DALLAS – Austin, Texas could sustain its affordable housing program for six years with $27.5 million of general obligation bonds, instead of the $65 million of new debt that could be supported without raising taxes.
The Austin City Council on Thursday will consider four options for an affordable housing bond referendum in November.
City staff recommended the $27.5 million option at a Monday briefing, but a majority of the council has supported the maximum amount that can be issued without raising the current property tax for debt service of 12.08 cents per $100 of assessed valuation.
The Council must act no later than Aug. 26 to put a general obligation housing bond package on the Nov. 5 ballot.
Proceeds would be used to build, maintain, and renovate affordable housing in Austin.
The staff report recommended the lowest option, citing overall interest costs of $15 million for the $27.3 million program and $37 million for the $65 million bond program.
Last November Austin voters narrowly rejected a request for $78.3 million of GO bonds to continue an affordable housing program funded with $55 million of bonds approved in 2006.
An affordable housing request was the only bond question to fail of the seven proposals on Austin’s November 2012 ballot.
“The need is great,” said Councilwoman Sheryl Cole after the briefing.
The bond program would fund the construction of well-built apartments and single-family houses that fit into existing neighborhoods, she said.
That was not well understood by voters last year, Cole said, when 51.4% voted against the affordable housing proposal. That uncertainty was the council’s fault, she said.
“The ballot language did not specify that the item was for affordable housing, and for women and children and veterans and the disabled community,” Cole said.
The $55 million of bonds from the 2006 authorization leveraged almost $200 million of investments though tax credits, grants, and private equity, she said. Total economic impact of the program was more than $850 million, she said.
Keep Austin Affordable, a coalition of business leaders and community organizations that support the full $65 million plan, said the city needs affordable housing.
Austin is at a crossroads, said Buddy Nicoson, vice president at Samsung Austin Semiconductor.
“Austin is now the ninth most-expensive rental market in the country,” Nicoson said at a rally in support of a $65 million bond referendum. “The average rent for a two-bedroom apartment is nearly $1,100, which is more than a family with two full-time working parents can making minimum wage can afford.”
Mandy DeMayo, a spokeswoman for Keep Austin Affordable, said Austin is the most expensive rental market in Texas. Thousands of families in Austin cannot find affordable housing, she said.
“Unless we do something, unless we invest in affordable housing, it’s only going to get worse,” she said.