Council Approves Three Homestead Preservation Districts

In addition to major votes on transportation network companies and lobby reform, City Council greenlighted measures to create and maintain affordable housing for low-income residents on Dec. 17. In a 9-2 vote, Council gave the go-ahead for the establishment of three new homestead preservation districts (HPDs) in East Austin. The specially qualified districts are a step toward reinvesting property tax to promote housing affordability, by either building or rehabilitating affordable housing. With stagnant wages, escalating living costs, and explosive growth, residents facing rising property taxes and the ongoing threat of displacement need the long-awaited plan more than ever, said supporters on the dais.

But it wouldn't be a discussion about affordable housing without Council Member Don Zimmerman stepping up to the plate with opposition. Deeming the plan a pathway to "institutionalized economic segregation," he and fellow conservative Ellen Troxclair voted against the measure. "I'm going to have to go to my District 6 constituents," said Zimmerman, "and tell them Council thinks other parts of the city are able to bear a higher tax burden for the benefit of one particular geographic area, and that's not going to go over well." (However, HPDs do not establish new taxes or increase existing taxes on other residents.)

Moreover, the district boundaries were selected precisely because they are suffering from institutionalized housing segregation, exacerbated by rapid gentrification; the preservation plan is an attempt to protect residents from getting priced out and displaced from their communities. The areas are some of the most impoverished: For an area to be eligible, its residents must earn less than 80% of the city's median family income ($50,938) and experience a poverty rate at least double the city rate, according to the Neighbor­hood Housing & Community Development department. Overall, low-income families in Austin face a shortage of 48,000 affordable housing units.

CM Pio Renteria, who heavily championed the creation of housing preservation districts on the campaign trail, sought to correct his colleague, saying the measure is actually intended to promote economic integration. "This tool came about because of gentrification," he said. "It's meant to help people stay in the inner city so they don't have to move out of town .... It's about preserving neighborhoods. That's why we have worked so hard over the years to create these districts so that minorities are not being displaced out of their neighborhoods." CM Greg Casar suggested expanding HPDs to include areas farther southeast and north during upcoming Housing & Community Development Committee meetings. And Mayor Pro Tem Kathie Tovo noted that she'd like to see an HPD in the UT-Austin area (though staff has recommended against that since students' reported income doesn't necessarily reflect their actual resources to meet housing costs.)

The districts are roughly a decade in the making – state Rep. Eddie Rodriguez, D-Austin, passed legislation in 2005 to establish a funding mechanism for them. He described the Council vote as a "personal victory" and a meaningful tax-reform measure for affordable housing. "Ten years after I first passed legislation to allow cities to create homestead preservation districts, our City Council has set the wheels in motion for long-term affordability options for Austin residents," he said in a statement. "Now, rising property values can actually benefit low-income Austinites."

Council also approved three related measures, including increasing the amount of property-tax revenue from development built on formerly owned city property dedicated to the Housing Trust Fund, committing those funds to affordable housing, and creating a taxing zone in the one (already existing) HPD in central East Austin (established in 2007) that should pull nearly $6 million into affordable housing investment. (Troxclair and Zimmer­man also voted against that ordinance.) Altogether, the four votes directed roughly $47 million in future property tax revenue toward affordable housing over the next 10 years.

Austin's New Homestead Preservation Districts

• Three new homestead preservation districts will join the existing District A.

• District B is bounded by I-35 and Parker Lane to the west, the Colorado River to the north, U.S. 183 to the east, and East Oltorf and Highway 71 to the south.

• District C is north of the Colorado River, east of Springdale Road and Airport Boulevard, and extending north to Oak Springs Drive.

• District D is located on either side of the intersection of Cameron Road and U.S. 290 East.