Austin Contrarian

My take on Edwards Aquifer Authority v. Day

I don't think this characterization by Adam Schwitters at Burnt Orange Report of the Texas Supreme Court's decision in Edwards Aquifer Authority v. Day is right. In particular, I don't think the opinion means that "aquifers and other groundwater features are not treated as a public resource" or that "our limited stocks of groundwater . . . are now subject to the whims of landowners who happen to own property over these features."  

Here's my bird's eye view of the opinion: 

The Edwards Aquifer was being depleted through overuse, so in 1993 the Texas Legislature created the Edwards Aquifer Authority to manage the aquifer.  The Edwards Aquifer Authority Act requires everyone to get a permit from the EAA to pump water from the aquifer (with limited exceptions).  The EAA cannot, by law, permit more than 542,000 of acre-feet of water to be pumped from the aquifer per year.

The issue in Day was, How should the EAA divvy up the permits? There are an infinite ways to do this, but the EAA Act settled on about the dumbest system possible: it assigns water rights based solely on prior use. Hence, a landowner who drew a lot of water in the past gets more water going forward than a landowner who drew just a little water in the past.  

That might sound fair at first blush -- if we're going to ration water, we don't want to cause unnecessary hardship by cutting people off from their supply of water -- but historical use does not require that the use be a current use; the use might have been abandoned a decade ago.  What's more, these permits are transferable, which means that what the EAA is really handing out is the right to a future stream of income. 

So imagine two adjacent 100-acre tracts.  One tract has always been used for cattle ranching and has always drawn a modest amount of water per year. The other tract also has always been used as a cattle ranch except for a five-year period in the mid-1980s when the owner's idiot nephew talked him into trying to grow watermelon and watercress and they pumped 1,000 acre feet per year from the aquifer. The venture failed miserably. But under the EAAA scheme, that five-year span entitles the tract to a huge amount of water in perpetuity while the other tract gets shut out, except for a small amount to water the cattle.

From an equity standpoint, that's a pretty strange system -- the people who were the greediest and most profligate users in the past get the most going forward. And it's an idiotic system from a policy standpoint -- if landowners know in advance that that's the rationing system that will be put in place, they have an incentive to draw as much water as possible to establish high historic usage rights. The common-law rule of capture encourages waste, not conservation, and using it as the basis for a rationing system was . . . unwise.

I do not read Day to hold that the EAA or other groundwater conservation districts cannot cap groundwater withdrawals. On the contrary, the Court said they can.  Nor do I read Day to require EAA or groundwater conservation districts to compensate landowners when they restrict groundwater withdrawals. Rather, I think the Court "merely" held that if the state misallocates water rights among landowners -- by, e.g., allocating water based solely on historic use -- then it might owe some landowners compensation for a takings. 

I put "merely" in quotes because the opinion has created a lot of uncertainty. What permitting system would not subject the state to takings claims? The Court doesn't say. The Court did not even hold that Day has a valid takings claim -- it remanded that to the trial court to determine based on the notoriously vague regulatory takings standard.  Can the EAA permitting system be reformed by the Legislature without subject the state to claims by existing permit holders? Dunno. Will the case generate a lot of takings claims from landowners? Likely, although it's unclear what they'll have to show to perfect a claim.

The EAA permitting system is now a mess. No question about that. One can certainly argue that rectifying the EAA's unwise water permitting system is not worth this mess. On a positive note, though, this will be the last time that water rights are handed out solely on the basis of the principle, "The most to he who used the most."

The risk to building before a final decision on your neighbor's appeal

Account of the demolition via Massachusetts Land Use Monitor, with full background here.

Try the Mueller houses here

In Austin, a lot of the fights over density are really fights against having students nearby. I understand perfectly most homeowners' desire not to live next door to a raucous party house full of college kids. I didn't particularly enjoy that even when I was 19 (when I actually lived in a raucous party house full of fraternity brothers).

But, as a practical matter, there is a limit to how much the City should do -- or even can do -- to control where and how people live.

