Austin Contrarian

Does East Austin really have a high level of homeowner turnover?

These statistics are not meaningful without a baseline to tell us what is "normal":

More than 1 in 3 people who bought homes in some of East Austin's oldest neighborhoods in 1992 or earlier moved out of those homes after 2002, and close to 1 in 3 of remaining homeowners are delinquent on their property taxes, according to a new study calling for community solutions to help people stay in their homes.

Released Tuesday by two nonprofit groups, the study concludes that rising property taxes in those East Austin neighborhoods have squeezed out many low- to moderate-income families. Though the report calls the turnover of homeowners alarming, it says that hundreds more longtime residents still reside in East Austin and that helping families stay in those homes is better than traditional approaches of building new affordable housing.

"This (report) gets to our whole concept of the American dream, and what does that mean, and what should we expect?" Raul Alvarez, one of the report's authors, said, adding: "In this day and age, we need to be able to purchase our home and be able to live there all of our lives and die there if you choose. That dream has changed dramatically for some of these eastside residents."

A former Austin City Council member, Alvarez is president of the East Austin Conservancy, which issued the report with People Organized in Defense of Earth and her Resources (PODER).

"We talk about sustainability in Austin. I think part of the sustainability is keeping people in the neighborhood," Susana Almanza with PODER said. "What we don't want Austin to become is an urban core only for the rich."

The report, which studied Chestnut, East Cesar Chavez, Holly and parts of Rosewood neighborhoods, does not address how homeownership turnover and tax delinquencies in those neighborhoods compare with other areas of the city, nor where those longtime homeowners moved.

It is based on findings gleaned from Travis Central Appraisal District records.

Karen Paup, a housing advocate who works on affordability issues, called the turnover rates in the report striking.

"There's probably not another neighborhood (planning) area in Austin where we would find that 33 percent of the houses ... had that high of a turnover in a 10-year period," said Paup, co-director of the Texas Low Income Housing Information Service, a nonprofit research and advocacy group.

I don't have  a copy of the report and would appreciate someone forwarding it to me. But these turnover figures aren't striking to me.

"We need to be able to purchase our home and be able to live there all of our lives and die there if you choose." Very few people do this. It is not the norm. Most people move several times, even after reaching adulthood. According the American Community Survey's 2010 5-year estimates,  56% of Austinites living in owner-occupied homes in 2010 moved into their homes between 2000 and 2010. Only 18% of Austin's homeowners have lived in their homes since 1990. (Renters are even more mobile: 94% of all renters moved into their homes between 2000 and 2010.)

I haven't done a systematic study of other Austin neighborhoods, but these East Austin neighborhood appear to be more stable than a couple of other old, central Austin neighborhoods for which I already had data. Here's the ACS data for Tracts 9.02 and 10, which roughly match the "study" boundaries above, and Tracts 13.03 (part of Zilker) and 13.05 (Bouldin Creek):

The ACS numbers are just estimates with pretty wide margins of error.  Still, they suggest that the two East Austin tracts have at least as many long-time homeowners than either of the two tracts just south of Lady Bird Lake.  ACS estimated that 43% of the homeowners in Tract 10 (as of 2010) moved into their homes before 1990. It estimated that 35% of the homeowners in 9.02 moved into their homes before 1990. The comparable stats for Tracts 13.05 and 13.03 are 32% and 22%, respectively.

The City-wide average, again, is only 18%, although this is of course skewed by new construction and not as meaningful as a comparison with neighborhoods of similar age. But no one has done such a comparison. Without it, we can't tell whether East Austin is experiencing an unusual degree of turnover. And without some evidence that East Austin is experiencing an unusual degree of turnover, the advocates haven't shown that property taxes or other economic hardship is driving people out of East Austin.

What is the real constraint here?

Austin badly needs more downtown office space. Austin's downtown Class A rents are higher than either Dallas or Houston's, which is absurd. But it is difficult for developers to line up money to build an office building on spec, particularly without a large anchor tenant to soak up a few floors. Austin doesn't have many firms looking for large blocks of downtown space.

Cousins Properties will try, though. It has announced plans for a 30-story office tower at Third and Colorado streets. The tower would have  about 390,000 square feet of office space and 6,000 square feet of street-level retail. Twelve of the 30 stories would be for a parking garage with 900 spaces. It would be downtown Austin's first new high-rise office building since Frost Bank Tower opened eight years ago.

Given the intense demand for new office space downtown, why limit the project to "just" 30 stories? On net, this building will yield just 17 or so floors of office space. Why not more?

Downtown zoning regulations limit the building to a floor-to-area ratio ("FAR") of 8:1. The owner got approval in 2009 for a FAR of 12:1, but the zoning ordinance restricted the increase to a hotel use, and the developer needs 15:1 FAR anyway.  Althought it's ridiculuous that central business district zoning limits this downtown site to around eight floors of office space (parking doesn't count against FAR), that's not the real constraint on this building's size. The developer is asking for 15:1 and I expect it will get it.

I suspect the real constraint here is parking. Drivers will only drive up so many ramps in order to park their cars. The taller the garage, the bigger the pain it is to park on the top floors. This puts a practical cap on the number of floors a parking garage can contain. The developer is proposing a 12-story garage, which is an aggressive estimate of that cap. It's safe to say that this plan would maximize the amount of parking on site.

Despite all that parking, the plan is proposing "only" 2.3 parkings spots per 1,000 sf of office space -- less than that, really, since some of that parking should be allocated to the ground-floor uses. Although this is  more parking than the city requires, it is less than conventional wisdom says new office buildings in downtown Austin need, which I've been told is around 3 spaces per 1,000 square feet.

I'm not questioning the feasibility of this plan. As office rents rise, the opportunity cost of a parking spot increases, which should lead to less parking per square foot of office space. And I'd be delighted to see the ratio of parking to office space decline in downtown Austin. But the extreme height of the garage combined with the aggressive parking-to-office-space ratio suggests that the developer has proposed 17 floors of office space because it can't fit in enough parking for 18 floors. Put differently, the developer is building as much leasable space as its maxed-out parking garage will support.

Run urban rail up Guadalupe/Lamar

Jeff Wood at The Overhead Wire has been running a series on the history and politics of Austin's urban rail endeavors. Today he's posted an immaculate argument for running the line up Guadalupe and Lamar rather than out to Mueller.  The aerial photo below, which contrasts the proposed line (orange) and a Lavaca/Guadalupe/Lamar alignment using current bus ridership, makes the case succinctly:

Guadalupe and Lamar are at capacity and have been at capacity for decades.  Planners are shying away from them, evidently because they are too congested. But "being too congested" is the reason to make this massive investment in rail in the first place. Reserved guideway transit is the only way to significantly increase the capacity of these prime gateways to UT, the Capitol Complex and downtown.   Spending a couple hundred millioin on the four-mile segment from UT to Mueller is largely a waste at this point -- that's not a congested route, and it doesn't have much existing transit ridership.