Austin Contrarian

Props to Council

City Council continues to show that it is serious about opening the core transit corridors to Vertical Mixed Use development by standing up to neighborhoods trying to wriggle out of the VMU bargain.

A couple of recent actions by Council are especially reassuring:

The neighborhoods in the East MLK Combined Planning Area asked to opt out all of their eligible tracts, most of which lie along Manor Road east of Airport Boulevard.  They offered the typical pretexts (pp. 8-9) -- e.g., lack of infrastructure (although citing chronically stopped up toilets was probably a first), increased impervious cover, inadequate planning and coordination -- while still managing to invoke New Urbanist guru Andres Duany as cover for their unambiguously anti-Urbanist stand.

Props to Council.  At its February 28 meeting, it voted 7-0 to retain VMU zoning on all of the tracts, and approved parking reductions and additional ground floor uses to boot.  (This was 1st reading only; 2nd and 3rd readings are on the March 20 agenda.)

Bryker Woods was not nearly as intransigent as the East MLK neighborhoods.  It agreed to leave most of its tracts in the VMU district, but asked to exclude seven tracts (mainly over worries about parking, from what I saw of the Planning Commission hearing.)  Council voted (6-0) to zone five of the seven tracts VMU anyway, and deferred the other two to its March 20 meeting. 

Council has decided that it is not a rubber stamp.

Not every neighborhood is an East MLK.  Some neighborhoods have embraced VMU unreservedly.  Not only did North Loop not ask to exclude any of its VMU-eligible properties, it asked to opt in several other tracts.  Some neighborhoods, at least, recognize that VMU developments will enhance their neighborhoods even as they provide additional room for multi-family development.

Condo conversions

One argument frequently trotted out against zoning for greater density is that it encourages the redevelopment of low-income rental.  But it is silly to believe that zoning can maintain the stock of affordable housing.  When rents lag behind home prices, owners will simply convert the apartments into condos. 

I'm aware of three condo conversions on South Lamar, one on Thornton (around the corner from my house), one off Oltorf, and one on South Congress.  There apparently are many more:

Last year, 824 apartments were converted to condos in Austin, from the downtown area to the suburbs. This year, 1,167 more units are expected to be converted in the Austin area, said Robin Davis, manager of Austin Investor Interests LLC, which tracks the apartment market.

That's a lot of low- to moderate-rental taken out of the market.  On a positive note, the converted condos are a lot cheaper than the new stuff being built.

I suppose Austin could take the San Diego/San Francisco/Berkeley approach of limiting condo conversions.  A saner approach would be to permit small infill projects that blend in with the neighborhood.  And lots of dense multi-family projects on transit corridors.  The stuff built today will be the affordable housing 20 or 30 years down the road.   

If you thought Kyle was bad . . .

try Sunnyvale, an eastern suburb of Dallas.

It faced a lawsuit similar to the one pending against Kyle.[1]  Here's the federal judge's description of Sunnyvale's set-up:

Nestled in the midst of towns defined by the shopping malls and dense apartment development for which the Dallas Metropolitan Area has become famous, Sunnyvale presents a stark contrast. It is a beautiful, rural, Texas town with almost 11,000 acres of rolling hills and green grassland and only 2,000 residents. Sunnyvale has no shopping malls and no apartment developments. The secret to Sunnyvale's success is its unusual zoning laws, including an outright ban on apartments and a one-acre zoning requirement for residential development.

The judge ruled that Sunnyvale's zoning had a disproportionate effect on African-Americans.  More damning, he ruled that the city had adopted the regulations with the intention of discriminating against African-Americans.

The judge was probably persuaded by citizen comments like this one, made at a zoning hearing on the town's first proposed multi-family project:

We'll build that fence up, we'll hold that gate there and as long as we can hold those Indians off, fine.  And, when they bust through then we pay the price . . . there's an over abundance of multi-family housing around here and we're not like that.  But, we're boxed in . . . personally, I'd rather not see any apartments or any cottage homes in Sunnyvale.  Period.

