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2006/05/31
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Visions of Austin
I've been meaning to comment on this story for quite some time now. Unfortunately, it's taken about 2 weeks to actually find the time to sit and jot the thoughts down. The story, which is split into 2 parts, reports that there is a Prop 2 "resurrection" movement afoot by SOS and the Council to take the best elements of the defeated Prop 2 and try to incorporate those as ordinances. Now, to me, this is certainly a fine idea and I think even the opponents of Props 1 & 2 agreed that something had to be done to protect the Barton Springs area. But, contained in the article is a quote from Council Member Lee Leffingwell (one of the most fervent anti-Proposition opponents) who disagrees with that idea:
"Not so fast, opponents say. On Saturday, 69 percent of voters cast ballots against the measure. So some neighborhood and business leaders say that those ideas have been roundly rejected and that more community input is needed to create a lasting solution to the vexing issue of development in the environmentally sensitive area. Council Member Lee Leffingwell, who crafted the ordinance, plans to slow the process and allow for a larger community discussion to take place. Input from interested parties as well as the two city bodies now considering the ordinance will provide the springboard for conversation."Now, some would argue (myself included) that the 69% figure used above is completely misleading. While the propositions may have been defeated by 69% that does not, by association mean that 69% of the people of Austin are against protecting the Barton Springs watershed. Most of the Prop 2 opponents had said that protection of Barton Springs is sorely needed but they just didn't agree with how the propositions sought that protection. The fact that 31% of the people of Austin still voted for the propositions considering the outright misleading ballot language is a strong indicator that the citizens of Austin really do value environmental protection over development in sensitive environmental areas. So now we come to Council Member Leffingwell's statements. On the one hand:
"These charter amendments were written behind closed doors with no public input, no vetting and no opportunity for changes to correct errors and unintended consequences," says Lee Leffingwell, an Austin City Council member who is former chairman of the city's Environmental Board."And now the other:
"Will you answer specifically which reforms you support and which you do not? I AM STILL IN THE DISCUSSION STAGE WITH REGARD TO WRITING THE ORDINANCE, AND SO CAN'T COMMENT ON ANY ASPECT OF YOUR SCORECARD AT THIS TIME."Pot, may I introduce Kettle... (More on that from a blog post by JS Hatcher). Also, looking around in Council Member Leffingwell's campaign finance reports, one notices that the only PACs that gave Mr. Leffingwell money during that election cycle all had something to gain by defeat of the propositions (granted, these filings were in the 2005 election cycle and the Open Government/SOS amendment campaigns were ongoing but probably not a campaign issue at the time):
- Austin Apartment Association
- Austin Board of Realtors
- Austin Police Association
- BOMA
- Homebuilders PAC
"presented an audit that found that Austin does not have an "overarching vision for growth" or anything that ties together a patchwork of smaller city-planning efforts."To which the City Manager took offense and disagreed with 3 of the 4 study authors by saying:
"In fact, the City has a vision and it is widely recognized. Our vision is for 'Austin to be the most livable city in the country.' "May I introduce Exhibit A against City Manager Futrell's claim. In the studies cited in the post, Austin ranks as the third highest cost of living in the country. Higher than traditional high cost leaders San Francisco (10th), Boston (9th), Chicago (8th) and Atlanta (4th). Austin has the 4th highest average house cost in Texas (behind Ft. Worth, Dallas and San Antonio) and ranks number 12 nationally for the highest average cost of the typical home in America. These are not exactly the most livable conditions in the country. Now, does city planning have anything to do with this rise in prices? As cited in this document, my guess is that the 29 now-under-construction-or-planned residential developments and super-condos being built on the shores of Town Lake, throughout downtown and in the ultra-swanky 2nd street area will only further inflate these cost of living indices (most have starting prices in the $200's for a 1/1). One can certainly make the argument that development should take place in downtown (I do support that) but of all the projects listed, from what I can tell, not one project is an affordable housing project. So I have to agree with City Manager Futrell here. She does have an "overarching vision" of Austin. Under her's and the City Council's leadership, they seek to make Austin unaffordable for most residents. They seek to transform the prime green spaces and park lands of Austin into multi-story, multi-million dollar condominiums, raising the cost of living while attempting to replace the few East Austin parks with nasty infrastructure plants needed to clean the crap out of the water from these lofty, rich residents and the eventual Dallas-like sprawl of SH 130. They seek to keep their vision of Austin planted in future city council elections by raising campaign contributions, creating slush funds and erasing term limits. Yes, Ms. Futrell, you and your Council Member friends have a vision for Austin. Unfortunately, it seeks to replace what some of us have come to believe what Austin is about and replace it with a miserably cloned vision of Dallas. I came from Dallas after 17 years of living there to Austin for the last 10, with most of that time in the Barton Hills area so I've seen the pace of change downtown under a close lens. I can't help but think that with the most developer friendly City Council in my memory along with the unification of former Council Members and Mayors against environmental protections for Barton Springs, it won't be long before we'll see the 580-ft towers being grandfathered in overlooking Barton Springs Pool.
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Sorry, but you're absolutely wrong on economics here. Even building nothing but luxury housing units will eventually relieve (some of) the pressure on moderately-priced housing stock, period.
