quality opportunity in west Austin. The final map shows the location of subsidized housing in Austin. The vast majority of subsidized housing in Austin is east of Highway 35 and thus not in the study area.

Airport Boulevard Profile - 33

Conclusion: How to move forward In this section, we presented a profile of the study area, documenting the existing affordable multifamily housing stock and important features of neighborhood context. As the Upper Airport Boulevard Initiative moves forward, we hope this information will be used to understand who lives in the area now, where they live, and the amenities and resources that are valuable to residents currently. The demographic diversity of the resident base offers an opportunity to preserve an integrated community by keeping it affordable to its residents. While the profile documented an abundant affordable housing stock, the benefit provided by this housing must be balanced against the often poor condition of these buildings. Properties like some of those profiled in more depth later in this report are quite vulnerable to redevelopment, and likely to be unaffordable to current residents once this happens. The city could play a key role in the preservation of affordability. Amenities such as the MetroRail and exemplary schools such as Ridgetop Elementary make this area attractive to both current residents and future ones. For low income residents, ensuring ongoing access to the areaâ&#x20AC;&#x2122;s high performing schools is especially important. Increasing the number of family-sized units and ensuring that buildings that are zoned for Ridgetop and other high performing elementary schools become ongoing sources of affordable housing should be prioritized.

Airport Boulevard Profile - 34

Chapter 2: References Urban Parks Workgroup (2011). City of Austin Report Recommendations. Retrieved from: http://austintexas.gov/sites/default/ files/files/Capital_Planning/Bond_ Development/Parks_Open_Space_Committee/urban-parks-workgroup-final-report.pdf Capital Metro. Current Riding Schedules. Retrieved from : https://www.capmetro.org/riding/current_schedules/maps/system_map.pdf Capital Metro. MetroRail Stations. Retrieved from: https://www.capmetro.org/metro-rail/stations.asp Kirwan Institute for the Study of Race and Ethnicity (2007). The Geography of Opportunity: Austin Region. Retrieved from: http://greendoors.org/docs/opportunity_mapping/Austin_Opportunity_Report.pdf Bike lanes info Retrieved from: http://googlemapsbikethere.org/ wp-content/uploads/2008/06/austin_bike_map_pdf.png http://www.socialexplorer.com/ Texas Education Agency, Academic Excellence Indicator System, 2010-2011 Campus Profile. Texas Education Agency, Academic Excellence Indicator System, 2010-2011 Campus AEIS Results. Report for Ridgetop Elementary School. FMR and MFIs: U.S. Dept of Housing and Urban Development.

Airport Boulevard Profile - 35

Chapter 3: Neighborhood Plans, Form-Based Code and Affordable Housing In this chapter, we will develop strategies for adapting and incorporating existing rental properties into neighborhoods adopting form-based codes. We begin by reviewing local neighborhood plans, then discuss the goals of the current Airport Boulevard Initiative, how form based codes, based on the principles of “smart codes,” might be used to bridge neighborhood and corridor goals. We then present three case studies as a way to illustrate how design strategies can be used to marry these goals,

Analysis of Neighborhood Plans Neighborhood planning is a process that allows citizens to shape the neighborhoods where they live, work or own property. The neighborhood planning process addresses different issues such as land use, zoning, transportation and urban design. This process allows citizens to take a proactive role in the decisionmaking process of designing their future environment. The methodology we used to analyze neighborhood plans consisted of understanding different housing typologies defined by the neighborhoods and identifying the design elements that could be used for the purposes of proposing a future form-based code. Our study of Airport Boulevard includes two neighborhood planning areas: The Northloop Neighborhood plan and The Brentwood/Highland Combined Neighborhood plan. Northloop Neighborhood Plan The Northloop Neighborhood Plan vision is to create a vibrant mixed-use neighborhood, where commercial and residential uses are combined, creating an interesting streetscape that enhances the unique and eclectic character of the neighborhood. The plan envisions a neighborhood where you can find “all functions of daily life within walking distance.” For them, the mix of uses and the enhanced walkability will help to build personal and community relationships. Some of the goals the neighborhood has set for their plan that are related to housing are: 1. Encourage housing for a variety of income levels; 2. Create more public space; 3. Promote neighborhood identity, strength, and viability; 4. Create a mix of land uses that complement the local neighborhood and are at a density that will support local businesses and transit; Plans and Form-Based Codes - 1

5. Create urban design guidelines that improve the appearance and maintenance of the neighborhood. Encourage high quality design and construction of human scale that have an inviting and appealing look. Plant more trees and maintain the health of existing ones.

Relevant elements for a form-based code We went through the sections of the plan that were related to single-family housing, multifamily housing and mixed-use residential and commercial. We highlighted the characteristics that implied the use of design elements that could be used in a form-based code. 1. Character of buildings: new development should reflect the design, and be consistent in size and scale, to the existing character of the 1930s and 40s homes that currently exist there. Residential neighborhoods should be visually interesting with different colors and materials. Use of covered front porches, which are common in the neighborhood, is encouraged. 2. Building scale: infill housing should be consistent in scale and design to the existing neighborhood homes, while using contemporary materials. Townhouses can provide an effective transition between commercial or higher density multifamily residential and single- family residential areas. 3. Parking: garages should be set to the rear of lots, and entered from back alleys. 4. Landscape and streetscape: include one or two trees per lot along the street. Wider sidewalks, better lighting, and public seating areas are encouraged. 5. FaĂ§ade composition: Narrow spacing of units and multiple entries on the street to more closely resemble single-family houses. Horizontal and vertical setbacks and protrusions, varied rooflines, materials and colors can be used to divide larger buildings into increments (+/- 40â&#x20AC;&#x2122;), consistent with existing lot lines and smaller buildings now found along the corridor.

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The Brentwood/Highland Combined Neighborhood Plan The Brentwood/Highland Combined Neighborhood plan vision encourages limited mixed-use development, creation of parks and green spaces, building a strong sense of community and providing accessibility for all means of transportation. Some of the goals the neighborhood has set for their plan that are related to housing are: 1.

Preserve and enhance the single-family residential areas and housing opportunities for persons with disabilities;

Maintain existing civic and community institutions;

Provide a mixture of compatible and appropriately scaled business and residential land uses in the neighborhood;

Encourage mixed-use development on major corridors;

Encourage walkability;

Focus higher density uses and mixed-use development on major corridors;

Improve affordability of home-ownership and rental properties;

Preserve the diversity, character and scale of homes in the neighborhood by encouraging renovations and new development to be compatible with existing homes;

Preserve historic properties identified as contributing to neighborhood character;

10.

Use urban design guidelines to encourage the desired neighborhood character. The guidelines aim to reinforce the positive elements, patterns, and characteristics that exist or are desired within the neighborhood. This helps each neighborhood to create a unique sense of place within the city.

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Analysis of Airport Blvd Initiative The â&#x20AC;&#x153;Upper Airport Boulevard Initiativeâ&#x20AC;? aims to establish a vision for a more walkable, mixed-use, and vibrant corridor by coordinating public and private investments, providing more transportation options and establishing rules and tools to develop a positive environment. Part of the initiative is to design a form-based code that helps to create an appropriate design context for the upcoming development changes. The plan proposes seven character zones: local mixed-use, neighborhood transition, commercial transition, civic campus, highway mixed-use, corridor mixed-use and mixed-use highland mall. Our study consisted in a comparison between the proposed character zones of the Airport Boulevard Initiative and the characteristics proposed by the Neighborhood plans for their residential and mixed-use zones. The character zones that presented similarities with the Neighborhood plans were: 1. Local Mixed-Use: consists in small scale, incremental mixed-use development, encourages the retention of the unique, independent business mix and the creation of a pedestrian-friendly public realm along Airport Boulevard. 2. Neighborhood Transition: Consists in small scale office and residential building types such as live-work, townhomes, duplexes, and patio homes among others. This zone should have a neighborhood scale and should be compatible with adjoining residential neighborhoods. 3. Commercial transition: this zone is a transition between high visibility and high traffic corridors and established neighborhoods. It consists in small scale office, retail, live-work, and urban residential infill building types that are similar in scale and compatible with the adjoining residential uses. Figure 1 shows the compatibility between the neighborhood plans land uses and the Airport Boulevard Initiative proposed character zones. From our review, we identified that the characteristics proposed by the neighborhoods in their single family, higher density single family and multifamily land uses were compatible and similar to the neighborhood transition zones proposed by the Airport Boulevard Initiative. In the same way, the commercial and mixed-use design guidelines proposed by the neighborhoods were compatible with the features of the local mixed use and commercial transition zones proposed by the Airport Boulevard Initiative.

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Figure1 Neighborhood Plans Land Use Map and Airport Blvd Initiative Proposed Character Zones

Smart Codes A smart code is a model transect-based planning and zoning document based on environmental analysis. It comprises all scales of planning and its main objective is to reform the sprawling patterns of separateduse zoning. Transect zones The Transect classifies habitats from the most natural to the most urban. Its continuum, when subdivided, lends itself to the creation of zoning categories. These categories include standards that encourage diversity similar to that of organically evolved settlements. The standards overlap, reflecting the successional Eco tones of natural and human communities. The Transect thereby integrates environmental and zoning methodologies, enabling environmentalists to assess the design of social habitats and Urbanists to support the viability of natural ones.

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T-4 General Urban Zone This zone consists of a mixed use but primarily residential urban fabric. It may have a wide range of building types: single, side yard, and row houses. Setbacks and landscaping are variable. Streets with curbs and sidewalks define medium-sized blocks. T-4 GENERAL URBAN General Character

Building Placement

Mix of Houses, Townhouses & small Apartment buildings, with scattered Commercial activity; balance between landscape and buildings; presence of pedestrians Shalow to medium front and side yard setbacks

Frontage Types

Porches, fences, dooryards

Typical Building Height Type of Civic Spaces

2 to 3 story with a few taller mixed use buildings Squares, greens

T-5 Urban Center Zone This zone consists of higher density mixed use buildings that accommodate retail, offices, row houses, and apartments. It has a tight network of streets, with wide sidewalks, steady street tree planting and buildings set close to the sidewalks. T-5 URBAN CENTER ZONE General Character

Building Placement Frontage Types Typical Building Height Type of Civic Spaces

Shops mixed with townhouses, larger apartment houses, offices, workplace, and civic buildings; predominantly attached buildings; trees within the public right-of-way; substantial pedestrian activity Shallow Setbacks or none; buildings oriented to street defining a street wall Stoops, shopfronts, galleries 3 to 5-story with some variations Parks, plazas and squares, median landscaping

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a. Building Frontage Assemblies:

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b. Affordable Housing SmartCode Policy:

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Case Studies Case study selection rationale The three case study sites were chosen in collaboration with Alan Holt, the principle planner for the cityâ&#x20AC;&#x2122;s urban design division, because they each represent a unique approach to preserving and increasing the amount of affordable housing in the Airport Boulevard study area. Scenario A: The 53rd Street site was chosen because its current use does not adhere to either the neighborhood plans or Airport Blvd Initiative plans, so it is assumed that the site will be fully reconstructed in compliance with form-based codes, therefore providing the opportunity for a new construction design proposal. Moreover, both the neighborhood plans and Airport Blvd. initiative plans call for mixed-use development (commercial transition), so this site allows for design proposals and financial investigations into how to accommodate affordable housing into a newly constructed mixed-use structure.

Additionally, the site allows for a demonstration of how form-based codes could be used to

create structures that adhere to the neighborhood planâ&#x20AC;&#x2122;s compatibility guidelines regarding height, bulk, and design as well as form-based codes compatibility standards in regards to transect locations; either T4 or T5. Scenario B: The 53rd Â˝ Street site was chosen because the single-family house has a rear alley, allowing for the unique consideration of alley flats into the fabric of the Airport Blvd. study area. Adding alley flats is in compliance with the neighborhood plans and the Airport Blvd. Initiative because they both call for appropriately scaled density, and through the addition of alley flats, this density could come partially in the form of affordable housing. Scenario C: The 45th Street location was selected because it presented the opportunity to improve the pedestrian realm for a structure that is projected to remain unaltered for the next 30 years. Through these pedestrian improvements, the site would connect more seamlessly with the new structures built nearby which would utilize the new form-based code, therefore creating a more cohesive neighborhood and presenting the 45th Street site as adhering to form-based code principles, even though structure itself has been unaltered.

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Form-Based Design Proposals

The location for the 53rd Street site is currently a used car lot, but the neighborhood plans and Airport Blvd. initiative call for that area to become mixed-use or a commercial transition zone. Therefore, it is assumed the current use will be vacated, and a new structure that adheres to form-based principles will be constructed. This presents an opportunity to enhance the pedestrian realm while also maintaining the vehicular right-of-way. To maintain the current 10’ lanes, 10’ turning lane, and two 5’ bike lanes but improve the pedestrian experience, the sidewalks and vegetated buffer will have to be built out into the vacated land, setting the building back 16’ from the street. This is only 1’ further back than the current building, but because the fully paved parking and access area in front of the current building is converted into a delineated 10’ sidewalk and 6’ buffer, the pedestrian realm is greatly enhanced. Additionally, the buffer will have trees planted and lighting that illuminates the street and sidewalks. Where the current building sits, a new four-story mixed-use building is proposed, with ground floor retail and three floors of residential; as envisioned by the neighborhood and city. To provide parking for residents and patrons, spaces are amply provided behind the building.

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Vehicular lane & parking assemblies The program for vehicular lanes and parking assemblies requires Bennett Street, and 53 ½ Street to be narrowed, allowing for enhanced pedestrian environments. At 53rd Street, the right-of-way remains the same, but pedestrian improvements are achieved through the proposed new development. The number of travel lanes remains the same for all streets. At Bennett Street, the travel lanes are reduced to allow for 10’ parallel parking because off-street parking is to be reduced. Furthermore, the current 12’ sidewalks are to be enhanced. At 53 ½ Street, the current 40’ roadway will be narrowed to two 10’ travel lanes, 20’, with 10’ sidewalks added to each side where there currently are no sidewalks. At 53rd Street, the sidewalk on the development side will be widened from 5’ to 10’ and the bike lanes remaining at 5’ each. Both 53 ½ Street and 53rd Street will not have parking as the available right-of-way does not allow for it. If the pedestrian zone is limited or land adjacent to the right-of-way can be acquired, parallel parking can and should be accommodated. Plans and Form-Based Codes - 3

53rd Street: Current – 30’ roadway (including center turn lane), 5’ bike lanes, 5’ sidewalks, no parking Revised – 30’ roadway (including center lane), 5’ bike lanes, 10’ sidewalks (only on development side), no parking

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53rd ½ Street is currently configured as a 40’ two-lane with no sidewalks even though it is a single-family residential neighborhood. The excessive lane widths allow for traffic to move at high speeds, while the lack of sidewalks forces pedestrians into the road, causing a significant hazard.