I've discounted the possibility that Kyle was actually motivated by race.  I suspect that's unlikely with fast-growing suburbs because they're less likely to be racially homogeneous.  But obviously, if the plaintiffs have turned up hard evidence of discriminatory intent, Kyle will be in real trouble.  The hit to its reputation would dwarf any impact on its zoning authority.

[1]Dews v. Town of Sunnyvale, Texas, 109 F. Supp.2d 526 (N. D. Tex. 2000).

Kyle's all-masonry housing ordinance has landed it in court

Here's a thought-provoking case:  The Home Builders Association of Greater Austin Inc. and the National Association of Home Builders Inc. have teamed up with the NAACP to sue the City of Kyle. 

In 2003, Kyle passed ordinances that increased the minimum lot size for single-family homes by 200 square feet, to 6,825 square feet; set a minimum of 1,200 sq. ft. for single-family houses; and mandated masonry exteriors.

Kyle officials say the ordinances were designed to slow growth in the wake of a spurt that has sent the city's population skyrocketing — from 5,314 in 2000 to 23,285 in 2007, according to estimates from the Texas State Data Center. The rules followed development moratoriums after sewer and water systems became overburdened.

"The passage of the ordinances that are at issue here today was just one more step that the city took once the development moratoriums were lifted in order to address those growth issues," Kyle's lawyer Bradford Bullock said.

The homebuilders and NAACP (strange bedfellows indeed) aren't buying it:

The trio of plaintiffs say the rules violate the federal Fair Housing Act because African American and Hispanic home buyers have been disproportionately pushed out of the local market.

"They raised the bar on every single district within the city," Michael Klein, one of the lawyers representing the plaintiffs, said in his opening arguments. "What they did was basically say, 'We're going to increase the cost of living in Kyle.' "

Klein is absolutely right.  Kyle is dead set on increasing the cost of housing there.

This is not necessarily an expression of bigotry, though.  Kyle is arguably attempting to cure a market failure, although clumsily.

A city like Kyle, which has no commercial or industrial base to speak of, can only fund its schools, parks, police and other city services with residential property taxes.  All of the homeowners have the right to share equally in these services -- the kids go to the same schools, everyone gets the same police and fire protection, etc.  The homeowners don't pay equal shares of the cost, though.   The more expensive the home, the bigger the homeowner's share.   

Duh.  That's always the case.  But a town like Kyle has plenty of undeveloped land.  That creates a problem for homeowners who want the town to provide a high level of service.  (Say, a well-funded high school someday.)  They can vote to fund high-quality services, but that makes the town more attractive to potential residents, including lower-income residents.  If the town attracts enough low-value construction, the new growth might actually lower the average property tax per household, thereby reducing the money available per capita to spend on services.   

This poses a dilemma for the original homeowners:  If they want to maintain the high-quality services they were initially willing to fund, they will have to raise their taxes because the city's per capita collections will no longer cover the bill.  If they don't want to raise taxes, then they must cut services, which is obviously a second-best solution.

The residents of Kyle have settled on a third option:  They have imposed what is essentially a minimum property tax by requiring that new homes have a minimum value.

I'll wager Kyle's attorneys don't put it this way in court.  I don't have a problem in theory with cities offering different levels of services, though.  When there are lots of suburbs offering lots of variety, home shoppers can pick the city that suits them best.   (Urban economists call this Tiebout sorting, after economist Charles Tiebout, who proved that fragmented suburbs could generate efficient levels of government under certain conditions.)

Zoning is a pretty clumsy tool, though.  Minimum lot sizes, home sizes and all-masonry construction all impose tremendous inefficiencies of their own.  Among other things, they reduce the options available to prospective homeowners who are willing to pay for the services but who don't want the standard suburban set up.  It would be much more efficient simply to charge an impact fee to cover the homeowner's share of fixed costs.  That's hard to do under Texas law, though.