Take the Old West University Neighborhood Association's protest of a duplex planned for David Street. The homeowners there are worried they'll have to contend with two  duplexes overstuffed with boisterous college kids. To block that, they're pushing what I think is a bad interpretation of City code which could have harmful, unintended consequences and which would make duplexes a less appealing option for developers throughout Austin.

It's natural for homeowners to want to maintain the kind of housing stock in their vicinity that will be less appealing to packs of college kids.  But we, as a city, have to decide when this makes sense as a matter of policy and when it doesn't. College kids have to live somewhere, and neighborhoods close to campus make the most sense for them.  

When should we adopt regulations designed to deflect college students somewhere else and when should we adopt regulations to accommodate them? That's a debatable question. But that's really a debate about how to handle neighborhoods on the cusp of a transition. It is not a debate for a neighborhood that has already made the transition. Once a neighborhood has converted from mostly owner-occupied, single family housing to mostly rental student housing, we should stop devising regulations to deflect the students somewhere else and start planning how to accommodate them.

It turns out that students have more or less claimed OWUNA. 

You might want to rethink this

Here's a neat idea from a local neighborhood association: let's incentivize the elimination of emergency escape windows in duplexes.

The Original University Neighborhood Association is challenging the city's approval of a duplex on David Street. The neighborhood contends the duplex is an illegal "superduplex" because it contains too many bedrooms. The plans show just three bedrooms per unit, the legal maximum, but each duplex contains two other rooms the neighborhood says could be used as bedrooms.

The problem is, how do you decide whether a room is a bedroom? The neighborhood complains the city just reads what's on the plans.

According to In Fact Daily (gated), the neighborhood association president is proposing a firmer definition:

She argues that such a space "could be reasonably defined" as "any room that meets the definition for habitable space . . . and meets the minimum area requirements . . . and is a private space or can be made private by the addition of a door . . . and has an outside door or window which meets the minimum requirements for emergency escape."

Zaragoza further explained the idea to In Fact Daily.  She turned to the example of a study. She suggested that "it makes sense" to have a door that closes in a study, and that a potential remedy, under her proposed rules, would be to have a window that "would bring in light but that would not necessarily meet the egress requirements for a bedroom."

Any room big enough to be used as a game room or living room would be big enough for a bedroom, so a minimum area requirement is useless for discriminating between bedrooms and other rooms.  And, as Zaragoza notes, doors are useful things to have in all kinds of rooms. So the crux of the neighborhood's proposed definition really is, "Eliminate the emergency access."

Because we know that no college student will use a room as a bedroom unless it has an emergency escape window meeting city code.

So suppose, God forbid, someone dies in a duplex fire because he couldn't get out a window.  When the newspaper reports that city code limited the number of emergency escape windows in the duplex, would the city's response really be, "He must have been using the room as an illegal bedroom. Serves him right."?

Again, environmentalists shouldn't bash Austin's steep water prices

Austin environmentalist Paul Robbins is pushing a report (pdf) he's drafted that bashes Austin Water Utility's water and wastewater fees.  I have a certain amount of respect for someone who takes the time to write a 37-page, single-spaced report on water pricing policy.

Paul makes a number of criticisms, most of which I have no desire to engage.  He might have a legitimate complaint that Austin's wastewater prices are too high, for example.  And he criticizes AWU for not maximizing the value of its extensive property holdings.  His ultimate point, I think, is that AWU spends too much money (including, notably, on new capital projects like WTP4).

But front and center is his complaint that Austin residents pay too much for water.  This is just a complaint no environmentalist should make.

Paul encounters a problem at the outset in choosing a methodology for comparing water rates.  Most cities use tier pricing, so your average cost rises the more you use.  One way to approach this would be to calculate the average Austin customer's consumption (he says its 8.1 thousand gallons per month) and then compare his bill to what other cities charge for the same amount of water.  Another approach would be to do the same calculation using monthly averages (he says in Austin, the average varies from 5.2 thousand gallons in February to 11.6 thousand gallons in September), and then average the totals.