To remedy this

configuration, the two lanes are reduced to 10’ each, allowing for 10’ pedestrian zones on either side of the road. This 10’ pedestrian area is divided into 4’ buffers and 6’ sidewalks. Moreover, the buffer will be lined with trees and street/sidewalk lighting will be installed. 53rd ½ is also unique for the Airport Blvd area for having an accessible alleyway. Following the neighborhood plan and Airport Blvd. Initiative, alley flats are proposed for back lots for residents that choose to construct them. This not only builds the density of the area in a manner consistent with the neighborhood’s current form, but also adds to the affordable housing stock of the area as the small alley flats can be rented out at lower rates than traditional apartments. Furthermore, the income earned from the alley flats helps homeowners with their expenses, like mortgages; providing them financial relief and stability as land values potentially rise as a result of the Airport Blvd improvements.

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53rd ½ Street: Current – 40’ roadway, no sidewalks, no parking Revised – 20’ roadway, 10’ sidewalks, no parking

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At the 45th Street site, the Bennett Avenue side right-of-way and building setback will be enhanced with form-based code principles. The 45th St. side will not be altered because an adjacent building sits between the site and the road, limiting the impact of any site improvements. Currently, the Bennett Avenue side of the building is devoted entirely to pull in parking, with a building-length curb cut serving as parking access and the pedestrian right-of-way. With this configuration, there is no space for trees that would shade the sidewalk, nor is there space available for off-street parking, as that would block the building’s parking. Moreover, having a loosely defined sidewalk is unsafe for pedestrians as cars backing out or pulling in along the entire sidewalk length present a substantial hazard. Therefore, in the design proposal, the parking access is reconfigured so there are only two access points. This is achieved by converting the current pull-in parking into parallel parking along the building and providing an 8’ access lane next to the parking spots. This access lane would be one way and cars would pull into it at one end of the building, then drive its length to find a spot, and exit at the other end of building. This reduces the continuous curb cut to only two that are about 8’ long; much safer for pedestrians and drivers. Furthermore, through this configuration, the previously unsafe pedestrian zone can be reconfigured to provide a 6’ buffer between the street and 8’ sidewalks. Moreover, there is a 2’ vegetated buffer between the sidewalk and access lane of the building. Along the 6’ buffer between the street and sidewalk, trees will be planted and pedestrian scale lighting installed. Lastly, because the continuous curb cut was removed, street parking is now available, replacing the spaces lost due the building’s parking Plans and Form-Based Codes - 7

reconfiguration. This also separates the pedestrian from the street traffic by an additional 10â&#x20AC;&#x2122;, greatly improving the pedestrian experience.

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45th Street (Bennett Avenue): Current – 30’ roadway, 12’ sidewalks Revised – 20’ roadway, 10’ one-side parking, 8’ sidewalks

Recommendations Relationship between Neighborhood plans and the new form-based code Scale compatibility: both neighborhoods, Northloop and Highland, consider it important that any construction, whether new or a renovation, should be consistent with the existing character of the neighborhood. We recommend that the proposed commercial and neighborhood transition zones of the Airport Boulevard Initiative should be in the scale of transects T-4 and T-5, adjusting them depending on the context in which they are located. Rear parking and street parking: In order to preserve and improve the pedestrian character of the neighborhoods, both Neighborhood Plans stress the importance of locating parking lots at the rear of the properties. Compatibility of character (similar to existing development): we recommend using the elements described in this report, such as covered porches, landscaping, lighting and façades design, to create a form-based code that is compatible with the existing neighborhoods.

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Walkability: Allow mixed-use that is in scale with residential neighborhoods and that allows residents to satisfy their basic consumption needs within walking distance of their homes.

Renovation of existing affordable housing Focus on minor renovations in order to maintain the affordability of properties. Improve pedestrian activity: wide sidewalks, landscaping that shades the streets in order to enhance walkability, design and implement appropriate lighting that is in scale with pedestrians. Reconfigure parking design: for those properties that have parking at the front of the street, demand its rearrangement at the back of the property and allow residents to park on the street. Improve facade design with elements such as building awnings, windows, and construction materials, which are elements that do not require a large amount of investment but create better environments.

Chapter 3: References http://www.formbasedcodes.org http://www.smartcodecentral.org http://airportboulevard.com Northloop Neighborhood Plan: ftp://ftp.ci.austin.tx.us/npzd/Austingo/nloop-np.pdf Brentwood/Highland Neighborhood Plan ftp://ftp.ci.austin.tx.us/npzd/Austingo/bh_flum.pdf

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Chapter 4: Financing Rental Housing Rehab and Ongoing Affordability This portion of the Airport Blvd Corridor Report will detail the estimated costs of two separate development scenarios. Both scenarios focus on providing affordable housing to area residents. The first scenario is aimed at preserving the existing affordable housing stock. The Profile team’s findings determined that complexes with between 20 and130 units, built prior to 1980, and categorized as “Class C”, are priced in an affordable range. The second pro forma analysis will determine the cost to build a completely new structure, of the same scale, on the same site. This analysis attempts to provide financially feasible strategies for preserving the existing affordable housing stock within the corridor area. The comparison of remodel versus rebuild will be the main focus of each pro forma analysis.

PRO-FORMA BASICS A pro-forma, or “for the sake of form” in the Latin, takes on different meanings according to the field in which it is being used. In real estate finance it refers to a short-form method for determining financial results of a projected venture, usually before the fact. The methodology is intended to demonstrate the minimum costs associated with financing a project using a line item method. This method can--but is by no means required--to conform to generally accepted accounting principles (GAAP). Also, pro-formas may differ as their use varies dependent on the required method in practice. The diagram on the following page outlines the analysis used for this study.

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This diagram illustrates the process this analysis will follow. The ultimate goal of this study is to identify the financial gap between the two project cost scenarios (remodel vs. reconstruction). Using basic financial analysis, we will create a pro forma for each property analyzed in order to estimate the cost per unit of preserving an existing multifamily property. The process is divided into three main steps: ď&#x201A;ˇ

the first step is to create a pro forma based on the income and cost estimates of the two scenarios described to estimate the overall value of the investment as an operating real estate venture;

ď&#x201A;ˇ

the second step is to estimate the total loan amount required to fund the project based on the total net operating income generated by the new unit mix and affordable monthly rents, given current mortgage market conditions;

ď&#x201A;ˇ

the third step is to determine the difference between the total project cost and the amount and cost of debt required, as determined in the previous step. Here we determine the actual amount of extra financing or equity required to execute the project.

The results will help us to identify the financial feasiblility of each approach and which option (remodel or reconstruction) will be least expensive.

METHOD OF RESEARCH We relied on three primary sources of information to perform the financial analysis on our hypothetical project sites; interviews with professionals, online county tax data, and ground research on the study area provided the information to build the pro forma. The first step was to build a pro forma appropriate to an affordable housing project type. This research was gathered through interviews with three Austin-area real estate finance specialists. Each interviewee

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represents a different aspect of financing expertise within the affordable housing segment.1 Once the research was gathered, the team chose two separate properties along the corridor and developed two separate pro-formas for each of the properties. One pro-forma assessed the cost of retrofitting a property, while the other assessed the cost of constructing a new affordable property. Second, financial information, from the Travis County Appraisal District (TCAD), was used to populate certain line items of the pro forma. These items include the assessed value of the land and improvements (any built structure), total assessment, and the tax structure to estimate the annual property tax. The TCAD data also includes minor property characteristics such as building and lot square footage. Last, our colleagues on the Airport Blvd Profile team provided information on the affordable property sites within the corridor. This information was used to generate the average rent in the area for affordable units and to categorize the varying property characteristics in the study area. These three sources: interviews, TCAD data and ground research, allowed us to evaluate the existing financial conditions of certain properties and analyze hypothetical project scenarios for each. The following page diagrams the method used to research and gather the information necessary to generate the pro forma outputs.

Reference Appendix 1 â&#x20AC;&#x201C; This section details the interviews performed.

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COMPONENTS OF THE PRO-FORMA The pro-forma for this assessment is composed of items that reflect specific financial portions of the project. The sections of the pro forma include generating certain revenues and costs in order to then generate specific outputs that can be used to analysis the results of the data.

Operating Income: The credits portion of this section includes the total operating income that will be received through rent payments, and bad debt (i.e, arrears and late fees), which will usually be minimal because the total amount is speculative. It also includes income gained from lesser sources such as parking fees, and onsite laundry revenue. On the debits side, this section includes rent concessions (e.g.s., one time offers, discounts, etc.), vacancies (for which the Pro-Forma Team used a 7% vacancy rate assumption), fees related to credit collection on tenantsâ&#x20AC;&#x2122; bad debt, and court fees associated with eviction proceedings.

Operating Expenses: This includes any regular expenses minus costs of capital improvements (which are included in a separate section. Items include personnel expenses (salary, benefits if applicable, and petty cash), direct maintenance costs, utility concessions if applicable, added amenities to tenants (such as cable or internet), and building security (e.g.., lock replacement, security alarms).

Net Operating Income (NOI) before taxes: This section is usually comprised of a single line item, which is the net income minus expenses. This value represents gain (or loss, in the event that expenses outweigh income) of operating the property. An optional second line item is the previously mentioned CAP rate. The CAP rate is the NOI divided by the value of the property. The CAP rate is most Finance 6

useful when determining the value at which a property can be sold. The Pro Forma Team did calculate the CAP rates for their two example properties. However, it is important to note that this line item is of relatively little importance compared to other items in the pro-forma.

Capital Assets: This section outlines the total value of the property and appreciation accrued on the property, including the value of the land, the assessed value of the property, the total taxed amount (pooled across all five taxing authorities in Travis County) and the costs associated with capital improvements. In the case of a building remodel, these upgrades would be included in this section. Most of the information from this section came from the Travis County Appraisal District website. Maximum Loan Amount: The projectâ&#x20AC;&#x2122;s pro-forma NOI is the basis for determining the amount of money that is available to borrow from the lending institutions. Permament mortgages are calculated based on two common criteria: the debt coverage ratio (DCR) and the loan-to-value (LTV) ratio. For income producing properties, lenders typically look at both criteria and the maximum loan amount is the lesser of the resulting loan amounts calculated using the two methods. Gap Financing: This section outlines the â&#x20AC;&#x153;gapâ&#x20AC;? between the net operating income to the cost of capital improvements. Of all sections of the pro-forma it is perhaps the most crucial. It is generally understood upfront that the NOI may cover general operating expenses but will never cover capital improvement expenditures

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if an affordability requirement is in place. The Pro Forma Team took into account the stateâ&#x20AC;&#x2122;s statutes (which ban financing arrangements such as inclusionary zoning), the municipalityâ&#x20AC;&#x2122;s affordable housing coffer (i.e., its housing trust fund), which has traditionally had limited funds, and the fact that most zones in East Austin no longer qualify for LIHTC or New Market Tax Credits. However, beyond determining the total amount needed for gap financing, suggestions concerning the source and political feasibility of how to approach gap financing were not addressed since this fell within the purview of the Policy Recommendations Team and will be discussed in the final chapter of this report.

Unit Mix: This section details the number of units currently available for each property, what the rent should be per unit, based on an assessment of current property value and what could be charged for rent when taking into account desired income targets based on Area Median Income (AMI), 30% of AMI, 50% and 60%. The exact values that the team proposes for preferred and maximum rents are detailed in the following section.

PROPERTY SELECTION, ENHANCEMENTS AND ASSUMPTIONS The Pro-Forma Team chose two properties to assess using their pro-formas. Properties were selected due to their location within the corridor and location within the transition area between the single-family residential and commercial zones. These sites are highlighted because they, along with many others, provide the highest potential for redevelopment at a higher density with their proximity to Airport Blvd and physical property traits. These properties currently provide affordable rental rates to the area residents and are at risk for redevelopment due to their

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class C status. In order to mitigate the negative secondary effects2 of redevelopment this analysis will look at the cost to enhance the current conditions of existing affordable housing stock. Exterior enhancements will include minor changes that will work towards the common goals and characteristics encouraged in the proposed Form-Base Code for the Airport Blvd. Corridor. Example items would be landscaping and streetscape improvements. Interior improvements would be more substantial. We estimate that all apartments will require an investment of $50 per sq. ft. to make them compliant with Austin Energy standards. Upgrades will also include new flooring, paint, and necessary hardware and fixtures. For the reconstruction pro forma model, costs will be estimated to rebuild the property to be the exact same. The cost of demolition is not included in the pro forma model and the purchase price only includes the price of land, not the improvements. General assumptions for both project models will include the items listed in the table below. All the assumptions were determined through the interviews performed with affordable housing financial professionals.

Negative Secondary Effects: increased rental rates, housing displacement, school displacement Finance 9

PROPERTY A. 5211 EILERS AVENUE

The multi-family unit at 5211 Eilers Ave is a small apartment complex that maintains affordable rental prices within the Airport Blvd Corridor.3 The complex is located between the commercial activity of Airport Blvd and the calmer streets of single-family homes the surrounding neighborhood. It is a relatively small wedge of land, restricted on all sides. The property has 18 one-bedroom units priced below the â&#x20AC;&#x153;fair market rentâ&#x20AC;? for the region. This site is ideal for a remodel due to its small size, class C condition, and location. The relatively small lot size makes it less attractive for large-scale redevelopment. The below tables detail the building characteristics and property financials. The financial data is used in the pro forma to determine the overall purchase price of the property for the reconstruction model.

Airport Blvd Profile team ground research Finance 10

PRO FORMA ANALYSIS â&#x20AC;&#x201C; 5211 EILERS AVE We first calculated the purchase price based on the capacity of this property to generate income. The existing property generates a NOI after capital reserves of $53,174. The estimated remodel project cost totals approximately $1.2 million, which includes around $480,000 of remodeling costs. On the other hand, the cost of the land resulting from fractioning the assessed land value obtained from TCAD by the purchase price and the TCAD appraisals is $262,430, which represents 20% of the overall cost of the development. When looking at the cost per unit, the $54,698 resulting from the remodel scenario is substantially lower than for the new construction scenario of $61,040. Once leveraged, this difference increases relative to the total equity required to fill the financial gap. The maximum loan amount is $990,000, and the overall final gap of the project for the remodel scenario and the new construction scenario are $212,993 and $352,517 respectively. Thus, the remodel cost is almost 40% lower than the new construction cost. The financial gap per unit for the remodel scenario is $9,681 and the price per square foot is $112. These numbers show the significant difference between the two, favoring the remodel approach over the new construction as a real opportunity to save resources and increase the effectiveness of the local initiatives. Because this property has depreciated substantially, it has a lot price tag, offering a good opportunity to purchase and upgrade it, while maintaining affordability.

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PROPERTY B. 1020 EAST 45TH ST.

The multi-family property at 1020 East 45th St is a large apartment complex that maintains affordable rental prices within the Airport Blvd Corridor.4 The complex is located on the south end of the corridor, between the commercial activity of Airport Blvd and several other similar style multi-family complexes. This small area of multi-family housing abuts a singlefamily residential neighborhood. The property has 127 units priced at and below the fair market rent for the metropolitan area. This site is ideal for a remodel due to its age and location. The tables below details the buildingâ&#x20AC;&#x2122;s characteristics and property financials. The financial data is used in the pro forma to determine the overall purchase price of the property for the reconstruction model.

