Austin City Council Wants To Help Prevent People From Getting Priced Out If New Transit Is Built

Jul 27, 2020

The Austin City Council voted Monday afternoon to move forward with plans to seek a property tax increase to help fund Project Connect, a plan to build more train and bus lines.

Part of that money would be directed toward strategies to prevent people from getting displaced by potential new development along transit lines, in a city where many people have been forced to relocate because of the escalating cost of housing.

The tax increase of 8.75 cents per $100 of property valuation would fund a $7 billion initial expansion of the transit system, as opposed to a higher tax rate of 11 cents that would have funded the full system plan of $10 billion. The council will formally vote next month on whether to put the plan to voters in a November referendum. 

Officials anticipate the federal government will pay for 45% of the plan, leaving the rest to be funded locally. The Capital Metro Board also voted to direct $73 million out of its upcoming budget to help start the process, including improvements on the current Red Line and expanded MetroRapid bus service. 

Staff from both the city and Cap Metro had recommended an 8.5 cent property tax rate, but council members sought more money to invest in displacement mitigation.  The plan now calls for a $300 million fund to address displacement, up from $100 million. Potential strategies could include buying land, investing in affordable housing and targeting rental assistance for people along the corridor.

“These [strategies] need to be unique to the neighborhoods along these corridors, they need to be co-created with the community and they need to begin ahead of construction,” Council Member Ann Kitchen, who is also a Cap Metro board member, said. 

The potential transit referendum was one reason city leaders opted for a lower tax rate to fund the city’s budget next year. The rate will likely increase by 3.5%, which council members said would be the lowest increase in more than a decade. Both the council and board will also vote next week on whether to form a new local government corporation to oversee the funding and implementation of Project Connect.

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