But Paul doesn't like this approach because Austin has steeply progressive rate tiers, and people who use an average amount of water never pay the highest rates.  He therefore calculates gross revenue per 1,000 gallons, which he calls a "weighted" approach.  This methodology, he says, shows that Austin charges too much for water, whether compared to other large Texas cities or to Austin's suburbs.

Austin's water is indeed expensive using this methodology, but mainly because Austin charges heavy water users high prices.  Complaining about water's high "average" price, under this methodology, thus boils down to complaining that we're charging heavy water users too much.  

Let's compare Houston and Austin.  72% of Austin's customers use an average of 9,000 gallons or less per month.  Under Austin's water rate structure, a residential customer who uses 9,000 gallons per month pays $35.40 (including the flat connection fee of $11.50).  A Houston residential customer pays $37.30 per month (including the flat connection fee for the smallest meter).  Austin's water is not the most expensive in Texas if you are an average residential customer.  

But a heavy water user in Austin (20,000 g/month) pays $137.67, while the equivalent Houston water user pays only $100.93.  The small percentage of heavy water users paying steep prices inflates AWU's average revenue per thousand gallons.  According to Paul, the top 13% of Austin's water users use 41% of the residential water and contribute 52% of the gross revenue.  Austin can bring its average residential water rates down by charging profligate water users a lot less money.  But why in the world would an environmenalist argue that heavy lawn watering should be less dear? 

Or consider his chart comparing Austin to its suburbs:

He claims that Austin collects more revenue per thousand gallons ($5.29) than its suburbs, but this is only true in the aggregate.  Several of them -- Elgin, Hutto, Kyle, Lago Vista, Leander, Lockhart, Plugerville and San Marco -- collect more revenue per thousand gallons than Austin.  The weighted average is lower than Austin's mainly because the biggest suburb, Round Rock, charges heavy water users so little.

By my calculation, the average Austin water customer actually uses 8.8 thousand gallons per month (perhaps Paul's 8.1 thousand is a median).  That customer pays $34.78 (including the flat connection fee).  A Round Rock customer using the same amount of water pays $34.52, virtually the same price (assuming the smallest meter size).

But heavy water users in Austin pay a bunch more than heavy water users in Round Rock.  20,000 gallons/month costs you $137.67 in Austin, but only $60.84 in Round Rock, because Round Rock charges a low rate no matter how much water you use.  (Round Rock has bravely implemented a "block rate" structure in the summer to encourage conservation, which ratchets the cost for 20,000 gallons all the way up to $62.02.)  It should thus be no surprise that Round Rock collects substantially less revenue per thousand gallons than does Austin.  

And it should be no surprise that, given this rate structure, the average Round Rock customer uses substantially more water per month:  11.6 thousand gallons per month, or 31.8% more than the average Austin customer.

So what does Robbins really think Austin should do?  Charge really low rates to really heavy residential water users, like Round Rock does?  He'd better spend his time, I think, urging Round Rock to raise its rates.

Austin has a highly rational water pricing system.  It is a system designed to encourage water conservation. We know, from many water pricing studies, that consumers do use less water when they're charged higher prices.  We also know that persistently high prices encourage consumers to make long-term investments in conservation, whether buying rain barrels or putting in drought-resistant plants. 

This system may yield a lot of revenue, because the "ration" price of water has little to do with the operational cost of delivering it to the user's home.  But we should view that excess revenue as a perk of a wise pricing system.  The excess revenue come from heavy water users, who are essentially subsidizing sidewalks and libraries and other things through AWU's transfers to the general fund.  Environmentalists shouldn't be complaining about that.

Mueller houses

I like the variety of housing types at Mueller (although I'm not crazy about the ratio of single-family to multi-family). These in particular illustrate a kind of housing Austin needs:

These are four-plex condominiums on Symond called "Mueller Houses."  The buildings have a single front entrance; the individual condos open off a common vestibule.  The units have individual, one-car garages accessible from an alley in the back.