Airport Blvd Profile team ground research Finance 12

PRO FORMA ANALYSIS - 1020 E. 45TH ST The existing property generates a NOI after capital reserves of $805,588. In this case, the remodel project cost totals approximately $16.6 million, which includes $5.7 million for remodeling costs and $10.75 million to purchase the property. Likewise, the cost of the land resulting from fractioning the assessed land value obtained from TCAD by the purchase price and the TCAD appraisals is $4.13 million, which represents nearly 25% of the overall cost of the development cost. When looking at the cost per unit, the $130,595 resulting from the remodel scenario is slightly lower than for the new construction scenario of $133,650. The maximum loan amount is $8.04 million based on a new NOI of $611,225. When leveraged, the financial gap of the project for the remodel scenario and the new construction scenario are $8,543,436 and $8,931,139 respectively. As in the previous analysis, the remodel cost is also lower than the new construction cost, but in this case only by 4.34%. The financial gap per unit for the remodel scenario is $67,271 and the price per square foot is a bit higher than $130.

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RECOMMENDATIONS AND CONSIDERATIONS Based on this comparative analysis of two types of properties in the Airport Boulevard area, preservation of existing affordable rental housing appears to be both financially feasible and also more cost effective than construction of new housing of similar size. This is an important finding for several reasons. First, in central core neighborhoods, where open land is rare, and existing neighborhood plans emphasize compatibility with existing neighborhood scale, the proper comparison is between remodeling existing properties and building at the same scale. These size limitations work against new construction of affordable housing, where economies of scale are particularly important and where size is rewarded in subsidy programs such as the federal Low Income Housing Tax Credit. Another point revealed in our comparison relates to the difference in the amount of subsidy per unit required to produce affordable housing through rehabilitation at our two properties. This difference is due to the existing physical conditions of the properties analyzed. The fact that one of these properties was recently remodeled means that the purchase price per unit was much higher.. Since buyers purchasing will be assessing the value of properties in order to finance them based on the income produced by their rent roles (i.e., using the income approach to valuation), older properties, with offer the best value. Of course, the condition of the property will also be important and we did not have access to specific information on these properties. However, to the extent that properties can be identified before corridor investments spur an increase in land prices, the benefits of the low purchase price can be transferred to low income residents. Absent specific information on the condition of the buildings, we used the same cost per square foot for renovation. If the costs were indeed lower for the more recently renovated property, that could narrow the gap between the costs of remodeling and renovation.

Finance 14

However, the difference between the cost per unit of the older and newer properties was substantial and it is likely that the older property would still be the better investment. In sum, the best approach is to find properties offered at low prices that are already serving as a source of (unsubsidized) affordable housing in the corridor area. This will be the most cost efficient use of scarce public funds, allowing creation of long term affordable housing at the lowest subsidy cost per unit. At the same time, because we lacked more detailed information on the condition of the properties, this study was exploratory and we think additional work will be required to confirm our findings and explore the implications for housing and planning policy. We recommend the following ideas for further study:

1. In-depth Housing Study - The groundwork performed by the Profile team has laid the foundation for a more thorough and comprehensive analysis of area characteristics, data and preferences. An important item not included in this study was the average cost of utilities per unit in area buildings. The class was not able to communicate with Austin Energy officials nor find applicable data to enrich our study. For future reports it is highly recommended that the city facilitate efforts to gather such data. 2. Explore Incentives for small complex property owners â&#x20AC;&#x201C; we recommend that the city explore creation of a program to target smaller property owners (complexes with 5-25 units) and provide financial funding to encourage existing owners to upgrade interior and exterior sites. This would facilitate energy upgrades and creation of affordable housing for owners who cannot borrow sufficient funds to upgrade their buildings under current market conditions. It would also allow current non-conforming sites to meet new form-based code standards. Specific guidelines should outline qualifying characteristics and long-term commitments to affordability.

Finance 15

3. Identify and Alleviate the common issues presented in remodel projects - Though it is more cost effective and financially viable to remodel existing units, it is typically more difficult to execute such projects. Retrofitting an existing property demands a deeper and detailed initial evaluation and it is much harder to estimate the final costs. Older properties tend to have code compliance issues, which make them much less attractive to remodel, and thus savvy developers typically lean towards a clean slate with the new construction approach. We recommend further study and development of strategies to address common problems with remodels of building types and ages typical of corridor areas. The opportunities that this approach creates are vast, and go beyond the economics. This corridor project should strive to go beyond current practices in preserving affordable housing to improve housing affordability in the city. We invite city officials, advocates, neighborhoods, and developers to take a different approach, celebrating the value of preserving, while improving existing communities.

Finance 16

Appendix 4-1 INTERVIEWS â&#x20AC;&#x201C; AFFORDABLE HOUSING FINANCE SPECIALISTS To assess the most important components included in the project pro-forma three specialists in the Austin community were interviewed: Dave Fournier of Apartment Realty Advisors, Sarah Andre of S2A Development Consulting, and Walter Moreau with Foundation Communities. This section will outline the interviews and discuss the differences among the approaches they took to developing pro formas. Dave Fournier is one of two national representatives for the Apartment Realty Advisors (ARA) Affordable Housing Division. This division is responsible for property advising for low-income properties financed through Low Income Housing Tax Credits (LIHTC), tax exempt bonds (both revenue and general obligation based) and HUD subsidized programs.5 Because ARA is a brokerage firm, there is an inherent motivation for ARA to profit from transactions of affordable housing property sales, which informs both their use of pro-formas as well as the line items that are included in these proformas, such as their emphasis on the capitalization (CAP) rate.

Sarah Andre is a principal consultant at S2A Consulting, an affordable housing consulting firm in Austin, TX. She is responsible for financial analysis and pro-forma development for affordable residential properties.6 Her expertise lies in developing different strategies for setting property values (e.g.s., valuation method, income-based method, and comparable price method) and how these methods inform the dollar amount included in every line-item of the real estate pro-forma.

5 6

http://www.arausa.com/affordablehousing/ http://www.s2adevelopment.com/aboutus.htm Finance 17

Walter Moreau is the Executive Director of Foundation Communities, an Austinbased non-profit that partners with housing financiers to provide low-income individuals and families in the Austin community with affordable housing as well as tax preparation.7 His use of pro-formas typically involves preparing them for LIHTC awarding applications. Because he represents a non-profit and does not intend to sell properties at a profit, pro-formas originating from Foundation Communities typically donâ&#x20AC;&#x2122;t involve aspects of the actual property value or appreciation, such as the aforementioned CAP rate.

http://www.foundcom.org/about-us/ Finance 18

Appendix 4-2 – 5211 Eilers – Remodel Pro Forma A Appendix 4-3 – 1020 E. 45th St. – Remodel Pro Forma B

Finance 19

5211 Eilers Avenue

TCAD Rent Z estimateEst Mortgage Sq. Ft. Lot Size Year Built Prop Tax 2011 Units $ 692,640.00 773-1958 3,136.00 10,656.00 17,092.00 1,958.00 17,035.00

Land Value

256,380.00

Improvements Value

436,260.00

Assessed Value

692,640.00

Surveyor Corey

Occupancy Properties Rate 5211 Eilers Avenue Austin, Tx 100%

Airport Boulevard Area

Total # of Effiencies, # of Efficiencies unit Effiencies Units units Size (sf) Rent/month 18 1 400 $ 635.00

96%

14.2

1 BR unit Size 1 BR (sf) Rent/month Varies $ 800.00

1 BR, # of units property AB area

19.3

21.27

670 $

3 BR unit Size (sf)

3 BR, # of units

Sale Price

574.89 $

3 BR Rent/month

property

1100 $

AB area

1100 $

400.00 $

Sale Price

526.50 $

44,000.00

2 BR unit Size 2 BR 2 BR, # of units (sf) Rent/month 53 Varies $ 1,090.00

116,500.00

948

709.38 $

Sale Price

1,535.00 1,817.50 $

139,500.00

Existing Unit Mix AMI/BDR 30% 1 BDR (1.5 people)

750

Total Area -

50% 1 BDR (1.5 people)

665

665 $

750

60% 1 BDR (1.5 people)

855

855 $

750

575

12,650

750

16,500

85%

30% 2 BDR (3 people)

512

512 $

900

50% 2 BDR (3 people)

855

855 $

900

60% 2 BDR (3 people) Mkt Rate 2 BDR

$ $

1,026 -

$ $

1,026 $ $

900 900

0% 0%

30% 3 BDR (4.5 people)

512

512 $

1,200

50% 3 BDR (4.5 people) 60% 3 BDR (4.5 people)

$ $

855 1,026

$ $

855 $ 1,026 $

1,200 1,200

0% 0%

Mkt Rate 1 BDR

No. Units

Max Rent Proposed Rent Monthly Rent $ 426 $ 426 $ -

Area Sq. Ft

Sale Price 215,000

Mkt Rate 3 BDR

22 Gross Potential Income

12,650

1,200

16,500

151,800

90.22% Vacancy (5%)

7,590.00

Bad Debt (1-2%)

3,036.00

2.00%

Other Income Effective Gross Income

141,174.00

Cap Rate

7.5%

Income Approach. Adquisition and Remodeling Budget Purchase Price

Total

Per Unit

Per $/Sq. Ft

0.715600216

Dev. Budget

Total

Per Unit

Per Sq. Ft

495,653 $

19,064 $

1.39742831 Land Cost

183,466

8,339.34 $

2,293

15%

Assessed Value $ Remodeling Costs 50 $/Sq Ft$

692,640 $ 479,520 $

26,640 $ 18,443 $

36 $ 50 $

-0.40 Total Hard Costs 154,487.33 Total Dev Budget 183,465.58 Total Cost of New Building Construction

$ $

852,480 1,065,600

32,787.69 $ 48,436.36 $

80 100

68% 85%

1,249,066

48,040.98 $

Highest and Best Use Cost Analysis $/Sq Ft. Total Adquisition and Remodeling Budget $ 975,173 Total Cost of New Building Construction $ 1,249,066

37,506.67 $

48,040.98 $

Total Income Approach Total Assessed Value

$ $

975,173 1,172,160

37,506.67 $ 45,083.08 $

Expenses per Unit

Annual Expenses

Capital Reserve Replacement $ Total Annual Expenses per unit $ Total Annual Expenses $ Total Annual Expenses Cap Reserve $ Net Operating Income (NOI)$ NOI after Capital Reserve $ Estimate Value

3,750

250 4,000 82,500 104,000 58,674 37,174 495,653.33 NOI/Cap Rate

59 60

Gap between Option 1 and 2 $ (273,892) $ (10,534) $ (5) According to this model the replacing costs are lower than the remoling costs and acquisition costs -28%

Amortization Period (yrs) Interest Rate Conventional

30 4.50%

1.25

DCR Monthly debt service payment $

2,478

Annual debt service payment $

29,739

Loan Amount

489,114

75%

LTV Amortization Period (yrs)

Total Equity

122,278

Cost Project

611,392

Purchase Price+Remodeling $Cost Equity required $ Total Equity per Unit

1,249,066 759,952

1.10

Average Floor Area per unit Sq Ft Equity per Sft

Sq. Ft 1 BDR (1.5 people) 2 BDR (3 people) 3 BDR (4.5 people)

Equity per unit 750 $ 695.51 900 $ 834.62 1200 $ 1,112.82

AMI/BDR 30% 1 BDR (1.5 people) 50% 1 BDR (1.5 people) 60% 1 BDR (1.5 people)

New Unit Mix Max Rent Proposed Rent Monthly Rent $ 426 $ 426 $ 2,556 $ 665 $ 665 $ 13,300 $ 855 $ 855 $ -

No. Units 6 20 0

Mkt Rate 1 BDR

N/A

Area Sq. Ft 750 750 750

Total Area 4,500 15,000 -

Unit Mix Rate 23% 77% 0%

575 $

750

30% 2 BDR (3 people)

512

512 $

900

23%

50% 2 BDR (3 people) 60% 2 BDR (3 people) Mkt Rate 2 BDR

$ $

855 1,026 N/A

$ $ $

855 $ 1,026 $ 1,090 $

900 900 900

0% 0% 0%

77% 0% 0%

30% 3 BDR (4.5 people)

512

512 $

1,200

50% 3 BDR (4.5 people) 60% 3 BDR (4.5 people) Mkt Rate 3 BDR

$ $

855 1,026 N/A

$ $ $

855 $ 1,026 $ $

1,200 1,200

0% 0%

26 Gross Potential Income

Vacancy (5%) Bad Debt (1-2%) Other Income Effective Gross Income Cap Rate

5.0% 190,272 9,513.60 3,805.44

176,952.96 7.5%

Expenses per Unit Amortization Period (yrs) Interest Rate Conventional DCR Monthly debt service payment $ Annual debt service payment $ Loan Amount $ LTV

5% 2.00%

30 4.50%

1.25 4,864 58,362 959,872

75%

15,856

19,500

Amortization Period (yrs) Total Equity $ Cost Project $ Purchase Price+Remodeling $Cost Equity required $ Total Equity per Unit $ Average Floor Area per unit Sq Ft Equity per Sft $ 1 BDR (1.5 people) 2 BDR (3 people) 3 BDR (4.5 people)

30 239,968

1,199,840 975,173 15,301 588.51 750.00 0.93 Equity per unit $ 695.51 $ 834.62 $ 1,112.82

Sq. Ft 750 900 1200

Price/ Cap Rate Net Operating Income (NOI) $ Cap Rate Range Going-in Purchase Price Purchase Price Per Unit

Medium Low $ 37,174.00 7% 7.50% 8% $ 531,057.14 $ 495,653.33 $ 464,675.00 $ 24,138.96 $ 22,529.70 $ 21,121.59

Cap Exp. Remodeling Cost Cap Exp. Remodeling Cost per Unit

All-in Cost Lender Fees (1.5%) Total All-in Cost

High

1.50%

Net Operating Income NewDCS Unit Mix (NOI) $

New Debt Serv. Amount Total Equity Equity per Sft

Average Equity per Unit 1 BDR (1.5 people) 2 BDR (3 people) 3 BDR (4.5 people)

750.00 750 900 1200

479,520 $ 479,520 $ 479,520 21,796 $ 21,796.36 $ 21,796.36 1,010,577 $ 975,173.33 $ 944,195.00 $ 14,398.08 1,024,975 $ 989,571.41 $ 958,593.08 $ 72,953 $ 959,872 65,103 $ 29,699.36 $ 6 $ 2.79 $ 2,959 $ 1,349.97 $ 4,582 $ 5,499 $ 7,331 $

2,090.33 $ 2,508.39 $ 3,344.52 $

-1,278.97 -0.12 -58.13 -90.02 -108.02 -144.03

New Construction Land Cost Total Hard Costs Total Dev All-inBudget Cost of New Construction

$ $ $ $

183,466 852,480 1,065,600 1,263,464

New Debt Serv. Amount $ Total Equity $

959,872 303,592

Equity per Sft

Average Equity per Unit $

13,799.62 750 $ 13,799.62 900 $ 16,559.54 1200 $ 22,079.39

1 BDR (1.5 people) 2 BDR (3 people) 3 BDR (4.5 people)

Remodel vs Replace

$ 13,799.62 $ 13,799.62 $ 16,559.54 $ 16,559.54 $ 22,079.39 $ 22,079.39

Total

Financial Gap Per Unit Unleveraged costTotal Cost per Unit Total Cost per Unit

Total Equity for Remodel $ 29,699.36 $ 1,349.97 $ 989,571.41 $ 44,980.52 $ Total Equity for New Construction $ 303,591.61 $ 13,799.62 $ 1,263,464 $ 57,430.17 $ Remodeling EquityNew Contruct. Equity $ -273,892.25 $ -12,449.65 $ (273,892) Savings 90.22%

92.87 118.57

484.36 484.36

4520 Bennett Avenue Austin, Tx Surveyor Occupancy Rate Total # of Units Effiencies, of units Efficiencies#unit Size (sf) Effiencies Rent/month Sale Price 1 BR, # of units Efficiencies unit Size

Andrea 100% 40

N/A N/A N/A

(sf) Effiencies Rent/month Sale Price 1 BR, # of units

N/A

1 BR unit Size (sf) 1 BR Rent/month

N/A

2 BR, # of units 2 BR unit Size (sf)

N/A

2 BR Rent/month Sale Price

Market Rate

3 BR, # of units 3 BR unit Size (sf) 3 BR Rent/month Sale Price

NOTES

N/A 36

N/A Market Rate Condos for Sale

4520 Bennett Avenue Austin, Tx Surveyor Andrea

TCAD

Occupancy Rate

100%

Rent Z estimate

Total # of Units Effiencies, # of units Efficiencies unit Size (sf) Effiencies Rent/month Sale Price

1 BR, # of units Efficiencies unit Size (sf) Effiencies Rent/month Sale Price 1 BR, # of units 1 BR unit Size (sf) 1 BR Rent/month

4520 Bennett Avenue Austin, Tx $ 2,202,992.00

Est Mortgage

N/A

Sq. Ft.

