AUSTIN’S STRATEGIES TO PROMOTE AFFORDABILITY 1
DEFINITIONS: AFFORDABILITY Affordable Housing: Housing in which the occupant(s) is/are paying no more than 30 percent of his or her income for rent, mortgage payments and utilities. Definition from HUD Household Affordability (Imagine Austin Priority Program #6): Household affordability includes the cost of housing, utilities, taxes and transportation. Definition from Imagine Austin Median Family Income (MFI): 30% MFI: $16,350 for 1-person household; $23.350 for a 4-person household 50% MFI: $27,250 for 1-person household; $38,900 for a 4-person household 80% MFI: $43,600 for 1-person household; $62,250 for a 4-person household 2016 HUD Values for the Austin-Round Rock-San Marcos MSA
ACHIEVING AFFORDABLE HOUSING Market Rate Affordable Housing: Housing built by private developers that is affordable due to size, location, age, quality, maintenance, etc… Income-Restricted Affordable Housing: Housing that is reserved for households at particular incomes (often in terms of a percentage of Median Family Income, or MFI) for a specified period of time. Affordability through Subsidized Affordable Housing Regulations or Incentives Housing Subsidized by Federal Housing Subsidized by Federal or Local funds to make the or Local funds to make the development feasible with development feasible with lower rents or prices. Usually lower rents or prices. Usually has an affordability period. has an affordability period.
HOMESTEAD PRESERVATION DISTRICT Current Homestead Preservation Districts: Four Created in East Austin to: “ increase home ownership, provide affordable housing, prevent the involuntary loss of homesteads by existing low-income and moderate income homeowners living in disadvantaged neighborhoods.”
POTENTIAL FUTURE HOMESTEAD PRESERVATION DISTRICTS
HOMESTEAD PRESERVATION DISTRICTS Homestead Preservation Reinvestment Zone: Allows the use of tax increment financing (TIF) to finance the creation and preservation of affordable housing in the district. – Created for one of the four established HPDs in Austin in December of 2015. Homestead Land Bank Program: Allows the City of Austin to operate a Land Bank program, through which vacant properties subject to tax foreclosure are made available for affordable housing. Homestead Land Trust: Allows Council to designate one or more community land trusts to operate within the district and access TIF funds. Austin Housing Finance Corporation, Travis County Housing Finance Corporation and PeopleTrust are designated by City Council to operate as HPD Land Trusts.
COMMUNITY LAND TRUST PROGRAM • Allows low- and moderate-income people to purchase a home and lease the land • Takes the cost of the land out of the real estate transaction • More affordable than houses on the open real estate market • 99-year ground lease with the CLT is signed for the use of the land
Density Bonus Programs What is a Density Bonus Program? An incentive-based tool that grants additional entitlements (density) in return for positive community benefits. Entitlements can include: • Additional Density (FAR: Floor Area Ratio) • Additional Units per Acre • Additional Height Baseline Density Designed to leverage private sector partnerships (e.g., 8:1 FAR) Generally targeting 60% Median Family Income and above.
DENSITY BONUS PROGRAM Incentive-based program that grants additional entitlements or privileges in return for community benefits (Density is a community benefit) Strengths: • Provide options for developer participation • Sensitive to neighborhood context Challenges • Limited standardization makes implementation difficult for developers and City staff • Fee-in-lieu structure does not often reflect real cost of development 10
Home Repair and Financial Empowerment Programs Financial Empowerment: Down Payment Assistance HousingSmarts Home Buyer Education Individual Development Account (IDA) Program Home Repair: Lead Healthy Homes Grant Architectural Barrier Removal (ABR) Home Repair Loan
HousingSmarts Program • FREE homebuyer education training • Teaches first-time home buyers and others how to manage and improve their credit and finances, obtain a mortgage, shop for a home, and protect their investment • A HousingSmarts graduation certificate satisfies many homebuyer education training requirements • Eligibility • Live within Austin city limits • At or below 80% Median Family Income • All City employees are eligible
Down Payment Assistance (DPA) • Assistance with down payment, eligible closing costs and pre- paid expenses depending on financial need • Standard DPA: $1,000 to $14,999 • Deferred, 0% interest loan, 5 year term • Shared Equity DPA: $15,000 to $40,000 • Deferred, 0% interest loan • 10 year note, 30 year lien and shared equity
Individual Development Account (IDA) • Provides matched funds and classes to assist with: • Higher Education • Purchasing a home • Investing in a small business endeavor • 4:1 Matched Funds - City will match $4 for every $1 • Max Savings = $1000 and Max Match = $4000 • Double for eligible households • Required education focusing on specific goal
Lead Healthy Homes Offers • Houses built before 1978 may contain lead, which has been found to have especially negative effects on children • Lead HH offers up to $30,000 in FREE services • Lead poisoning testing for children • Home inspections for lead • Lead removal • Risk Assessments • Lead Abatement • Relocation of occupants • Removal and storage of contents
Before After
Architectural Barrier Removal (ABR) • Up to $15,000 grant to modify or retrofit the homes of elderly and/or severely disabled homeowners and renters to increase self-sufficiency, mobility, and safety • Handrails • Door widening • Buzzing or flashing devices (for persons with impaired hearing or vision) • Accessible door handles or faucet handles • Shower grab bars • Shower wands • Elevated toilets • Accessible sinks and showers
ABR Before and Aft fter
OTH THER POTE TENTIAL STR TRATEGIES FOR AFFORDABILITY • Support Legislation to Allow a Flat Dollar-Amount Homestead Exemption for all Local Taxing Entities • Use Incentives to Support the Production of Jobs for Lower- Income Residents • Target a Preservation Property Tax Exemption to Communities at Risk of Displacement • Allow Homeowners to Rent Part of Their Houses • Pursue Future General Obligation Bond Elections for Affordable Housing • Challenge the Private Sector to Participate in a Fund for Affordable and/or Workforce Housing
OTH THER POTE TENTIAL STR TRATEGIES FOR AFFORDABILITY • Encourage Missing Middle Housing • Allow Development of Smaller Houses on Smaller Lots • Relax regulations on both internal and external Accessory Dwelling Units (ADUs) • Maximize Public Property to Build or Include Affordable Housing • Utilize Tax Increment Financing (TIFs) for Affordable Housing • Utilize Social Impact Bonds/Pay for Success Models for Services for People Experiencing Homelessness • Utilize the National Housing Trust Fund • Leverage Low Income Housing Tax Credits (LIHTC) and Seek Legislative Changes for the City of Austin
CodeNEXT & Austin Strategic Housing Plan Timelines & Connections Affordability CodeNEXT Drafting Code Draft Code Prescription Paper Fair Housing/CodeNEXT Resolution No. 20151210-030 Austin Draft Housing Public Housing Plan Adoption and Housing Plan for Implementation Input Public Review Plan Summer Winter Spring Fall Spring 2016 2016 2017 2016 2016
Questions? Erica Leak Neighborhood Housing and Community Development nhcd@austintexas.gov
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