Watson Wire: Affordability First

We talk about affordability in Austin a lot – and for good reason. It affects just about everyone every day in some way, though not everyone in the same way, of course.

For young people just beginning to make a life here, thinking about homeownership is a dream.

Housing affordability is also a priority for our teachers, firefighters, EMS personnel, police, wait staff at our favorite restaurants, musicians and artists. Just about all the folks that positively add to our quality of life.

For families with small children, childcare is a huge line item in the monthly budget.

For homeowners living on a fixed income, rising property taxes can break the bank.

For a renter barely making ends meet, an unexpectedly high utility bill can make the difference between being housed and becoming unhoused.

Too often, City Hall moves too slowly and inefficiently. It must react to Austin’s needs faster and with more results. It’s more than just talking about affordability. It requires focus, multiple approaches, and getting things done. We’re making real progress. Real change.

Needless to say, there’s no single policy fix for all these challenges. And as policymakers, we have to strike a complicated balance so the cost of the fix doesn’t exacerbate the affordability problem.

On top of that, many of economic levers that could make a big difference are outside the City’s control, things like inflation rates, federal tax policy and state child care reimbursements.

So, what can the City do?

Focus on Affordability—Housing and More

I sat down with Amplify Credit Union CEO Kendall Garrison last week at Amplify’s Affordability Summit to talk about how we’re approaching the affordability challenge from all the angles.

Family income is a key variable in the affordability equation, and helping folks earn more helps them afford more. That’s part of the policy rationale for the creation of the Austin Infrastructure Academy, for the proposals of the Mayor’s Task Force on Women Entrepreneurs, and other efforts to ensure Austinites can take full advantage of local economic opportunities.

Controlling how much the City charges you in taxes and fees is another area where we can make a difference. On Thursday, the City Council will take up an item to increase the property tax exemption for homeowners who are senior citizens or disabled. This targeted exemption is on top of the 20 percent general homestead exemption available for all qualified homeowners and lowers taxable value of a home. By raising the exemption to $154,000, up from $124,000 now, we will hold the annual City tax bill flat for these homeowners who are living on a fixed income.

We’re also lowering the property tax burden for childcare providers to help them keep costs down for the families they serve. In November, Austin was the first city in the Texas to adopt a total property tax exemption for qualified childcare centers after voters approved a constitutional amendment to allow for the local exemption. In addition, City staff has recommended establishing a new grant as part the 2025 budget to help the home-based childcare providers that don’t qualify for the state exemption.

Travis County recently adopted the exemption for childcare centers as well and is exploring the possibility of asking voters to make a significant investment in quality, affordable childcare. I applaud County leaders for taking that step. Access to childcare is huge obstacle for families and keeps women, in particular, from realizing their full economic potential and this kind of public investment could be a game-changer for our community.?

Housing affordability is front and center for so many Austinites. We need more housing opportunities, period. All kinds of housing. Some of it needs to be Big-A Affordable Housing, which requires a public subsidy to make it affordable to lower-income families. And some of it will be market-rate housing that is “attainable” for folks earning more than 80 percent of median family income.

We need all of it because the more supply we’re able to generate, the more it can positively impact the pricing curve going forward. A national magazine recently focused on the decline of rents in Austin after more units were built and concluded the following:

“The miracle of Austin is helpful to recognize, because it restores clarity to a simple truth: Houses are essential, but they are not magical. The normal rules of supply and demand apply. Perhaps more blue cities and states should make a point of applying those rules — and build more damn homes.”

We are doing everything we can to create the opportunity to build “more damn homes” through the big changes to the Land Development Code, improvements to our development review process, and major investments in land and subsidized housing.

Through a number of strategies, we’re making a positive difference — getting real results — in Austin’s affordability.