25,034.00

N/A

Lot Size

37,500.00

N/A

Year Built Prop Tax 2011

1,971.00 55,462.00

Units 40

N/A

Lot Size

37,500.00

N/A

Year Built Prop Tax 2011

1,971.00 55,462.00

Units 40

N/A

land value Improvement

937,500.00 1,265,492.00

1020 45Th St. E. Land Value Improvements Value Assessed Value Surveyor Corey Airport Boulevard Area

TCAD Rent Z estimate $ 8,263,816.00 $ $

Sq. Ft. Lot Size Year Built 127,195.00 2.92 1964

3,179,875.00 5,083,941.00 8,263,816.00

PropTax 2011 55,462.00

Occupancy Rate Total # of Units 100% 127 96% 19.3

3 BR, # of units property AB area

1 2

AMI/BDR 30% 1 BDR (1.5 people) 50% 1 BDR (1.5 people) 60% 1 BDR (1.5 people) Mkt Rate 1 BDR 30% 2 BDR (3 people) 50% 2 BDR (3 people) 60% 2 BDR (3 people) Mkt Rate 2 BDR 30% 3 BDR (4.5 people) 50% 3 BDR (4.5 people) 60% 3 BDR (4.5 people) Mkt Rate 3 BDR

No. Units

1 74 $

18,420 921.00 368.40

Units land value Improvement 127 937,500.00 1,265,492.00

Effiencies, # of Efficiencies units unit Size (sf) 1 400 14.2 400.00 2 BR, # of 1 BR, # of units 1 BR unit Size (sf) 1 BR Rent/month Sale Price units 72 Varies $ 800.00 53 21.27272727 670 $ 574.89 $ 116,500.00 11.90909091

Properties 1020 45Th St. E.

property AB area

Gross Potential Income Vacancy (5%) Bad Debt (1-2%) Other Income Effective Gross Income Cap Rate

Est Mortgage

3 BR unit Size (sf) 3 BR Rent/month 1100 $ 1,535.00 1100 $ 1,817.50 Existing Unit Mix Max Rent Proposed Rent $ 426 $ 426 $ 665 $ 665 $ 855 $ 855 $ $ $ 512 $ 512 $ 855 $ 855 $ 1,026 $ 1,026 $ $ $ 512 $ 512 $ 855 $ 855 $ 1,026 $ 1,026 $ 1,535 $ 1,535

5% 2.00%

17,130.60 7.5%

Effiencies 1 BR, # of Rent/month Sale Price units $ 635.00 72 $ 526.50 $ 44,000.00 21.27 2 BR unit Size 2 BR (sf) Rent/month Sale Price Varies $ 1,090.00 948 $ 709.38 $ 215,000

Sale Price $ 139,500.00 Monthly Rent $ $ $ $ $ $ $ $ $ $ $ $ 1,535 $ 1,535

Area Sq. Ft 750 750 750 750 900 900 900 900 1,200 1,200 1,200 1,200

Total Area 54,750 1,200 55,950

0% 0% 0% 57% 0% 0% 0% 0% 0% 0% 0% 1%

Income Approach. Adquisition and Remodeling Budget Purchase Price $ Assessed Value $ Remodeling Costs 50 $/Sq Ft $

Total (6,544,925) $ 8,263,816 $ 5,723,775 $

Per Unit Per $/Sq. Ft (51,535) $ (63) 65,069 $ 80 45,069 $ 50

-0.79 New Construction Budget Total -1.26 Land Cost $ (2,518,454) 2.26 Total Hard Costs$ 8,292,000 10374754.08 Total Dev Budget $ 12,719,500

Total Cost of New Building -2518454.48 Construction Total Income Approach Total Assessed Value

$ $

Expenses per Unit Annual Expenses $ Capital Reserve Replacement $ Total Annual Expenses per unit $

Total Annual Expenses Total Annual Expenses Cap Reserve Net Operating Income (NOI) NOI after Capital Reserve Estimate Value Amortization Period (yrs) Interest Rate Conventional DCR Monthly debt service payment Annual debt service payment Loan Amount LTV Amortization Period (yrs) Total Equity Cost Project Purchase Price+Remodeling Equity required Total Equity per Unit

$ $ $ $

$ $ $

$ $ $ $ $

(821,150) 13,987,591

3,750 250 4,000

277,500 508,000 (260,369) (490,869) -6,544,925.33 30 4.50% 1.25 (32,725) (392,696) (6,458,570) 75% 30 (1,614,643) (8,073,213) 10,201,046 16,659,616 2.02

-6,465.75 $ 110,138.51 $

$ 10,201,046

Per Unit Per Sq. Ft -34,033.17 $ (31,481) 65,291.34 $ 80 171,885.14 $ 100

80,323.19 $

(15) 135 Highest and Best Cost Use$/Sq Analysis Ft. Total Adquisition$ and(821,150) Remodeling Budget -6,465.75 $ Total Cost of New $ Building 10,201,046 Construction 80,323.19 $

(15) 98

Gap between Option 1 and 2 (11,022,196) $ (86,789) $ (113) According to this model the replacing costs are lower than the remoling costs and acquisition costs 1342%

-25% 81% 125%

100%

Average Floor Area per unit Sq Ft Equity per Sft Sq. Ft 1 BDR (1.5 people) 2 BDR (3 people) 3 BDR (4.5 people)

AMI/BDR 30% 1 BDR (1.5 people) 50% 1 BDR (1.5 people) 60% 1 BDR (1.5 people) Mkt Rate 1 BDR 30% 2 BDR (3 people) 50% 2 BDR (3 people) 60% 2 BDR (3 people) Mkt Rate 2 BDR

No. Units 12 12 49

$ $ $

13 20 20

$ $ $

New Unit Mix Max Rent Proposed Rent 426 $ 426 665 $ 665 855 $ 855 N/A $ 800

$ $ $

Effective Gross Income Cap Rate

$ $ $ $

6,656 17,100 20,520 -

900 900 900 900

11,700 18,000 18,000 -

10% 16% 16% 0%

512 855 1,026

$ $ $ $

512 855 1,026 -

$ $ $ $ $

1,026 100,289

1,200 1,200 1,200

1,200

0% 0% 1%

Expenses per Unit Annual Expenses $ Capital Reserve Replacement $ Total Annual Expenses per unit $ Total Annual Expenses $ Total Annual Expenses Cap Reserve $ Net Operating Income (NOI) $ NOI after Capital Reserve $

5% 2.00%

7.5%

3,750 250 4,000 476,250 508,000 642,975 611,225

Total Area Unit Mix Rate 9,000 9% 9,000 9% 36,750 39% 0%

512 855 1,026 1,090

5.0%

1,119,225.24

Area Sq. Ft 750 750 750 750

$ $ $ $

N/A 127 1,203,468 60,173.40 24,069.36

Monthly Rent $ 5,112 $ 7,980 $ 41,895 $ -

512 855 1,026 N/A

30% 3 BDR (4.5 people) 50% 3 BDR (4.5 people) 60% 3 BDR (4.5 people) Mkt Rate 3 BDR Gross Potential Income Vacancy (5%) Bad Debt (1-2%) Other Income

Equity per unit 750 $ -118,810.88 900 $ -142,573.06 1200 $ -190,097.41

20% 25% 54%

30%MFI 50%MFI 60%MFI

103,650

Amortization Period (yrs) Interest Rate Conventional DCR Monthly debt service payment Annual debt service payment Loan Amount LTV Amortization Period (yrs) Total Equity Cost Project

$ $ $

$ $

30 4.50% 1.25 40,748 488,980 8,042,141 75% 30 2,010,535 10,052,677

Purchase Price+Remodeling Cost$ (821,150) Equity required $ (8,863,292) Total Equity per Unit $ -69,789.70 Average Floor Area per unit Sq Ft 756.08 Equity per Sft $ -158.41 Equity per unit 1 BDR (1.5 people) $ -118,810.88 2 BDR (3 people) $ -142,573.06 3 BDR (4.5 people) $ -190,097.41 Price/ Cap Rate Net Operating Income (NOI) $ Cap Rate Range Going-in Purchase Price Purchase Price Per Unit Cap Exp. Remodeling Cost Cap Exp. Remodeling Cost per Unit All-in Cost Lender Fees (1.5%) Total All-in Cost

Sq. Ft 750 900 1200 High Medium -490,869.40 $ -490,869.40 7% 7.50% $ -7,012,420.00 $ -6,544,925.33 $ -94,762.43 $ -88,444.94 $

$ 5,723,775 $ $ 77,348.31 $ $ -1,288,645.00 $ 1.50% $ $ -1,168,012.88 $

5,723,775 77,348.31 -821,150.33 120,632.12 -700,518.21

Net Operating Income New Unit Mix (NOI) $ $ 611,225 New Debt Serv. Amount $ 8,042,141 Total Equity $ -9,210,154.33 $ -8,742,659.66 Equity per Sft $ -72.41 $ -68.73 Average Equity per Unit 756.08 $ -124,461.55 $ -118,144.05

Low -490869.40 0.08 -6135867.50 -82917.13 5723775.00 77348.31 -412092.50 -291460.38

-8333601.83 -65.52 -112616.24

1 BDR (1.5 people) 2 BDR (3 people) 3 BDR (4.5 people) New Construction Land Cost Total Hard Costs Total Dev Budget Total All-in Cost of New Construction New Debt Serv. Amount Total Equity Equity per Sft Average Equity per Unit 1 BDR (1.5 people) 2 BDR (3 people) 3 BDR (4.5 people)

750 $ 900 $ 1200 $

$ $ $

(2,518,454) 8,292,000 12,719,500

$ $ $ $ $

10,321,678 8,042,141 2,279,536 41 30,804.54 750 $ 900 $ 1200 $

-54,307.29 $ -65,168.75 $ -86,891.66 $

30,556.79 $ 36,668.14 $ 48,890.86 $

-51,550.73 $ -49,138.73 -61,860.87 $ -58,966.48 -82,481.16 $ -78,621.98

30,556.79 $ 36,668.14 $ 48,890.86 $

30,556.79 36,668.14 48,890.86

Financial Gap Per Remodel vs Replace Total Unit Unleveraged costTotal Cost per Unit Total Cost per Unit Total Equity for Remodel $ -8,742,659.66 $ -118,144.05 $ -700,518.21 $ -9,466.46 $ -5.51 Total Equity for New Construction $ 2,279,536.19 $ 30,804.54 $ 10,321,678 $ 139,482.13 $ 81.15 Remodeling Equity-New Contruct. Equity $ -11,022,195.85 $ -148,948.59 483.53% Savings

1,718.85 1,718.85

4520 Bennett Avenue Austin, Tx Surveyor Andrea Occupancy Rate Total # of Units Effiencies, # of units Efficiencies unit Size (sf) Effiencies Rent/month Sale Price 1 BR, # of units Efficiencies unit Size (sf) Effiencies Rent/month Sale Price 1 BR, # of units 1 BR unit Size (sf) 1 BR Rent/month 2 BR, # of units 2 BR unit Size (sf) 2 BR Rent/month Sale Price 3 BR, # of units 3 BR unit Size (sf) 3 BR Rent/month Sale Price NOTES

100% 40 N/A N/A N/A 36 N/A N/A 36 N/A

3 N/A

Market Rate 1 N/A Market Rate Condos for Sale

Properties Occupancy Rate Total # of Units

1020 45Th St. E. 100%

96%

127

19.3

4520 Bennett Avenue Austin, Tx Surveyor Andrea Occupancy Rate 100% Total # of Units 40 Effiencies, # of units N/A

4520 Bennett Avenue Austin, Tx TCAD $ 2,202,992.00 Rent Z estimate Est Mortgage Sq. Ft. 25,034.00

Efficiencies unit Size (sf) Effiencies Rent/month Sale Price 1 BR, # of units

N/A N/A

Lot Size Year Built Prop Tax 2011 Units 40

37,500.00 1,971.00 55,462.00

Efficiencies unit Size (sf) Effiencies Rent/month Sale Price 1 BR, # of units 1 BR unit Size (sf) 1 BR Rent/month

N/A N/A

Lot Size Year Built Prop Tax 2011 Units 40 land value Improvement

37,500.00 1,971.00 55,462.00

36 N/A

937,500.00 1,265,492.00

Chapter 5: Policy Options for Moving Forward Back to the Basics: Maintaining Affordability As has been clearly articulated throughout this study, there is a critical need to maintain affordable housing in the Upper Airport Boulevard area. Austin citizens have also identified maintaining the diversity and equity of neighborhoods as a priority throughout its Imagine Austin comprehensive planning process. As stated in the draft Imagine Austin plan, the need to maintain affordability is coupled with the need amenities linked by easy transit mechanisms. An affordable community can only exist if we make sure that the people who work in Austin can afford to live here. Through incentives and partnerships, the City of Austin can encourage that more affordable housing be distributed throughout the city. New mixed-use areas need to have attainably priced housing, provide shopping and services, be walkable and bikable, and linked by transit to jobs and other centers, so residents can choose whether or not to incur the costs of owning a car. Healthy communities depend on easy, safe access to walking, biking, and recreation, healthy and nutritious food, quality healthcare, schools, police, and other community services. We can strive to deliver high public value for city taxes and maintain low-cost amenities that all Austinites can enjoy.1 The Imagine Austin Comprehensive Plan will shape the next decades of Austin’s development initiatives. Two of the plan’s six “key challenges and opportunities” deal specifically with maintaining housing affordability for a growing population. Throughout the public participation period of the plan’s creation, Austinites have been asking, “how will we keep Austin healthy, safe, beautiful, and affordable?”2 Finding a balance between economic growth and development and preserving affordability is a key challenge for many high-growth cities, but is particularly challenging for cities in Texas because of many state-imposed restrictions. Texas’ ban on inclusionary zoning, for example, is seen by many to be a key hindrance to a city’s ability to ensure that new development projects include affordable housing options. Austin has more “carrots” than “sticks” when it comes to ensuring new affordable housing development, especially in high-growth areas or Transit Oriented Development corridors, like Airport Boulevard. This is a unique moment for the city to be readdressing the issue of affordability. The Imagine Austin Plan has brought the issue to the forefront, while many of the city council candidates for the upcoming 2012 municipal election have named maintaining affordability as a key platform issue. A recently released study of East Austin gentrification trends found displacement rates of long-time homeowners to be between 32% and 42%.3 Additionally, Austin’s existing pool of financial resources for new affordable housing projects is drying up in a big way. There have been no new allocations to the Affordable Housing Trust Fund since 2008 (See Table 1), federal funding cuts have resulted in a nearly 40% drop in Community Development Block Grants and HOME grants, and the funds for affordable housing from the $55 million 2005 bond package have all officially been allocated. Without a recommitment of resources to address the need for affordable housing in Austin, particularly in regions where redevelopment plans are being pursued, like Upper Airport Boulevard, the problem will only continue to worsen. Austin is blessed with an abundance of developers and individuals looking to make investments in our community, which has contributed to the incredible prosperity of the city. Austin is also rich in affordable