I've also got a problem with using zoning to cartelize the supply of housing to push up the current residents' land prices.  That shouldn't be the case in Kyle, though.  There's lots of land around Kyle, and no natural amenity that makes the land in Kyle more attractive than in another town.  The citizens of Kyle, in other words, don't have the market power to raise their land value through zoning (as opposed to the structure value).

None of this addresses the lawsuit's claim, which is that Kyle's ordinance has a disproportionate impact on minorities, which is almost certainly true.  That's not the end of the analysis, because the law tolerates some facially-neutral ordinances even when they have a disproportionate impact.  If Kyle loses, enjoy the ensuing firestorm.  I imagine even Austin would end up getting scorched.

Zilker's VMU application, part II

An open letter to City Council, my belated response to this Chronicle piece:

Dear City Councilmembers:

I note that the Zilker Neighborhood Association has discovered a "good eats" exception to VMU zoning.  It has asked to opt out more than 70 of its eligible parcels, largely for the sake of "beloved" restaurants and other preferred local establishments.  (I couldn't help but notice that the "beloved" restaurants are especially likely to sit near single-family housing.) 

Before basing major zoning decisions on the quality of the Tex-Mex, please consider this:

The Zilker neighborhood is almost completely built out under current zoning entitlements.

According to the City's residential acreage data (pdf), a paltry 11% of the Zilker neighborhood's residential property is zoned multi-family.  Only 2.6% is zoned at the reasonably dense MF4 or MF5 levels. 

These multi-family parcels are nearly maxed out. According to data collected by the city demographer, ZNA had 933 occupied multi-faily units in 2005, or roughly 1,000 total units (assuming a reasonable vacancy rate).  Using the residential acreage data above, the City's minimum site area standards, and a reasonable assumption about the mix of one-room and two-room apartments, I've calculated that the current zoning permits fewer than 1,200 multi-family units.  While some of ZNA's 1,000 existing units are non-conforming (i.e., not built on MF-zoned property), there is clearly little room for more housing under current zoning entitlements.  And we all know what happens when a developer asks for greater entitlements in the Zilker neighborhood.

As Mayor Wynn likes to point out, the City of Austin has doubled in population every 20 years, and will likely continue to do so.  Thousands of these new residents (and plenty of the current ones) will want to live close to downtown and central Austin's other amenities.  We must find space somewhere.

VMU zoning is supposed to provide that space.  That was the "deal" with the neighborhood groups:  density will go on the transit corridors and not in the neighborhood interiors.  That deal did not, and does not, permit neighborhoods to gerrymander the VMU district to indulge their officers' fondness for a particular business -- or a dozen or more businesses, in ZNA's case.  (It must sting the local businesses who weren't favored by ZNA to discover their customers left them off the "beloved" list.) 

A number of neighborhoods -- including neighborhoods represented by high-ranking ANC officers -- have taken the VMU deal seriously.  ZNA has not.  The City Council has the right to deny a neighborhood's opt-out application in its entirety.  Please do so here.

Footing it to class

Richard Florida at the Creative Class Exchange:

Ohio State university sociologist, Kent Schwirian summarizes the results of an OSU study of the relationship between where students live and their grade point average and the time they take to graduate.

Percent graduating in four years:

• Walking distance 60.8%
• Near campus 47.5%
• Rest of county 36.7%
• Outside of county 21.1%

Grade point average:

• Residence hall 3.33
• Walking distance 3.16
• Near campus  3.12
• Rest of county 2.97
• Outside of county 2.94

Correlation doesn't imply causation.  But it makes some sense here.  Being a student is easier when you live within walking distance of campus.  It's easier to get to class.  It's easier to study with other students.  It's easier to make a professor's office hours.  It's easier to get to the library. (Do college students use libraries any more?)

Just another data point for evaluating the harm the City of Austin inflicted on University of Texas students by its years-long ban on dense development in West Campus.

VMU at City Council: This is very encouraging

Last night, City Council took a firm stand on Vertical Mixed Use.  It voted 6-1 to deny Judge's Hill's application to opt its four eligible tracts out of the VMU district.  (Dunkerly's motion was worded more diplomatically than that, but it had the same effect.)  It even voted to opt the tracts into the affordable housing incentives.