This is a six-plex:

Calling these "Mueller houses" rather than "four-plexes" or "six-plexes" is a clever bit of marketing, but it is also in a sense accurate marketing.  These four-plexes and six-plexes look like houses. They illustrate that it is possible to build small multi-family buildings that will blend seamlessly into a block of single-family homes.

These are actually a good bit larger than you could build on a typical central Austin lot given current regulations (the Mueller house units are quite roomy, ranging from 1,300 to 2,400 square feet).  But you could build "Mueller hosues" half that size and still have room for four modest-size apartments.

Austin doesn't leave much room on the zoning maps for this niche, which is a shame.  I am partial to this type of housing because I lived in a four-plex like this for a few years out of law school.  It was an 80-year-old, Tudor-style house in an old, central neighborhood in Jackson, Mississippi a lot like Austin's Hyde Park.  I could not afford to buy or rent a whole house at the time, at least not where I wanted, and I frankly didn't need a whole house.  But I didn't want to live in a big apartment complex.  I wanted to enjoy living in this quaint, leafy old neighborhood, close to work, without having to buy.  My four-plex gave me that chance.  I loved it.

The tenant across the little vestibule from me was a school teacher who had lived there for years before me.  She couldn't afford a house in the neighborhood either, and, again, didn't really need one.  The ground floor tenants were a rotating cast of young professionals.  We parked in the back or (like many of our neighbors) on the street.  There was never a problem with noise or parties or trash.

Why not allow these as a matter of right in SF-3 zoning? We have a shortage of small, affordable apartments in Austin.  These units would likely be cheaper than the new multi-story, mixed-use apartments being built on commercial arterials.  And a lot of people would like to live in the interior of, say, the Zilker or Hyde Park neighborhoods, but are priced out.  Frankly, a single-family home shouldn't be the price for admission to these neighborhoods.  

Mueller houses eliminate the aesthetic objection to small, multi-family buildings.  It's possible to build four-plexes that look simply like nice homes.  Adopt some reasonable design regulations, like requiring a common front entrance and exit and parking in the rear.  It's not that hard.

Lots of people would worry about noise, of course, but without cause.  This kind of housing would really appeals to young professionals, secretaries, teachers, and others in the large Austin demographic of "nice, quiet people who would like to live in a pleasant old neighborhood but can't afford a whole house."  And having a single-family home next door is no bulwark against noisy neighbors, anyway.  I would prefer living next to a four-plex than to a single-family home rented out to a group of college students.  When you live next to a four-plex, your first lines of defense against a noisy tenant are the tenants in the other three units.   When a group of college students rents a house together, the nucleus for a cool party is always there.

If we're really interested in "workforce" housing, we should make more room for these houses outside Mueller.

 

Facebook

I don't like Facebook, but a lot of other people do.  I've created a page for this blog.  I'll cross-post my entries there.  For now.  Like I said, I don't like Facebook.

Real urbanism is rare

Back in 1998, Cedar Park adopted a comprehensive plan that set aside 42 acres of land along Highway 183 for a mixed-use, village-like town center.  They imagined something like this:

The plan called for the city hall to be built there to anchor the town center and for the rest to be filled in with apartments and boutique shops.   But in 2007 the city voters turned down a tax hike to build the city hall there, settling on a cheaper location that had existing buildings.  

The plan was approved in 2001 and has been updated since, but the large tract of land lies fallow.  D.R. Horton owns the tract and has been seeking PUD zoning that would allow it to break from the boutique-shop plan and build something more like a generic shopping center.  This upset a bunch of the people who bought near the tract on the assumption that it would be a new-urbanist village.   Their protests have evidently worked, for now, because D.R. Horton has taken down its rezoning application.  

I don't blame the folks for wanting a quaint, urbanist town center.  But, honestly, the kind of thing they want is really an urban kind of thing, and is very hard to grow in a cow pasture.