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housing advocates, such as Foundation Communities, HousingWorks, and a number of successful community development corporations (CDCs). Unlike many other progressive cities, however, Austin suffers from a lack of diverse funding options to help these organizations mitigate the loss of affordable housing in high-growth areas. While Austin has a designated funding source in the Affordable Housing Trust Fund, this pool is relatively shallow (only $350,000 currently) compared to the breadth and depth of funding found in other cities. Using strategies that have been tested in other municipalities (while keeping the unique political landscape of Austin in mind), we propose several policy options that the City could initiate in order to address long-term affordability in redevelopment corridors. Table 1: Austin Affordable Housing Trust Fund4 FY Transfers Appropriation 2001 $1,000,000 2002 $100,000 $1,000,000 2003 $100,000 $1,000,000 2004 $$800,000 2005 $139,051 $1,000,000 2006 $90,474 $1,000,000 2007 $116,693 $1,000,000 2008 $177,280 $1,000,000 2009 $202,624 $2010 $281,247 $2011 $350,248 $-

Corridors: Redevelopment’s Newest Planning Units The concept of corridor redevelopment has become increasingly popular for high-growth cities in the past few decades. The history of the development of the corridor movement is beyond the scope of this particular study, but it is clear that the concept of connectivity-through-transit is important in many redevelopment plans. The Imagine Austin Comprehensive Plan uses “corridor” nearly 100 times throughout its final report; it is the primary planning unit used to describe future development. Transit is intimately connected to corridor planning, of course. Federal, state, and local governments invest in new transit to improve regional accessibility for residents, businesses, and visitors alike; to reduce traffic congestion; to curb greenhouse gas emissions; and to revitalize neighborhoods.5 In the Twin Cities, Minnesota, for example, the Corridors of Opportunity initiative is driving the city’s transit and redevelopment priorities.6 “Transitway corridors will guide our region’s growth, vitality and competitiveness. Development along transitways will create distinct places and strengthen local assets while increasing ridership and expanding access to jobs, affordable housing, and essential services for residents of all incomes and backgrounds.”7 The CoO is funded with a package of loans and grants from the U.S. Department of Housing and Urban Development and Living Cities, a collaboration of 22 large foundations and financial institutions that is funding four similar initiatives in other cities as part of a pilot study.8 The Twin Cities, then, have identified seven corridors from within the existing and planned

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system of transitways. The construction of new light rail systems along these corridors is a “gamechanger” and has spurred new initiatives, like CoO, one of the primary goals of which is the preservation of affordability.9 The City of Dallas does not define corridors explicitly, but the Lancaster, Skillman and Vickery Meadow transit oriented development corridors all centered on promoting mixed-use, denser, transit-oriented development near Dallas Area Rapid Transit (DART) lines.10 The Skillman Corridor Tax Increment Financing District was meant to create a more sustainable mix of rental and owner-occupied residential property while providing a model for redeveloping urban corridors to take full advantage of the DART light rail system.11 The Vickery Meadow Tax Increment Financing District was also meant to serve as a model for redeveloping “urban corridors that take advantage of the DART rail system" while promoting transit oriented development and implementing context sensitive design standards.12 All of these projects included provisions for development or maintenance of affordable housing. In Chicago, transit is increasingly viewed as a desirable amenity to upgrade urban neighborhoods. Enhancing mobility and increasing access to jobs has become a preference and a priority for this city to ensure economic vitality. One way of achieving such purposes has been through dense and mixed-use corridors, which are seen as more vital and sustainable. Some of the components of these corridors include diverse modes of transportation, a focus on accessibility and connectivity, sufficient public spaces, infill and redevelopment. Location efficiency, which looks at the relationship between urban form, housing site selection and transportation costs, has been incorporated into these developments as well. The city recognizes, however, that Transit Oriented Development has led to gentrification in the past. Furthermore, through gentrification, public transit use declines in a significant number of cases. Thus, Chicago has included affordable housing considerations in their TOD and redevelopment plans to avoid segregation, sprawl, automobile use, diminished productivity, deterioration, and abandonment of existing infrastructure. Housing and employment in remote locations because of lack of affordable housing, the city argues, brings environmental, social and financial harm.13 Impacts on Corridor-Based Transit Oriented Development on Rental Housing For the purposes of this study, we are looking at the impact of corridor development on the rental housing market only, given that the Upper Airport Boulevard is nearly 65% renter occupied and transit corridors tend to face a tightening of the rental market as new development occurs. A 2011 study by the Joint Center for Housing Studies found that in 2003, nationally, there was one affordable, available, and adequate unit for every 2.5 extremely low-income renters. By 2009, one unit existed for every 2.9 such renters. “As the rental market continues to tighten and the competition for low-cost housing intensifies, the gap between the demand for and supply of affordable rentals will only increase.”14 Indeed, in Austin, just 1 in 6 renters earning less than $20,000 can find affordable housing, and only 25% of these residents are students.15 Further, the Dukakis Center for Urban and Regional Policy’s recent research confirms that neighborhoods with a large number of renters are more susceptible to gentrification. Particularly in neighborhoods where new transit stations were being constructed, “almost every aspect of neighborhood change was magnified: rents rose faster and owner-occupied units became more prevalent.”16 A brief review of the literature finds similar evidence in many other corridor-oriented cities in the United States.

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Data on changes in homeowner housing values is included in Table 2, below, as we assume that rental market prices track closely with values of single-family homes as land values increase. Figure 1: Rental Markets

Source: Joint Center for Housing Studies of Harvard University 2011 Table 2: Effects of Transit Systems on Property Values17 City Atlanta*

Minneapolis * Chicago*

Transit Corridor Type “Atlanta Beltline” project is redeveloping 22 miles of freight rail line to a light rail Hiawatha Line (opened 2004) Midway Transit Line (opened 1993)

Miami*

Miami Metrorail

Portland*

Westside extension line

Dallas^

DART

Special Circumstances

Effect on Home Values and Rents

Effect on home prices began long before construction of the light rail even began. This affect was felt only in the lessaffluent region of the beltline.

SFH within ¼ mile of the planned loop sold at 15-30% premium compared to those 2 miles away.

Home value increases began in 1984, the year the project was announced.

Data comes from 2003 study. 2010 land values in Dallas decreased 4.6% overall.

Within ½ mile of a station, SFH value increased 4%, MF properties rose 10%. SFH increased 4.2% in 1984;19.4% between 1991-1996, and 10% after 1996. No notable increase in SFH value in high-price neighborhoods. Vacant land within ½ mile of proposed line sold at 31% premium after plans announced. Values of residential properties near DART stations rose 25% more than those not served by rail.

These figures seem to support the theory that “proximity to public transit does lead to higher home values and rents.”18 Unsurprisingly, the strength of a regional economy is also a strong determining factor in

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transit’s impact on home values. Home values in cities with strong growth economies tend to have greater home value increases around new transit development, though even in slow-growth cities, increases have been observed.19 The reason for this may be because, “It is widely accepted that transit investments do not so much generate new growth but rather redistribute where growth takes place – growth that would have occurred with our without transit.”20 Interestingly, the type of transit seems to also have a direct effect on home values. Much research suggests that heavy and commuter rail systems have a greater impact than light rail systems, most likely due to their greater convenience, frequency of stops, speed of travel, and scope of service.21 It is also important to note that homes located “too close” to transit rail lines or stations themselves face a decline in home value, a trend referred to as the “nuisance effect.”22 Given this reality, how can cities help mitigate against the inevitable and corresponding displacement of low and moderate income residents of neighborhoods affected by transit oriented development? Much of the literature supports the conclusion that, “where public transit is extended to areas with an existing housing stock, the most cost-effective strategy for building affordability into a station area is often to preserve the housing that is already there.”23 Mechanisms for accomplishing this goal, however, are challenging. Without significant public investments and political will, it is often difficult for municipalities to proactively combat a loss of affordability as a result of transit development. There are many tools, using both “carrots and sticks,” that can be used to incentivize developers to include affordable housing in new mixed-used developments. In the Upper Airport Boulevard, however, the current stock of affordable housing is primarily unsubsidized, older single-family and multi-family rental homes. Wardrip suggests options like using public funds to acquire and rehabilitate unsubsidized rental and owner-occupied housing in order to ensure affordability.24 Keeping this context in mind and utilizing a detailed analysis of programs in Dallas, Minneapolis/St. Paul, and Chicago, our team has identified several policy avenues that the city could pursue in order to help maintain affordability for residents of the Upper Airport Boulevard corridor. We have divided these options into two types: big ticket policy options (requiring significant investments and political negotiations) and small ticket policy options (requiring smaller investments).

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Figure 2: Undeveloped Land

Harmon Ave& 50th Street

A ir po rt Blvd.

Key Final Project Area I-35

Metro Line Undeveloped Land

A irp or t Bl vd .

Airport Blvd.

Source: City of Austin 2010 Land Use Data

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Big Ticket Policy Options Strategy: Repurposing of Underutilized Land through Publically Financed Landbanking Funding: General Obligation Bond A proactive locality that implements a land acquisition strategy before land values increase will have a much greater dollar-for-dollar impact than one that reacts after prices have begun to climb. One option is to acquire land for mixed income residential development as part of the process of acquiring land for new stations.25 Keith Wardrip, Center for Housing Policy As we have shown, one of the first causalities of redevelopment projects is the loss of affordability through an increase in assessments and home values (refer to Table 2, above). One proven method of combatting this trend is through targeted property acquisition using public funds. This land can then be leased or sold at a discount to non-profit housing providers. Because the land is tax-free and the city is not making these purchases as investment properties, there is much less pressure on increasing land values. Austin has a strong history of landbanking for the benefit of residents needing affordable housing. Developments like Mueller Airport, M-Station, and the Villas on 6th have all been developed through creative public-private partnerships with city-owned land leased or sold to non-profit providers of affordable housing like Foundation Communities. These developments have been aimed particularly at residents at less than 30% MFI, the most income-insecure population in Austin. This trend has not extended to the new Transit-Oriented Development areas west of I-35, however; housing developments in these areas have been more market-based. We find a significant opportunity for landbanking in the Upper Airport Boulevard that is strategically aligned with the various goals of neighborhood associations and design aesthetics of the form-based code initiative. According to the Airport Blvd. Market Study, there are 15.5 acres of vacant land in the TOD corridor.26 This is a relatively limited amount of vacant land compared to the whole study area, but this land provides a significant opportunity for the city to make investments in the long-term affordability of the neighborhood. These small, unimproved lots can be acquired for a relatively small investment, and the types of new affordable housing that could be constructed would be duplexes or small apartment complexes, which are in line with the neighborhood plan priorities about preserving the character of the neighborhood through height restrictions. In addition to the vacant lots currently identified, there are a number of publically owned parking lots, which could be determined to be underutilized. These lots could also be repurposed into small affordable units. The stock of current undeveloped land, gathered from Austinâ&#x20AC;&#x2122;s 2010 city land use database, can be seen in Figure 2, below. One promising vacant lot has been highlighted. Mentioning a strategy of repurposing underutilized land tends to make residents of a neighborhood slated for redevelopment uncomfortable because of the implied threat to homeownersâ&#x20AC;&#x2122; land. Making strategic investments in lots that currently do not have homes or residents alleviates this neighborhood fear and can have a marked impact on improving neighborhood-friendly density, while providing affordable rental housing units. Landbanking could also take place through the purchase of land underneath current

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unsubsidized affordable housing, but this would have to be very carefully negotiated. The inspiration for this policy option comes from an analysis of the Twin Cities initiative to purchase and create infill housing on land that has been run-down, foreclosed on, or forfeited. The Land Acquisition for Affordable new Development (LAAND) Initiative is blessed with a robust collective funding mechanism from Minnesota Housing, the Metropolitan Council and the Family Housing Fund. The goal of the program is to use zero-interest loan financing to assist communities in meeting their affordable housing needs by taking advantage of current land prices to purchase land to be held for future affordable housing development. The fund is used for land acquisition and the costs related to acquisition and holding including appraisals, environmental assessments, taxes, insurance, site maintenance. In order to gain access to funding through the LAAND program, the cost of land must be a documented impediment to affordable housing development. In addition, strict guidelines are put in place for organizations and public agencies applying for these loan funds. A site must meet certain guidelines that are in line with the larger Corridor of Opportunities initiative, the strategic city initiative aimed at improving accessibility and equity. To apply for a LAAND loan, the selected site must:  Have proposed capital infrastructure improvements that coincide with applicant’s planned development of the site  Be adjacent to land also planned for development prior to 2020, including commercial  Have housing plans that meet Green Communities and Minnesota Overlay standards  Have housing plans that facilitate economic integration within planned development on the site or broader community  Already be located within a transit service area, or an area slated for expansion of services by 2020  Include a minimum of 20% of new housing units affordable for 60% MFI in the Metro area and 80% in Greater Minnesota  Guarantee 7-year minimum affordability for ownership and 15-year for rental  Be located within a certain distance (1/2 mile, typically) of a current or proposed transit station along the corridor  Begin construction and repayment of loan within five years of receiving funding So far, the City has used a loan to acquire two sites along the corridor, one of which is under contract with a non-profit developer (Project for Pride and Living) and is in the design phase. This program is still relatively new and its long-term success remains to be seen, but we believe that the Upper Airport Boulevard is ripe for this kind of investment. Other models that Austin can look to for assistance in developing a program like this is the South Corridor Land Acquisition Fund in Charlotte, NC; the Denver Transit Oriented Development Fund in Colorado, and Bay Area Affordable Transit-Oriented Development Fund in California. It should be noted that these funds have deep pockets as a result of strong regional planning associations like the Metropolitan Council in the Twin Cities.