This was just a first reading, and there was some talk of putting off the 2nd and 3rd votes until ROMA has completed its downtown plan.  But this was encouraging -- very encouraging -- because it was the first time Council had to take a stand.  I hope City staff and the Planning Commission take Council's cue.

Perhaps equally encouraging, Council postponed Hyde Park and East MLK's applications to opt all of their eligible properties out of VMU.  It was clear from the meeting (and from McCracken's e-mail to M1EK mentioned in a comment here) that these two neighborhoods are being sent back to the drawing board.

I have been pessimistic about VMU's chances since City Council voted to allow neighborhoods to opt individual properties out of the VMU district.  Last night's meeting is ground for cautious optimism. 

VMU: Time for City Council to enforce the bargain

The City Council has not been tested on the VMU ordinance until now.  The first few neighborhood opt-out applications respected the VMU "bargain":  allow density on the transit corridors; relieve the development pressure on neighborhood interiors. 

But now Council must confront real neighborhood intransigence.  Hyde Park, Judges Hill, and East MLK have asked to opt nearly all of their eligible tracts out of the VMU district.  (M1EK's scathing reaction to the Hyde Park application is worth a read.  I analyzed Zilker's VMU application here.)

Farmers Branch is now going after renters as well as illegal immigrants

Farmers Branch has escalated its odious campaign to ban illegal immigrants:

A Dallas suburb mired in a lawsuit over its attempts to bar illegal immigrants from renting in the city asked a federal judge on Monday to consider its newly-revamped ordinance instead of the previous one.

The request would consolidate the ordinances and allow the judge to deliberate the validity of both, said Michael Jung, attorney representing Farmers Branch.

The City Council approved a rule last week banning home and apartment rentals to illegal immigrants. The new rule would require potential tenants to get rental licenses from the city, which would ask the federal government for the applicant's legal status.

Farmers Branch has already been fighting a lawsuit filed by apartment complex owners and civil rights groups over an earlier rule barring landlords from renting apartments to most illegal immigrants.

U.S. District Judge Sam Lindsay blocked Farmers Branch from enforcing its original ordinance. The judge found Farmers Branch city officials attempted to create their own classification system for determining which noncitizens could rent an apartment. [AC: court opinion here (pdf).]  The judge also wrote that the ordinance essentially deputized landlords to serve as federal immigration agents.

Thus, to keep the illegal immigrants out, Farmers Branch wants to make all renters get permission before signing a lease -- and the rule would apply to both single family homes as well as apartment complexes.

Forget about the patent xenophobia.  Can you imagine the impact this precedent would have on the rental markets in this state?  Lots of jurisdictions are just itching to restrict rentals.  I can't imagine a better strategy than requiring renters to come groveling to the city for permission to live there.  And if a city can condition a rental "license" on legal residency, why not on other things? 

The mere prospect of having to apply for a license will deter many if not most renters.  Developers aren't stupid; they will recognize that new apartment complexes will be hard to fill.  They won't build them.  A city might as well zone out all multi-family.  That would frankly be less insulting to renters.

I have a hard time believing that the local government code gives cities this kind of authority. I can't tell whether the federal judge will consider state-law challenges to ordinance; that's usually discretionary. (The plaintiffs may not have even raised any state-law challenges.)  But I hope some judge somewhere eventually buries this ordinance. 

Update on the fight over the McMansion ordinance in Central East Austin (updated)

Dee Copeland at Texas Realty Blog has a nice update on OCEAN's attempt to repeal the McMansion ordinance's minimum floor-to-area ratio for Central East Austin homes.  Quite predictably, OCEAN is getting pushback from the small lot owners who would be hurt by this change.

The opposition is being spearheaded by "Hollywood" Henderson.  You can read his "Dear Neighbor" letter/petition at Dee's blog.

Update:  City Council denied the amendment unanimously.