The condo I own in Clarksville is one of those (currently appraised at 150K-ish; bought for 92K - both numbers are irrelevant; what matters is that the rent dropped from $1200 four years ago to $1050 the next year and hasn't made it back up to $1200 yet).
It doesn't matter that the NEW housing stock is 'unaffordable' - what matters is that it relieves (some of) the demand for other housing stock, which then gets lower in price. This is the only kind of trickle-down economics which actually works.
I keep saying (some of) because frankly the amount of downtown development so far has been pretty small. The new buildings being proposed (and especially the West Campus spurt) may finally be enough to make (some of) change to (most of), if demand for central housing doesn't further skyrocket due to other factors like oil prices.
"These are not exactly the most livable conditions in the country."
Depends on who is doing the living. I've been hearing this claim the entire 26 years I've lived in Austin, yet it hasn't stopped folks from relocating here ever since. Seems everyone says the city began costing too much soon after THEY moved here. Yes, it's getting expensive to live in one the most desirable places in the country. Live with it or move along. Progress marches on.
M1EK said,
<i>"New housing units, especially downtown, are never going to be cheap and hardly ever even affordable. That's the way the multi-family market works - properties generally get cheaper with age as newer, fancier, stuff gets built. (My condo in Clarksville, for instance, saw its rent drop a couple years ago and still hasn't recovered - partially due to the dramatic increase in supply of downtown housing taking pressure off the nearby midrange stock)."</i>
I agree with you here in general (but do disagree a bit below) but that does not invalidate the point I was making addressing Toby Futrell's claim that they are striving to make Austin "the most livable" in the country. One thing that needs to be mentioned is that "livability" is more than just property values. It's a summary, a perception or a snapshot of what the community is like for it's residents. I linked to multiple indicies that refuted Ms. Futrell's claim that their overarching vision is to make Austin "the most livable."
As for your partcular point, one way I look at it is with 20 buildings with 200 condos each (we'll work with a nice, even number) of the downtown developments going "luxury" (with properties starting at $200k and probably averaging over $300k), essentially, the Austin housing market is adding 4000 homes at $300k and over to the limited supply of new homes being built throughout Austin proper. This will not, in my opinion, lower the cost of "livability" here in Austin citywide. For example, adding 4000 luxury condos will do nothing to help the "livability" of those residents in East Austin and in fact, could lower the "livability" for those East Austin residents as our city council forces the unsavory infrastructure pieces into their backyards (I would think that property values would go down near a water treatment plant but I could be wrong about that).
As far as your example of your condo, I would argue that your property did not go down because of new condos being built downtown but because there were new properties in a similar price range coming to market all over town in other sought-after locations which led to the reduction in price due to greater supply of that resource in that particular price range. A $300k condo is not an affordable resource for most people (according to a few websites <a href=http://www.fool.com/homecenter/finance/finance01.htm>this</a> being one of them), if 29% of your annual salary is the maximum that most mortgage companies will allow for the loan, then the minimum you have to make yearly is $63k+ (I used a simple mortgage calculator to arrive at that: $300k x 5.7% / 30 yrs = $1,750/mo x 3 = $5250/mo x 12 = $63k avg yr salary which just happens to be right on Austin's avg salary). So, based on this logic, bringing these properties onto market will not lower Austin's "livability." At best, it will keep it at status quo which is against what Toby Futrell claimed is their overarching vision -- "to make Austin the most livable city in the country." (median income here in Texas based on <a href=http://www.census.gov/hhes/income/4person.html>census</a> stats is $54k/yr. Using the above formula, there would need to be a rush to market of properties averaged below $250k and below to pull the "livability" back and have Austin start moving down the "livability" list to make Toby's claim truthful.)
And Pat, I'm all for progress; I'm not one of those stick-in-the-mud curmudgeons that says the good ol' days are better than today. But what I am worried about is that Austin doesn't lose what defines Austin. In my opinion, Austin isn't about $500k condos in massive multi-million dollar towers, Ferrari's and massive office complexes over sensitive environmental areas (that's Dallas without the sensitive environmental areas...). I'm concerned that the change being brought on by the last few councils endanger those few things that define what Austin is as a city and why people do want to live here. I think most people would agree that one of the great things about Austin is that you can ride on your bike one mile from downtown and get on a trail that will take you to the boonies and away from the sprawl (I use that trail just about every day on my daily commute to work on my mountain bike). If we keep paving over the green spaces, Austin loses one of it's defining characteristics. It would be much like losing the live music outlets, UT or the bats under Congress. There are few things that define a city and in my opinion, based on some of the recent development decisions by the council, the path we're on seems to be endangering one of the qualities that define us as "Austinites."
Thanks to both of you for reading and I appreciate the comments. I'm planning to better clarify my points in a follow-up post but work calls now!
Oh, come on. Even if every single apartment being built downtown costs $5000/month, increasing the supply of ANY kind of housing in this area reduces the growth in cost of other housing units.
New housing units, especially downtown, are never going to be cheap and hardly ever even affordable. That's the way the multi-family market works - properties generally get cheaper with age as newer, fancier, stuff gets built. (My condo in Clarksville, for instance, saw its rent drop a couple years ago and still hasn't recovered - partially due to the dramatic increase in supply of downtown housing taking pressure off the nearby midrange stock).