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Table 3: TOD Acquisition Funds in Other Cities City Charlotte, NC

Denver, CO San Francisco, CA Twin Cities, MN

Fund South Corridor Land Acquisition Fund

Size of Fund $5 million

Affordable Housing Trust Fund

$45 million

Denver Transit Oriented Development Fund Bay Area Affordable Transit-Oriented Development Fund Land Acquisition for Affordable New Development Initiative

$15 million $40 million

TOD Fund

$33 million

$4 million pilot

Based on interviews with a number of local housing advocates, including the Neighborhood Housing and Community Development department at the City, the primary funding mechanism for a program like this would have to come through general obligation bonds. The City of Austin should include this acquisition program in its new GO bond proposal for 2012, which is currently in development. A market assessment of the current stock of vacant land and underutilized parking lots will be needed in order to determine total funding needed. An Austin program based on the LAAND model should also include careful restrictions on how funds may be used and the type of properties eligible, including long-term affordability incentives. Beginning to network with local providers of low-income housing in the central Austin region should also be a top priority in order to establish future partners who can develop land acquired in this way. Strategy: Rental Assistance Funding: Federal Funds Approximately 75 percent of the U.S. Department of Housing and Urban Development’s budget goes to rental assistance including both tenant and project based assistance. Rental Assistance provides an ongoing stream of funding that makes up the gap between what low-income tenants can afford to pay in rent and the cost of operating housing. As we can see in Figure 3, Rental Assistance is by far HUD’s strongest program, and one of the only increasing in budget for 2013. Thus, it is a program that should be taken fully advantage of when concerned about affordable housing preservation strategies. When thinking about such form of assistance, it is always important to analyze the context in which certain programs are meant to be applied. A notable characteristic of the area surrounding the Airport Boulevard Initiative, for instance, is its high renter occupancy in comparison to Travis County. Of all the occupied units around Airport Boulevard, 65.7 percent are renter occupied, in comparison to only 48.1 percent in Travis County. Furthermore, vacancy rates are also higher around Airport Boulevard than in Travis County, 10.7 and 8.3 percent respectively. Particularly the share of vacant units for rent is high around Airport Boulevard, 72 percent, whereas Travis County’s share is 52.7 percent (Figure 4). Median gross rents are also an important factor to take into account. Rents are more affordable in absolute terms around Airport Boulevard, $655 USD versus $891 USD in Travis County; however, median gross rent as a percentage of household income in 2010 was a lot higher around Airport Boulevard due to the lower median household income. Households around Airport Boulevard spent an average of 38.4 percent of

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their income in rent in 2010, whereas households in Travis County spent an average of 30.2 percent of their income in rent in the same year. The median household income in 2010 inflated adjusted dollars was $32,069 USD around Airport Boulevard and $54,074 in Travis County.27 Figure 3: HUD’s Regular Budget

Source: Jann Swanson, “HUD Ready with FY2013 Budget,” Mortgage News Daily, February 13, 2012. Figure 4: Tenure and Occupancy, Census 2010 100% 80% 60% 40% 20% 0% Occupied

Owner Occupied

Renter Occupied

Airport Boulevard

Vacant

Vacant for Rent

Travis County

Source: U.S. Census Bureau, 2010 Decennial Census After analyzing the previous data, one of the various programs that seemed fitting to our context was the HOME program for Tenant-Based Rental Assistance. HOME funds can be used to provide direct rental assistance for up to two years (although it can be renewed) to low-income households earning below 60 to 80 percent of the Area Median Income. Assistance cannot be greater than the difference between 30 percent of the household’s income and the rent standard; this subsidy helps make up for the difference between what renters can afford to pay and the actual rent of homes. The amount of the rental subsidy is based on the income of the household, the unit selected, and the rent standard of the area. TBRA can be used in a unit type and neighborhood chosen by the tenant (if it meets Housing Quality Standards and rents are reasonable in comparison to other rents in the area) and the assistance moves with the tenant.

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Furthermore, low-income households can receive this subsidy to help pay rent, utility costs, security deposits, and utility deposits. Using HOME funds for TBRA is ideal for jurisdictions with a high vacancy rate for standard housing that is not affordable to low- and very low-income households, like is the case around Airport Boulevard. Furthermore, TBRA can complement or make up for the difficulty of new affordable housing construction and rehabilitation, and assist where large public subsidies are needed to spur private development. A participating jurisdiction can choose the population served, such as the entire community, or focus only on a specific housing need, such as elderly tenants, large families, or a special needs population. Moreover, the assistance, which can be used for a variety of different things, as delineated above, can be provided in the form of a grant or a loan. Finally, TBRA funds can supplement other program funds to enhance services provided; partnerships can be created between different instances; and funds can support housing development activities such as the rehabilitation of properties, although TBRA stays with the tenant household whether it moves or stays at its current residence. Participating jurisdictions must monitor its TBRA program on an ongoing basis to ensure compliance with HOME requirements.28 A particular important point to emphasize is that if Airport Boulevard becomes a high opportunity area with high accessibility to transportation and jobs, it is important to ensure that low and moderate income families are provided the assistance to stay in the area. Capital costs allow HUD to partner with communities to develop and repair affordable housing or support economic development and infrastructure. Around 20 percent of HUD funds go to this type of programs; loans for construction and rehabilitation of rental housing can be categorized within capital cost funds. Section 221(d)(4) for profit sectors and Section 221(d)(3) for non-profits insure mortgage loans to facilitate new construction or substantial rehabilitation of multifamily rental housing (5+ units). Longterm financing, up to 40 years, at a fixed rate subject to market conditions at the time of rate lock is available both for market rate and affordable housing. Furthermore, this program allows securitization through Ginnie Mae Mortgage-Backed-Securities. Affordable projects must have recorded regulatory agreements in effect for 15 years after the final endorsement; meet the minimum Low-Income Housing Tax Credit restrictions of 20% at 50% AMI or 40% at 60% AMI; and contain mixed-income schemes.29 Cities such as Chicago have instituted ordinances to preserve efforts achieved through federal funds. The Affordable Housing Preservation Ordinance requires owners of federally assisted rental housing to notify the City of Chicago Department of Housing and Economic Development at least 12 months prior to expiration, prepayment, refinancing, terminating, opting out, or canceling of a federal mortgage, mortgage insurance, Section 8 contract, or selling, assigning or otherwise disposing of any federally assisted rental housing.30 It would be advisable that Austin considered implementing ordinances similar to the one used in Chicago. Given the weakness of local funds, federal funds and programs should be diligently protected.

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Figure 5: Changes in Funding Levels for Major Program Areas ($ in Millions USD) $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Tenart-Based Project-Based Public Housing Rental Assistante Rental Assitance Operating Fund (+$160) (-$640) (-$433)

FY 2012 Enacted

Community Development Fund (-$165)

HOME Investmen: Partnerships ($0)

Homeless Assistance Grants (+$330)

Sections 202 & 811 (+$85)

FY 2013 Request

Source: Jann Swanson, â&#x20AC;&#x153;HUD Ready with FY2013 Budget,â&#x20AC;? Mortgage News Daily, February 13, 2012. Strategy: Loans to Build and Rehab Rental Housing Funding: Federal Funds Table 4: Underwriting Guidelines for New Construction and Substantial Rehabilitation of Multifamily Rental Housing (5+ Units) Project Type

Debt Service

Market Rate

Loan to Value/Cost Ratio 83.3%

Affordable

87.0%

1.150x

Affordable (Nonprofit/Public) 90% Rental Assistance

90.0%

1.111x

90.0%

1.110x

1.200x

Source: U.S. Department of Housing and Urban Development

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Strategy: Affordable Housing through Tax Increment Financing Funding: Tax Increment Financing District Dr. Elizabeth Mueller finds that â&#x20AC;&#x153;in both Dallas and Austin, private, unsubsidized apartments form the bulk of the affordable units for rent, outnumbering the stock of affordable housing serving households with incomes below half the regional median that have been constructed through all public programs combined.â&#x20AC;?31 As these units are not subsidized, the City of Dallas needed to take measures to increase the supply of affordable housing in the city, especially near transit oriented development areas. Two studies by the Center for Economic Development and Research at the University of North Texas by Weinstein and Clower found that the median values of residential properties increased 32.1% near DART stations in Dallas compared to 19.5% in the control group areas. Rents in a sample of properties around the DART stations increased by 25% compared with a sample of comparable non-DART properties, with the highest gains occurring in the Cityplace-Mockingbird-Lovers Lane corridor.32 Increased property values translate into increased rental costs for low-income families living in the area. Similar increases in property values could be expected along the Airport Boulevard corridor. To address this issue, the Skillman Tax Increment Financing District required that at least 20 percent of housing units meet affordability criteria for at least 10 years or pay the City of Dallas a fee in lieu of providing units in the Skillman area. Affordable housing units are defined as those affordable to a household earning 80% or below of the median family income for the Dallas metropolitan area. 33 The fee per rental unit was $15,000 if the gap between the proposed rent and the affordable rent was less than 20 percent and the total affordable housing payment was made within three years of City approval of the project. If the gap between the proposed and affordable rent was 20% or greater, the developers would pay the City $20,000 per rental unit. The same fees applied for a conversion of a rental unit to a condo, depending on the size of the gap between the proposed and the affordable rent. The payment for condo conversion would be due within 90 days after the sale or no later than one year after a unit became vacant, regardless of whether it had been sold, according to the Lake Highlands Town Center Project Development Agreement Terms.34 The City of Chicago Tax Increment Financing-Neighborhood Improvement Program (TIF-NIP) has provided home repair grants in eligible TIF districts since 1999. 35 As a stipulation for participating in the program, multi-family building owners must structure their rents so they are affordable to households at or below 80 percent of annual median income. The program funds both exterior and interior repairs in single and multi-family buildings, with up to 30% of the grant eligible for health and safety related interior repairs and the majority of the grant designated for exterior repairs. The single-family program requires that homeowners have a household income at or below 100% of the area median income. If the household is between 100% AMI â&#x20AC;&#x201C; 140% AMI, the homeowner must match the grant amount. The single-family program allows from $12,500 for a single unit to $22,500 for 4 units per residence, while the multi-family program allows for $5,000 per unit up to $100,000 per building. The Chicago Housing and Economic Development department implements these grants by working with delegate agencies to help them process grant applications and select contractors. A similar grant program in Austin, potentially funded with TIF funds, would help reduce the stigma of affordable housing along the corridor by allowing landlords to improve the exterior appearance and

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interior functionality of their buildings. Some of the stigma associated with unsubsidized affordable rental housing in Austin comes from the perception that the units are low quality and operated by “slumlords.” A housing renovation grant program would also allow owners of affordable units along Airport Blvd. to comply with neighborhood form-based housing codes. Funds from the Skillman TIF were used for environmental remediation (removal of asbestos, lead-based paint and other contaminants), interior and exterior demolition costs for buildings that were financially unfeasible to redevelop, street and utility improvements, streetscape improvements (lighting and sidewalk improvements; enhancing pedestrian and vehicle continuity), land acquisition for park development via eminent domain, design of public open space, and economic development loans and grants “needed to further implement” the TIF plan.36 Both of these models provide examples for how the City of Austin could use TIF funds to acquire property for landbanking, build pocket parks, improve the quality of the existing stock of unsubsidized affordable rental housing and bring existing housing into compliance with neighborhood form-based housing codes through sidewalk, parking and external improvements. Tax Rates The Grand Park South and Skillman Corridor TIFs increased the real property tax base in TIFs to 4.5% from the previous rate of 3.9% for the twelve existing TIFs. Under Chapter 311 of the Texas Tax Code, cities can designate up to 15% of the tax base within TIF districts. Austin is well below the 15% TIF tax rate and could use a TIF to finance construction and renovation of affordable rental housing in the Airport Boulevard corridor. The City of Dallas used a TIF to match funds from a HUD Community Challenge grant to fund planning and land acquisition for affordable housing and transit oriented development near 4 DART stations including the Park Lane station. The City of Austin could use TIF funds and a HUD Capacity Building for Community Development and Affordable Housing Grant to acquire privatelyowned vacant land or use city-owned vacant land to construct new affordable rental units in the Airport Boulevard corridor. Construction of these units would ensure that housing would remain affordable as property values rise in the Airport Boulevard TOD corridor. The Airport Boulevard corridor meets the criteria for a TIF area: the area is less than 30% residential and the value of the area’s property does not exceed 25% of the municipality’s total assessed value.37 Addressing Challenges with Tax Increment Financing Projects While the TIFs described above all include provisions for affordable housing development, TIF projects in Dallas have a history of displacing existing residents through gentrification. Marsha Prior and Robert V. Kemper in From Freedman’s Town To Uptown: Community Transformation And Gentrification In Dallas, Texas describe how establishment of tax increment finance districts, public improvement districts and historic districts in the city ultimately displaced existing residents under the guise of building higherdensity, mixed-use residential/commercial development. For example, Prior and Kemper note that as part of the Cityplace and State Thomas area TIFs, the Dallas Housing Authority replaced the Roseland Homes housing project with a smaller number of units “deemed to be more compatible with the upscale residential and commercial environment being developed in the area.”38

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To avoid similar problems surfacing with use of a TIF in Austin, we recommend that community development stakeholders and affordable housing advocates are involved on the TIF board and that existing residents of low-income housing along Airport Boulevard be involved in the construction or renovation of affordable housing in the area. The composition of TIF boards is prescribed by Chapter 311 of Texas state tax code and takes the following structure as shown in Figure 6. Figure 6: Tax Increment Financing Board Composition

TIF Board Composition

    

2 year terms; can be staggered At least 5 and not more than 15 members Each taxation unit other than the municipality, if they have agreed to pay into the TIF, appoints one member A taxation unit may waive its right Municipality or county may appoint up to 10 members

Reinvestment Zone TIF

Special designation Includes areas using land in connection with a mass transit rail system City can limit board to 9 members Must include the State Senator or State House Representative from the TIF’s district(s) These state legislators can appoint someone else in their stead

Finally, as TIFs require the agreement of all participating taxation authorities in the tax increment financing district, non-participation of one entity can prevent the entire project from succeeding. The City of Austin has clear reasons for supporting a TIF to provide affordable housing in the Airport Boulevard corridor: maintaining a diverse, culturally and socially rich city that provides opportunities for Austinites of all income levels. Travis County has real reasons for supporting development of affordable housing along Airport Boulevard as well: its employees work in the neighborhood, at 5501 Airport Blvd. Preserving affordable housing along the corridor would ensure that Travis County employees could afford to live near to where they work and that they could easily commute via public transportation. Investment in affordable housing, whether through a TIF or other means, ensures that both public and private employees working in Austin can afford to live in the city.