Here's the economics:

There are no buildings in the town center today.  Everything must be built from scratch.  That means the retail must be built from scratch.  And new retail space in a mixed-use village is just as expensive, if not more expensive, to build as retail bays in a new shopping center.

No one's going to build that retail space unless they get the rents to make it worth their while.  And in order for the small shops they have in mind to generate the necessary rents, there must be a lot of traffic.  The kind of traffic this area will never generate on its own -- there are no significant job centers nearby, and there is no chance that the center will develop the residential density that could sustain a retail district by itself.  The town center doesn't even sit astride a major arterial, so drive-by traffic is out.

There's simply nothing to generate the kind of traffic retail would need to pay the rents to justify the construction cost . . . unless they were to build a lot of retail, with anchors to ensure a steady stream of traffic, and a lot of parking for all those cars.  But that's a shopping center, not a town center.

And, in fact, while the "town center" has sat, forlorn and vacant, on the west side of Highway 183, a nice, new shopping center has been built directly to the east:

And I mean "directly" -- the town center is marked in red:

All that parking is incompatible with an urban village, of course.  And that's the challenge: to build a mixed-use town center in a greenfield on the edge of town, you must solve parking.  Unless you do, you won't get retail.

One way to reduce the need for parking is to subsidize the retail rents in the town center.  In many vertical mixed use projects, residents subsidize the ground floor retail.  But people won't pay that kind of premium for housing in Cedar Park.

Another possibility is to build a lot of structured parking.  But the parking structure has to be publicly subsdized, because otherwise the shopping center would earn a lower return than all the shopping centers that simply build surface parking.  Let's see . . a compact, suburban shopping center, mixed with condos and housing, backed by structured parking.  We know what that looks like.  That's the Domain, a mixed-use village, heavy on the high-end retail, with expensive structured garages subsidized by the city of Austin.  The Domain barely survived a referendum by Austin voters to kill the subsidy a couple of years ago.  If the residents of Cedar Park aren't willing to tax themselves to build themselves a fancy city hall, they're certainly not going to tax themselves to build structured parking for a mixed-use shopping center.

These aren't the only ways to handle the problem.  But it's just a cold fact that greenfield mixed-used retail is very hard to pull off.  Mueller has a lot more going for it, both in terms of resources and local population density and employment, and its town center still has not broken ground.

The take away should be that places that support a compact, walkable, mix of housing, retail and offices -- i.e., urban places -- are actually pretty special.  There are just a few such places in the sprawling Austin metropolitan area.  They are places with either high employment density (downtown) or high residential density (UT/West University), or places that grew up organically along busy commercial arterials (South Congress and Guadalupe).  Some of Austin's older neighborhoods are blessed with a sort of small-bore urbanism -- little clusters of old stores and restaurants that no one got around to tearing down. 

Not everyone likes that.  But given their scarcity, it makes a lot of sense to let the few urban places in town be urban, and to make room for the people who do like that kind of thing.  There are plenty of neighborhoods in the Austin metropolitan area with no traffic or street parking or noise or bustle.  Most of Austin's neighborhoods are like that, in fact.  It's a waste to force that model onto the neighborhoods that have the natural ingredients for urbanism.

A path to 20%

Cap Metro is touting its January ridership for the Red Line: it gave 32,000 rides last month, a 57% increase over January 2011. Cap Metro confesses, though, that it is recovering only 3.1% of its operating costs from fares. That’s dismal. As is its $33.98 subsidy per rider. But Linda Watson assures us, “We're running the agency like a business, we're making some good, tough decisions to make sure we're strong--not just today, but well into the future as well."

A 3.1% farebox recovery ratio and $33.98 per rider subsidy are simply unacceptable. What we need from Cap Metro is, as Watson promises, business-like behavior. This means a business plan for raising the FRR and reducing the per-rider subsidy for the Red Line. What I’d like to see, in particular, is a configuration of schedule, ridership and fares that gets the FRR up to 20%. Cap Metro knows what it costs to operate the trains. It should be able to write down some schedule, ridership level and fare structure that produces the necessary revenue. Or it should tell us there isn’t one; that’s something the public needs to know if true.

