3. Possible Solutions Must Consider...
For this event we need to take a look at the special conditions related to displacement that takes place in Austin. Any viable concept must account for what we are not allowed to do, the velocity of local displacement, speculative market forces, and the magnitude of the problem.
Tools that are not available in Texas…
- During 2018, more than 20% of renters in Austin were spending more than half their income in rent.
- Many tools allowable in other states are simply not allowable under Texas State Law:
- Rent control
- Inclusionary zoning
- Protection from discrimination based upon source of incomeuse of vouchers
- Affordable housing linkage fees (also known as impact fees)
- Tenant right-to-purchase program, and flat dollar homestead property tax exemption for low-value properties.
The velocity of local displacement
- Ranked the highest-growth city in the country in 2018, Austin has experienced a population growth of 21% over the last eight years.
- The median rent has increased 30% in the last 5 years.
- 2018 Median Gross Rent in Austin: $1,314
- 2013 Median Gross Rent in Austin: $1,008
- The home value has increased 56% between 2013 and 2018.
- 2018 Median Home value of owner-occupied housing units: $365,500
- 2013 Median Home Value: $234,800
- These numbers signal a hot real estate speculation market that has left original Austinites struggling to afford continuing to live within the city limits.
Speculative market forces
- Real estate investors are incentivized to seek the highest return on investment.
- They pursue the acquisition of properties that start off with a low value, but have an attractive proximity to job, transportation, entertainment amenities such that if remodeled, demolitioned and densified, allow for a sizeable return on investment.
- Properties like these are usually found in historically underinvested neighborhoods.
- The pressure of the resulting increased housing costs is felt citywide, however, the impact of a forced move on a gentrifying neighborhood is higher than in a non-gentrifying neighborhood.
- The person being forced to move loses the ability to afford to stay in the same neighborhood.
- Displacement has lasting impacts on physical and psychological well being, community cohesion, and long-term economic mobility.
- When low-income people of color are displaced from communities by rising housing prices, we often see patterns of re-segregation emerge, deepening racial inequity.
The magnitude of need
- Strides have been made with the City’s largest affordable housing bond, however:
- The current amount of affordable units funded does not match the amount needed
- Those units to be built will take several years to be ready for use
- City services are funded to meet only a fraction of the need and may need to transition to a displacement mitigation frame.
- In gentrifying areas 69,957 renter units are making less than $75,000 and 23,608 owner units making less than $75,000.