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Preventing Displacement of Existing Residents Ensuring affordable housing in the Airport Boulevard corridor would also prevent long-term displacement of students attending schools in the area if property values rise. However, if the City of Austin were to renovate or demolish existing multi-family housing in the Airport Blvd. corridor, the City would need to ensure that the renovations would not negatively affect students attending area schools. During renovation of multi-family developments in the Skillman TIF corridor, the City of Dallas worked with the Richardson and Dallas Independent School Districts to minimize displacement of families with children. The City and RISD created a $1,000,000 fund for relocation assistance for families with children attending RISD schools to relocate within the RISD jurisdiction if these families were displaced as a result of TIF-related redevelopment. Developers provided the funds for this relocation assistance, which would be repaid â&#x20AC;&#x153;as part of TIF financial incentives for a project or paid for directly with tax increment.â&#x20AC;?39 We recommend that the City of Austin implement such a fund for relocation assistance in the case of redevelopment or demolition of multi-family units. Homestead Preservation Districts In 2007, the Texas Legislature passed an act allowing municipalities to create Homestead Preservation Districts to preserve affordable housing in areas of low median family income. The Airport Blvd. corridor meets the definition of a Homestead Preservation District as defined in Chapter 373A of Local Government Code40: a) fewer than 25,000 residents b) less than 50% owner occupied c) fewer than 8,000 households d) 55% of housing stock built 45 years ago e) unemployment rate over 10% f) poverty rate twice that for the municipality g) median family income less than 60% that of Austin Homestead Preservation Districts allow for municipalities to use tax increment financing while also giving specific legislative authority for development of a community land trust, a land bank and reinvestment zones to preserve homeownership in disadvantaged neighborhoods and ease the effects of gentrification. The statute also allows municipalities to require preservation or development of affordable housing in an area, which is not specifically allowed under the Chapter 311 Tax Increment Financing Act.41 Specifically, designation of a homestead preservation district requires: â&#x20AC;&#x153;(b)All revenue from the tax increment fund must be expended to benefit families that have a yearly income at or below 70 percent of the area median family income, adjusted for family size. (c) At least 50 percent of the revenue from the tax increment fund expended annually must benefit families that have a yearly income at or below 50 percent of the area median family income, adjusted for family size.

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(d) At least 25 percent of the revenue from the tax increment fund expended annually must benefit families that have a yearly income at or below 30 percent of the area median family income, adjusted for family size. (e) The municipality must spend at least 80 percent of the revenue expended annually from the tax increment fund for project costs, including the purchase of real property, the construction or rehabilitation of affordable housing in the zone, and infrastructure improvements directly related to supporting the construction or rehabilitation of affordable housing in the zone. The municipality may spend not more than 10 percent of the revenue expended annually from the tax increment fund for administration of the zone. (f) The municipality may provide not more than 10 percent of the revenue expended annually from the tax increment fund to designated land banks and community housing development organizations for the administration of housing-related activities in the zone. (g) All housing created or rehabilitated with revenue from the tax increment fund must have at least a 30-year affordability period.â&#x20AC;?42 The City of Austin experimented with implementation of a Homestead Preservation District in East Austin in 2008, with the idea of lowering the tax burden on lower or fixed income residents whose property taxes rose as an effect of gentrification. While the City Council approved the plan, East Austin property owners disliked the model because it involved selling the land under their house to the Cityâ&#x20AC;&#x2122;s affordable housing land bank. Even though the model allowed low-income residents who participated in the program to forgo paying property taxes, Austinites disliked the plan because they saw it as the City seizing their land and potentially their homes. Travis County Commissioners disliked the plan because the county would lose out on property tax revenue.43 Designation of a homestead preservation district along Airport Blvd. would need to completely differ from this 2008 model. Instead of buying the homes of low-income residents to allow them to forgo paying property tax, a homestead preservation district along Airport Blvd. would use a TIF to maintain and create affordable housing as described above, while allowing the City of Austin to require that the district remain affordable in the long term. Under normal circumstances, the City of Austin can only provide incentives for housing to remain affordable; it cannot require that housing remain affordable over time. A homestead preservation district will allow renters in the Airport Blvd. corridor to weather any gentrification that may occur in the area over the long term, even as property values rise. Under a regular TIF, rental housing may remain affordable in the short term, but the city may not be able to guarantee affordability in the long run. Small Ticket Policy Options Strategy: Weatherization & Energy Efficiency Programs Funding: Federal Funds Air conditioning in Austin accounts for up to 70 percent of an average homeâ&#x20AC;&#x2122;s summer electric bill. But even in months when extreme weather is not an issue, heating and A/C systems account for 40 to 50 percent of all the utility costs of a household. Thus, energy efficiency upgrades, such as weatherization, are critical strategies to implement and deal with burdensome utility costs for low-income households.

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Weatherization fixes the problems of air leakage and air infiltration where climate-controlled air escapes from a home and outside air enters into a house. Thus, weatherization can save as much as 10 percent on heating and cooling bills by reducing air leaks. Home Energy Audits determine the amount of air leakage in a home and inspect for leakage sites. Various qualified private companies in Austin provide the above services.44 Figure 7: The Anatomy of a Cooler House

Source: A Cooler House, “The ‘Heat Defense System’” The U.S. Department of Energy provides funding to states which manage the day-to-day details of programs such as the Weatherization Assistance Program. State governments, in turn, fund a network of local community action agencies, nonprofit organizations, and local governments that provide weatherization services. WAP enables low-income families to permanently reduce their energy bills by making their homes more energy efficient. Funds are used to improve the energy performance of dwellings of disadvantaged families using the most advanced technologies. Energy conservation resulting from these efforts also improves health and safety standards in the homes of families in need. During the past 33 years, WAP has provided weatherization services to 6.4 million low-income households. Because the energy improvements that make up weatherization services are long lived, the savings add up over time to substantial benefits for weatherization clients and their communities.45 Texas WAP is administered by the Texas Department of Housing and Community Affairs, which monitors 44 sub-recipients through on-site monitoring and other strategies.46 Austin Energy is one of these recipients, and thus offers free home-energy improvements to customers with low-to-moderate incomes to reduce energy costs and enhance their comfort. If needed, Austin Energy provides materials for and installation of: attic insulation, minor duct repair and sealing, caulking around plumbing penetrations, weather stripping around doors, and solar screens. To qualify for this assistance households

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must be AE customers; occupy the home they want weatherized (renters must have lived in the home for at least three months); the residence must be a single-family home, mobile home, or duplex; the appraised value of the home, excluding land value, should generally be under $150,000 USD; and must be able to verify income and/or disability status (Table 5).47 Table 5: Free Home Improvements Income Guidelines People living in home 1 2 3 4 5 6 7 8

Household 60+ or with disability $41,050 $46,900 $52,800 $58,650 $63,350 $68,050 $72,750 $77,400

Household under 60 $25,650 $29,300 $33,000 $36,350 $39,600 $42,500 $45,450 $48,400

Source: Austin Energy, 2012 The above efforts represent a remarkable starting point in the effort of dealing with affordability issues in Austin. Yet, these efforts need to be better matched with affordable housing investments. Perhaps, Austin Energy and the Neighborhood Housing and Community Development Office could identify opportunities for joint investment. As of now, the only program in which the two agencies have worked together is S.M.A.R.T Housing. Austin Energy reviews all S.M.A.R.T. Housing plans for compliance with Green Building requirements, and NHCD reviews plans for compliance with transit-oriented and accessibility standards. 48 Beyond this collaboration, there could be a joint investment opportunity for NHCD and AE to provide further assistance to low-income households to meet their immediate home energy needs. Special attention should be given to households with the lowest incomes and to those who spend a high proportion of their household income on utilities. Block grants in the form of the Low Income Home Energy Assistance Program are provided by the federal government to states that wish to assist low income households in meeting the costs of home energy (heating or cooling residential dwellings). Congress established the formula for distributing funds to States based on weather and low income population. Supplemental competitive grants can be received for implementation through local community-based agencies to help eligible households reduce their energy vulnerability. Eligible householdâ&#x20AC;&#x2122;s income must not exceed 60 percent of the State median income, which in Texas is $49,646 USD49. LIHEAP income eligibility level is also set in Texas by the 125% Federal Poverty Level (Table 6). LIHEAP Fiscal Year 2012 Funding for Texas is $129,832,056.50 Table 6: FY 2011/2012 HHS Poverty Guidelines Size of Family Unit 125 Percent of Poverty

$13,613

$18,388

$23,163

$27,938

$32,713

$37,488

$42,263

$47,038

Note: For family units with more than 8 members, add $4,775 for each additional person Source: U.S. Department of Health and Human Services, 2011

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Strategy: Transit Cost Relief Funding: Housing Developers and Employers In general, families with lower to middle incomes tend to use public transportation at higher rates than those with high incomes, as can be seen in figure 8, below. In the Airport Boulevard corridor, 14.5% of zip code 78751 and 9.4% of 78752 use public transportation to get to work. Additionally, 10.1% and 16.2% of people in those zip codes (respectively) do not have a vehicle available for alternative transportation.51 Figure 8: Household Income of Transit Passengers52

Nationally, working families spend an average of 57% of their incomes on housing and transportation. Families who live near transit, however, spend just 9 percent of their income on transportation, while those who live in auto-dependent neighborhoods spend an average of 25 percent of income on transportation.53 In the Airport Boulevard corridor, ACS data indicates that 12% of residents commute by bus, more than city residents as a whole.54 While transportation costs are lower for residents who live near and regularly use public transportation, other costs of living increase as a result of development pressure. One simple and inexpensive way to decrease the costs of living for low to middle-income people living near TOD development would be to provide incentives or vouchers to users of public transportation in affordable rental units. This policy initiative has the potential for a triple bottom line: increasing ridership of public transportation, decreasing living expenses, and lowering the need for parking spaces at affordable complexes. The Santa Clara Valley Transportation Authority (VTA) Eco Pass program is a good example of this kind of initiative. VTA offers deeply discounted transit passes to affordable housing developers, who pass on

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the passes to their residents, who get unlimited rides on VTA bus and light rail seven days a week. One affordable housing developer has already been able to reduce the needed parking at its properties. According to the executive director, not constructing just two parking spaces pays for the entire Eco Pass program.55 This is an example of an extremely low-cost program that can have a big impact on low-income folks. In the VTA program, apartment complex owners and employers bear the cost of purchasing the passes, and do so because it is an incentive for the people who live in their buildings. While many renters in the Upper Airport Boulevard corridor are University of Texas students and therefore already benefit from free public transportation on CapMetro, this benefit would be most useful for non-student renters. Both housing providers and employers could be incentivized to participate in the program, with a focus on lowincome residents. Strategy: Low-cost Community Improvements Funding: Various The area inside and surrounding the Airport Boulevard Initiative has a significant number of vacant lots. Similarly, a portion of the abundant and underutilized parking lots that have characterized the area could be put to better use. The repurposing of land was discussed in previous sections in the form of land banking programs; TOD-focused land banking funds have been utilized for the provision of affordable housing near transit in other cities. An additional idea for a reduced portion of this acquired or available land is the extension of lacking public spaces in the area in the form of small pocket parks or green alleys. It should become increasingly evident to the Austin community that the rehabilitation and return to productive use of vacant, abandoned and underutilized land can bring social, economic and environmental benefits. Furthermore, housing affordability needs to be synchronized with livability principles, particularly when it comes to families and children being able to live in decent and affordable neighborhoods. The Form-Based Code, which focuses on urban form and design, also aims to promote local planning goals and meet community needs. Arguably, even local affordable housing requirements and needs can be incorporated into a FBC. Because the FBC helps resolve compatibility issues associated with higher density and mixed-use housing, it has the potential to provide improved opportunities for achieving affordable housing goals by making a wider range of housing types available in a manner that is acceptable to the community. In a similar way, perhaps the FBC can help define and enhance public spaces in an economically efficient way while taking community considerations into account. The FBC can provide clear standards for urban infill development and physical improvements that are conducive to private investment and vitality in an area.56 As usual, the most complex issue is the funding and implementation of strategies that relate to affordability. In other cities, such as Chicago, funding for low-cost community improvements usually comes from development fees and land contributions. Working with non-profits that acquire the land and ensure its continued survival has also proven highly effective in the past.57 Public-private partnerships might be another strategy to accomplish some of these inexpensive community improvements and redevelopment projects. Such partnerships will require a commitment to mutual and respective goals,

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such as increasing economic activity in the area and delivering a better life for all residents in a community. The federal government provides a wide array of grants and other financial assistance to communities, nonprofit organizations and individuals to encourage the expansion of green areas, parks and national monuments in the United States. The Urban Park and Recreation Recovery Program, for instance, is designed to revitalize struggling urban areas. These project grants are offered as a 50-50 sharing partnership between the federal government and a local community. State, local and private funds may be used as the nonfederal share of project costs. Most grants are used not only to create new parks and open spaces, but also to revitalize dilapidated recreation areas. Rehabilitation grants are matching capital grants (70 percent federal, 30 percent local) for the purposes of rebuilding, remodeling or expanding existing facilities. Funds cannot be used for maintenance or acquisition. Innovative approaches to improve park system management and recreation opportunities need to be demonstrated, as well as the development of improved recreation planning. Innovation grants are also matching grants (70 percent federal, 30 percent local) to cover costs of personnel, facilities, equipment, supplies or services designed to demonstrate innovative and cost effective ways to enhance park and recreation opportunities at the neighborhood level. Finally, all properties assisted through this program must be open to the public.58 The most common method for funding green and public spaces is to combine local, state, federal, public sector and private sector funds. Thus, the creation of a Public Improvement District is yet another alternative. PIDs are quasi-governmental entities that are created to improve infrastructure and promote economic growth in an area. PIDs allow cities to levy and collect special assessments on properties that are within the city or its extraterritorial jurisdiction to develop, rehabilitate or expand affordable housing, and create service, infrastructure, landscaping and other aesthetic improvements. Fifty percent of the property owners in the proposed district must sign a petition, and a public hearing needs to take place to advise the community of the nature of the district. These districts have been created in all major Texas cities. In 1993 Austin established its Downtown PID to provide a reliable and constant source of funding for various improvements to be completed over several years. This PID is managed by the Downtown Austin Alliance and in this case, the special assessment applies to privately-owned properties valued at more than $500,000 USD.59 In PID #1 in Downtown Fort Worth property owners within the area pay a special assessment ($0.10 per $100 USD of value) above their regular property taxes for a coordinated program of services such as landscaping, transportation and planning, and security enhancements.60 Centro San Antonio PID helps accommodate downtownâ&#x20AC;&#x2122;s growing residential population, enhance its office and retail market, and position downtown as an attractive destination.61 Arizona is another state in which PIDs are permissible and available as an incentive to produce affordable housing and public projects.62 PID guidelines are shaped and decided by the neighborhood that creates them, therefore, there is substantial room for negotiation to create a fund that truly serves the communityâ&#x20AC;&#x2122;s needs.