I normally would assume that there is some path to 20%. Trains are a high-fixed-cost but low-marginal-cost business. The marginal cost of carrying another passenger on a train that will be making a trip anyway is approximately zero (until you reach capacity). The marginal cost of adding another round trip should also be low, assuming the train would otherwise be sitting idle: I imagine the per-hour cost of an operator’s time is pretty low, and a train surely doesn’t use that much fuel for a 64-mile roundtrip. So the path to higher FRR should be a straightforward one of adding more fare-paying riders.

I’m not sure this is right, though. I say this based on the cost estimate Cap Metro quoted the city for adding Friday evening and Saturday service. It worked out to around $40,000 per weekend. If you assume an extra 40 runs per weekend, that works out to $1,000 per one-way, hour-long trip. Cap Metro reported an operating cost of $1,300 per hour in its last quarterly report (which you can find here), so this seems to be the right ballpark. (I don’t know why it costs Cap Metro so much. Cap Metro actually contracts with Herzog Transit Services to operate the train, so the costs, whatever they are, are built into that contract.)

We need to know if there is a path to a more reasonable FRR and per-rider subsidy, though. We need to know this because we ultimately have to decide on the optimal level of service for the Red Line. If there is a schedule, ridership and fare structure that gets the FRR up to a reasonable level (which presumably would entail a substantial boost to ridership) then that should be Cap Metro’s goal. But it might be that, given Cap Metro’s current cost structure, there is no ridership level or fare structure that will cover an acceptable portion of the operating cost. Perhaps the very best case scenario is that Cap Metro can bump the FRR to 10% only by tripling its annual operating loss. If that’s the case, then we don’t want Cap Metro to maximize its FRR, but rather to minimize its operating loss, conserving money for buses. That would mean sticking to a light schedule.

Either way, mere ridership numbers don’t tell us what we need. We need a plan.

Just admit you overreacted

I'm sure most of you read Scott Henson's account the other day of being stopped, detained and handcuffed by the Austin Police Department while walking his granddaughter home from the skating rink.   

This kind of thing is well outside my wheelhouse and so I had no intention of piling on APD.  I thought APD overreacted badly and showed poor judgment.  And I expected it to make some sort of public statement of  . . . not remorse, exactly, but at least acknowledgment that it had caused this man and his granddaughter unnecessary distress. 

But instead APD has doubled down, and is defending its overreaction as the sort of reasonable and appropriate response it must make to any suspicion of child abduction:

[APD spokesman] Hipolito said that a staff member at the Millennium Center called 911 about 7:50 p.m. Friday reporting a possible kidnapping.

That caller said a white man took a black female child and ran into the woods, Hipolito said. Several staff members left to go look for the man, presumably Henson, and police responded quickly, Hipolito said.

About 10 officers were dispatched, along with a helicopter and a K-9 unit, he said.

Hipolito added that kidnapping suspects may be related to their victims. He said that officers detained Henson and his granddaughter, separated them and called the girl's mother to verify their relationship.

"You have to investigate to determine if the grandfather is supposed to have the child," Hipolito said. "To me, he's making it into more of a racial thing.

This doesn't justify the handcuffing.  And it is utter bullshit anyway.  If there had been a report by a family member that the child was missing, then of course the police should have checked with the mother.  But this incident was triggered by the report of a random stranger, which amounted to little more than "I don't think that little black girl belongs to that white man."  Once the deputy constable and APD had verified that Scott was the girl's grandfather, and thus was a plausible custodian, that should have been the end of it.   Or does APD really contend that it is SOP to detain and handcuff any adult escorting his granddaughter, niece or cousin until the child's mom can be gotten on the phone?  What was lacking here was a reasonable suspicion that Scott had improper custody of his granddaughter.

APD should just admit it overreacted.

(I also blame Nancy Grace.)