Industry Update

NAVIGATING LEGISLATIVE AND LOCAL ORDINANCE CHANGES: WHAT YOU NEED TO KNOW

BY CARRIE SMITH

The Austin Apartment Association (AAA) is currently navigating a landscape characterized by a series of legislative and policy shifts, which carry implications for the multifamily housing sector in Austin and the surrounding areas. From preemption legislation to mandatory composting, budget allocations, and the evolving Repeat Offender Program (ROP), let’s dive deeper into these recent developments that directly impact AAA and its members.

HB 2127: Texas Regulatory Consistency Act

House Bill 2127, known as the “Texas Regulatory Consistency Act,” was a significant legislative milestone that aimed to establish uniformity in regulatory provisions across the state. This transformative law explicitly restricts municipalities and counties from enacting or enforcing ordinances that are at odds with state laws. Notably, it includes a provision that affects eviction regulations, preventing local authorities from extending the eviction process beyond the guidelines set by the state. Therefore, an ordinance adding seven days to the eviction process has been void and unenforceable as of September 1, 2023. In a case brought by the city of Houston challenging the statute, a district judge declared HB 2127 unconstitutional, but its enforcement remains active in cities that were not enjoined in the lawsuit (including the city of Austin.) The Texas Attorney General’s Office immediately appealed the recent ruling defending HB 2127.

To read more in-depth and to keep up with the latest, visit austinaptassoc.com/news.

MF Composting Ordinance Changes

Effective on October 1, 2024, the Austin City Code (Chapter 15-6) underwent amendments affecting all properties with five or more dwelling units. These amendments mandate that such properties must ensure that residents and employees have access to composting services that include the collection of food scraps (including meat, bones, and dairy), food soiled paper, and products certified by the Biodegradable Products Institute (BPI) as compostable. Furthermore, existing education requirements mandated by city ordinance will remain unchanged, except that “recycling information” will be replaced with “landfill diversion” information. Complementary revisions to Austin Resource Recovery’s Administrative Rules (Chapters 8 and 11) will introduce Capacity Performance Standards. These standards will necessitate that Responsible Parties guarantee that on-site composting services are sufficient to accommodate the regular accumulation of organic materials while preventing overflowing containers. Specifically, a minimum of one gallon of composting capacity per dwelling unit per week will be required. Additionally, the rules will stipulate that a minimum of one recycling container, and where applicable, an organics diversion container or other collection point, must be located within 25 feet of all landfill trash containers.

AAA has extended an invitation to Austin city staff to serve as the primary speaker for an upcoming webinar focused on the MF Composting Ordinance. This will be an opportunity to ask questions and give feedback! Stay tuned for updates on this event!

City Budget Allocations Impacting Multifamily Communities

The City of Austin adopted a substantial $5.5 billion budget, featuring several provisions that directly impact multifamily residents and property owners. These provisions include:

• Multifamily CAP Program: In fiscal year 2020-21, Austin Water introduced the Multifamily CAP program. This initiative benefits low-income customers who lack dedicated water meters but still pay for monthly water and wastewater services. It provides a $17 monthly credit on their Austin Energy utility bills, represented as the Austin Water Multifamily CAP Program Discount.

• Tenant Stabilization Funds: An allocation of $1.6 million dollars has been earmarked to address tenant stabilization concerns.

• The Little Walnut Creek - Jamestown Tributary Erosion and Drainage Improvements project, with a budget of $10.8 million, will commence construction in mid-fiscal year 2023-24. This project’s significance extends to safeguarding private properties, parking lots for multifamily and commercial properties, the Thurmond Street culvert, storm drain outfalls, utility poles, and trees.

• Austin Police Budget Information: The overall Austin Police budget (APD) budget has seen an increase of $38,757,871, with a particular focus on the Neighborhood Based Policing Budget, which received an augmentation of $25,567,180. This allocation represents nearly half of APD’s budget for the fiscal year 2023-24. The Neighborhood Based Policing strategy employs directed patrols and tactical teams to supplement regular patrols, thereby addressing ongoing crime issues. This approach also includes Patrol Support, which encompasses district representatives and detectives, commonly used in crime reduction and prevention strategies. Additionally, community engagement time for patrol officers has been emphasized to facilitate proactive policing and strengthen relations with the communities they serve.

Tenant Notification and Relocation Amendments

In 2022, City Code Title 25 underwent significant revisions, emphasizing tenant notification and relocation during multifamily property redevelopment or demolition, with a mandated 120-day notice to residents facing displacement due to property redevelopment. The initial ordinance allowed notifications to be sent simultaneously with the city permit application.

Fast-forward to August 2023, Austin proposed extending these rules to unpermitted redevelopment, requiring a 120-day notice prior to filing an application. Initially, the proposed changes also demanded signed notifications from ALL residents before a redevelopment application could be filed with the city.

However, upon public release, AAA collaborated with city officials to streamline the ordinance language, removing the need for signed notifications from all tenants and instead refocusing it on those facing displacement due to redevelopment. This adjustment aims to reduce potential delays and maintain positive property-manager relationships with residents.

Additionally, thanks to a newly passed state law (HB 14), the once-worrisome 120-day notification before application filing, replacing the previous concurrent notification, no longer posed significant concerns for delays as feared by AAA. HB 14 introduces clear guidelines, mandating building permits issuance within 15 days of filing by cities and counties, with the potential for third-party review if this timeline is not met, ensuring a smoother permit issuance process.

The Challenge of the Repeat Offender Program (ROP)

The Repeat Offender Program (ROP) was initially established in 2013 and underwent substantial revisions in 2014. Currently encompassing approximately 91 properties and 17,100 units within the city, the program was initially designed to address pressing health and safety concerns in multifamily properties. However, over time, the ROP has expanded and become increasingly onerous, leading to operational challenges and unintended consequences that necessitate attention and resolution.

• Property management companies, both new and existing owners, have expressed frustration with the program. Key points of contention include:

• Inability to Remove from ROP: Property owners find it challenging to extricate themselves from the program once they are enrolled, leading to longterm obligations and oversight.

• Intrusive Inspection Practices: The ROP inspection process has raised concerns, including reported door-to-door visits by code inspectors to solicit violations.

• Resident Reporting Campaigns: Campaigns directed at residents to report maintenance issues to the City instead of the property’s ownership or management have emerged as a point of contention.

• Vacant Housing Units: Due to the city’s suspension and revocation procedures and enforcement escalation actions taken, there have been instances of rental housing units in Austin remaining vacant.

Seeking Feedback and Revamping the ROP Program:

Considering these challenges, AAA recognizes the need for comprehensive feedback to revamp the ROP program effectively. AAA’s Government Affairs Director, Carrie Smith, has called upon affected parties to share their experiences and insights to carrie@austinaptassoc.com. Specifically, AAA is interested in gathering information on the frequency of property inspections, financial burdens incurred due to fines and fees associated with the ROP, the number of units rendered offline because of the program, details regarding code violations, and – most importantly, suggested improvements and solutions to remedy the unintended consequences of the ROP.

Thank You for Being an AAA Advocate!

The multifamily and residential rental housing industry is navigating a complex and evolving landscape shaped by legislative changes, budget allocations, and regulatory programs. These developments underscore the imperative of continued engagement, advocacy, and data-driven feedback within the multifamily community. The active involvement and input of property owners and managers are paramount in shaping the future of multifamily housing in Austin and surrounding areas.

For more information about AAA’s advocacy in action, contact Carrie Smith, Director of Government Affairs at carrie@austinaptasscoc.com.