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Conclusion Inclusion and Affordability: The Time is Now. This report clearly demonstrates the complexity of preserving affordability after redevelopment projects such as the Airport Boulevard Initiative, on top of the fact that housing affordability is already an issue in the entire city of Austin. This has various negative social, environmental and economic implications for the functioning of the region and the wellbeing of its residents. Thus, efforts need to be significantly increased and numerous new strategies must be considered to address and resolve this problem. Notable actions have already been implemented by the city, non-profit organizations and other key housing advocates. Yet, while acknowledging contextual limitations, Austin could benefit from looking at the experience and knowledge of other cities that have had to deal with much of the same issues. Transportation Oriented Development has already proven to have an effect on home values and rents in other cities around the country; rising housing costs have caused gentrification and displacement. This is unfortunate, especially because in many cases such dislocation has caused a decline in transit ridership, since generally low- and moderate- income households use public or mass transit most frequently; hence the importance of preserving housing affordability in transit corridors and high-opportunity areas. It is also important to realize that the cityâ&#x20AC;&#x2122;s crafted vision throughout the Imagine Austin planning process is not likely to be accomplished without addressing the issue of housing affordability. Goals such as preserving livability, tackling the ethnic divide, protecting natural resources, promoting prosperity for all, and collaborating regionally, are not likely to be fulfilled without an affordable community in which people who work in Austin can also afford to live here, instead of having a growing number of families priced out of the city. Properly addressing this issue will prove to be an extremely complicated endeavor; there is not a simple or single answer or strategy to do so. With the issue of declining resources, various policies at different scales will have to be considered and implemented. Great political will and a cultural shift will also be fundamental in order to achieve common goals such as affordability. The point must be made that affordability will bring numerous benefits to the region, such as ameliorating traffic congestion, preserving resources, and increasing economic productivity; the common misconception of housing affordability as a burden on society must be challenged.

Chapter 5: References Austin Energy. 2012. http://www.austinenergy.com/energy%20efficiency/Programs/Free%20Home%20Energ y%20Improvements/index.htm (accessed May 1, 2012). BBC Research & Consulting. "Comprehensive Housing Market Study." Final Report, Denver, March 3, 2009. Center for Neighborhood Technology. H+T Affordabilty Index. 2011. http://htaindex.cnt.org/map/ (accessed April 29, 2012). Centro San Antonio. 2012. http://downtownsanantonio.org/centro (accessed May 1, 2012).

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Cervero, Robert, Christopher Ferrell, and Steven Murphy. Transit-Oriented Development and Joint Development in the United States: A Literature Review. Washington, DC: Transportation Research Board of the National Academies, 2002. City of Austin. "Imagine Austin Comprehensive Plan - DRAFT Revised April 2012." 2012. http://www.imagineaustin.net/chapters. City of Chicago's Official Site. 2012. http://www.cityofchicago.org/city/en/depts/dcd/supp_info/affordable_housingnotificatio nordinance.html (accessed May 01, 2012). City of Chicago Department of Housing and Economic Development, "Tax Increment FinancingNeighborhood Improvement Program (TIF-NIP)," City of Chicago, http://www.cityofchicago.org/city/en/depts/dcd/supp_info/ tax_increment_financing-neighborhoodimprovementprogramtif-nip.html. City of Dallas Office of Economic Development, Exhibit A: Skillman Corridor Tax Increment Financing District Project Plan and Reinvestment Zone Financing Plan, 17-21, March 9, 2011. City of Flagstaff's Housing Section. Incentive Policy for Affordable Housing Section. Government Report, Flagstaff: City of Flagstaff, 2009. Clower, Terry L. PhD et al., Assessment of the Potential Fiscal Impacts of Existing and Proposed Transit-Oriented Development in the Dallas Area Rapid Transit Service Area, Prepared for: Dallas Area Rapid Transit, 9, http://www.dart.org/about/WeinsteinClowerTODNov07.pdf. "Dallas Area Redevelopment Office of Economic Development." Vickery Meadow TIF District. n.d. http://www.dallasecodev.org/SiteContent/66/documents/Incentives/TIFs/VickeryMeadow/VickeryMeadow -Marketing.pdf . "Dallas Economic Development." Exhibit A: Skillman Corridor Tax Increment Financing District. n.d. http://www.dallasecodev.org/SiteContent/66/documents/Incentives/TIFs/Skillman/skillman_plan.pdf. "Dallas Economic Development." Lancaster Corridor Initiative. n.d. http://www.dallasecodev.org/redevelopment/neighborhood-initiatives/lancaster_corridor.htm. Dallas Office of Economic Development, "Lake Highlands Town Center Project: Skillman Corridor TIF District" (Powerpoint and attachments, June 4, 2007), Dallas City Hall, http://www.dallascityhall.com/committee_briefings/ briefings0607/EDH_060407_LakeHighlands.pdf. Downtown Austin Alliance. 2011. http://www.downtownaustin.com/daa/whoweare/mission/ (accessed May 1, 2012). Downtown Fort Worth. 2012. http://www.dfwi.org/what-we-do/pid-overview (accessed May 1, 2012). East Austin Conservancy & People Organized in Defense of Earth & Her Resources (PODER). "Land of Broken Promises & Land of Opportunity ." Austin, April 2012. Enterprise, The National Housing Trust, Reconnecting America. Preserving Affordable Housing Near Transit: Case Studies from Atlanta, Denver, Seattle and Washington, DC. Enterprise Community Partners, Inc., 2010. ESRI, â&#x20AC;&#x153;Demographic and Income Profile Report,â&#x20AC;? Austin 78751 and 78752, February 2, 2012

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Federal Grants Wire. 2012. http://www.federalgrantswire.com/urban-park-and-recreationrecovery-program.html (accessed May 1, 2012). Green Collar Operations. 2009. http://www.greencollaroperations.com/weatherization-austintx.html (accessed May 01, 2012). Holle, Gene. "Transit Oriented Development: The Chicago Perspective." Community Transportation 26 (2006): 37-40. Homestead Preservation Districts and Reinvestment Zones, Texas Local Government Code ch. 373A, § 373A.052, http://www.statutes.legis.state.tx.us/Docs/LG/htm/LG.373A.htm. Homestead Preservation Districts and Reinvestment Zones, Texas Local Government Code ch. 373A, § 373A.157, http://www.statutes.legis.state.tx.us/Docs/ LG/htm/LG.373A.htm. "Homestead Preservation Districts and Reinvestment Zones," HUD Regulatory Barriers Clearing House, http://www.huduser.org/rbc/search/rbcdetails.asp?DocId=1871. Joint Center for Housing Studies of Harvard University. The State of the Nation's Housing 2011. President and Fellows of Harvard College, 2011. Living Cities . Participating Sites. n.d. http://www.livingcities.org/integration/cities/ (accessed April 29, 2012). Metropolitan Council. Corridors of Opportunity. March 27, 2012. http://www.metrocouncil.org/planning/COO/ (accessed April 28, 2012). —. "Corridors of Opportunity Overview." May 2011. http://www.metrocouncil.org/planning/COO/CorridorsofOpportunityOverview.pdf (accessed April 29, 2012). Pollack, Stephanie, Barry Bluestone, and Chase Billingham. "Maintaining Diversity in America's Transit Rih Neighborhoods: Tools for Equitable Neigborhood Change." Dukakis Center for Urban and Regional Policy, Northeastern University, October 2010. Prior, Marsha and Robert V. Kemper, "From Freedman's Town to Uptown: Community Transformation And Gentrification In Dallas, Texas," Urban Anthropology 34, no. 2-3 (2005): 197,203,205, http://faculty.smu.edu/rkemper/ publications/PriorKemper_From_Freedmans_Town_to_Uptown.pdf. Sacramento Area Council of Governments. August 26, 2008. http://www.sacog.org/projects/formbased-codes.cfm (accessed May 1, 2012). Social Explorer. n.d. http://www.socialexplorer.com/ (accessed April 29, 2012). South Sacramento Corridor Phase 2 Project. "Light Rail Systems and Property Values Fact Sheet." 2004. S.M.A.R.T Housing, the Nuts and Bolts. Austin: The City of Austin, 2001. Tax Increment Financing Act, Texas Tax Code ch. 311, § 311.009, http://www.statutes.legis.state.tx.us/Docs/TX/htm/TX.311.htm. Texas Impact. n.d. http://texasimpact.org/content/weatherization-texas-department-housing-andcommunity-affairs-tdhca (accessed May 01, 2012).

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Texas Low Income Housing Information Service. Testimony of John Henneberger, Co-director, before the Texas Senate Intergovernmental Relations Committee on the committee interim charge, Accessed March 27, 2008. http://www.texashousing.org/blogfiles/s_test_gentrification.pdf. Toohey, Marty, "Homestead preservation district resisted by residents," The Austin AmericanStatesman, December 23, 2008, http://www.statesman.com/blogs/content/sharedgen/blogs/austin/cityhall/entries/2008/12/23/homestead_preservation_distric.html. Twin Cities LISC. Central Corridor Afordable Housing Coordinated Plan. City of Saint Pual, City of Minneapolis, Twin Cities LISC, January 2012. TXP, Inc. and Gateway Planning Group, Inc. "Upper Airport Boulevard Market Assessment Report." February 14, 2011. U.S. Department of Energy. January 30, 2012. http://www1.eere.energy.gov/wip/wap.html (accessed May 01, 2012). U.S. Department of Health and Human Services. January 18, 2011. http://www.acf.hhs.gov/programs/ocs/liheap/about/factsheet.html (accessed May 1, 2012). U.S. Department of Housing and Urban Development. July 10, 2009. http://www.hud.gov/offices/cpd/affordablehousing/training/web/abc/activities/tenantas sist.cfm (accessed April 29, 2012). Wardrip, Keith. Public Transitâ&#x20AC;&#x2122;s Impact on Housing Costs: A Review of the Literature. Insights from Housing Policy Research, Center for Housing Policy, 2011.

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Appendix A: Summary of Small Ticket Policy Options Strategy Weatherization & Low Income Home Energy Assistance Program

Case Study Austin, Texas

Reduction in Assessments and Taxes

Chicago, Illinois

Low-Cost Community Improvements

Chicago, Illinois

Description  Provided to low-to-moderate income Austin Energy customers to reduce energy costs and enhance comfort.  Weatherization fixes the problem of air leakages and air infiltration through energy audits which inspect for leakage sites and repair them through advanced technologies.  Federal block grants provided to states that wish to assist low income households in meeting the costs of home energy.  Available for new construction or major rehabilitation of affordable rental multifamily housing units (7+).  Over ⅓ of the units need to be affordable (below 30% of tenant’s income).  Max. household income cannot exceed 80% AMI.  Rehab and return to productive use of vacant, abandoned and underutilized land to improve social, economic and environmental conditions. This could expand lacking public space and could be designed under Form-Based Codes.  Funding can come from development fees and land contributions.  Removal of all minimum parking requirements for new developments and rehabilitation projects within ¼ mile of transit stations.

Reduced Mandatory Parking Requirements

St. Paul, Minnesota

Transit Cost Relief (Eco Pass Program)

Santa Clara, California



Zoning Change to Include ‘Accessory Dwelling Units’

Portland, Oregon



Special Considerations  Available only for single-family homes, mobile homes and duplexes.  Air conditioning in Austin accounts for 70% of an average home’s summer electric bill.  Weatherization can save as much as 10% on heating and cooling bills by reducing air leaks.



There are current property tax exemptions under state law for Community Housing Development Organizations (e.g. Foundation Communities), for delivering substantial public benefits.



This strategy would require the collaboration of non-profits and the creation of public-private partnerships. Federal funds could only partially contribute to these projects if they prove to be innovative. Public Improvement Districts could be an additional funding strategy. This program does not have data to show impact on affordability, especially in the long-term. Yet, Affordable Housing producers in St. Paul estimate that this would save $3,000/unit of new AH with surface parking and $20,000/unit for garage parking. This could be a good strategy for non-students in Airport Boulevard.

  

Transit passes are purchased by developers or  building owners to provide of free transit ridership to low income residents or employees of local businesses. ADUs can be created in a house (detached single  family dwelling), an attached house (rowhouse) or  a manufactured home. Some existing attached or detached garages can be converted into an ADU in all R zones. ADUs can also be created by construction of a new accessory structure.

A building permit is required to build an ADU. Attics and basements with limited ceiling heights may not qualify as space that can be converted.

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Chapter 5: Endnotes 1

City of Austin 2012, 10 City of Austin 2012, 4 3 East Austin Conservancy & People Organized in Defense of Earth & Her Resources (PODER) April 2012, 11 4 City of Austin, Neighborhood Housing and Community Development data 5 Wardrip 2011, 10 6 Metropolitan Council 2012 7 Metropolitan Council 2011 8 Living Cities 9 Twin Cities LISC January 2012, 1 10 Dallas Economic Development, “Lancaster Corridor Initiative” 11 Dallas Economic Development, “Exhibit A: Skillman Corridor Tax Increment Financing District” 12 Dallas Area Redevelopment Office of Economic Development 13 Holle 2006 14 Joint Center for Housing Studies of Harvard University 2011, 26 15 BBC Research & Consulting March 3, 2009, 5 16 Pollack, Bluestone and Billingham October 2010, 3 17 Summary gathered from a variety of sources: *Wardrip 2011, ^ South Sacramento Corridor Phase 2 Project 2004 18 Wardrip 2011, 5 19 Wardrip 2011, 9 20 Cervero, Ferrell and Murphy 2002, 45 21 Wardrip 2011, 5 22 Wardrip 2011, 6 23 Wardrip 2011, 10 24 Wardrip 2011, 10 25 Wardrip 2011, 10 26 TXP, Inc. and Gateway Planning Group, Inc., 2011 27 Census 2010, ACS 2006-2010: Block Group 1, Census Tract 3.04; Block Group 4, Census Tract 15.03; and Block Group 3, Census Tract 21.05 in Travis County, Texas. 28 U.S. Department of Housing and Urban Development 2009 29 U.S. Department of Housing and Urban Development n.d. 30 The City of Chicago's Official Site 2012 31 Texas Low Income Housing Information Service, Testimony 32 Clower, Terry L. PhD et al. 33 City of Dallas Office of Economic Development, Exhibit A: Skillman Corridor 34 Dallas Office of Economic Development, "Lake Highlands Town Center” 35 City of Chicago Department of Housing and Economic Development, "Tax Increment Financing” 36 City of Dallas Office of Economic Development, Exhibit A: Skillman Corridor 37 Tax Increment Financing Act, § 311.009 38 Prior, Marsha and Robert V. Kemper, "From Freedman's Town to Uptown” 39 City of Dallas Office of Economic Development, Exhibit A: Skillman Corridor 40 Homestead Preservation Districts and Reinvestment Zones, Texas Local Government Code ch. 373A, § 373A.052 41 "Homestead Preservation Districts and Reinvestment Zones," HUD Regulatory Barriers Clearing House 42 Homestead Preservation Districts and Reinvestment Zones, Texas Local Government Code ch. 373A, § 373A.157 43 Toohey, Marty, "Homestead preservation district resisted by residents” 44 Green Collar Operations 2009 45 U.S. Department of Energy 2012 46 Texas Impact n.d. 47 Austin Energy 2012 48 S.M.A.R.T Housing, the Nuts and Bolts 2001 49 ACS 2006-2010 in 2010 inflated adjusted dollars 50 U.S. Department of Health and Human Services 2011 51 ESRI, “Demographic and Income Profile Report” 2

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Pollack, Bluestone and Billingham October 2010, 13 Enterprise, The National Housing Trust, Reconnecting America 2010 54 TXP, Inc. and Gateway Planning Group, Inc. 2011, 3 55 Pollack, Bluestone and Billingham October 2010, 51 56 Sacramento Area Council of Governments 2008 57 The City of Chicago's Official Site 2012 58 Federal Grants Wire 2012 59 Downtown Austin Alliance 2011 60 Downtown Fort Worth 2012 61 Centro San Antonio 2012 62 City of Flagstaff's Housing Section 2009 53

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