Council Weighs Measure That Could Bring Affordable Housing To East Austin For Decades

Jun 8, 2017

Austin City Council is set to consider a program that would bring more affordable housing units to the East Side. It’s called a community land trust, and it could create homes that remain affordable for decades to come.

If approved Thursday, the measure would designate two local nonprofits, the Chestnut Neighborhood Revitalization Corp. and the Guadalupe Neighborhood Development Corp., as new community land trusts. Certain homes built by these groups would be sold to people who earn 80 percent or less of the median family income. For a family of four in Austin, the median is about $81,400 a year.

Here’s how the system works. If you buy a home that’s part of a community land trust, you’ll pay taxes on the house, but not on the land.

“It provides low- and moderate-income residents the opportunity to build equity through home ownership," said Sandra Harkins, project coordinator with the city’s Neighborhood Housing and Community Development office. "One of the more important things is it ensures that these homeowners are not displaced due to rising property taxes."

Rather than paying expensive land taxes, Harkins said, homeowners would lease the land from the city for an initial fee of $250 and then $50 a month. Leases would remain in place for 99 years.

The city doesn’t currently have any community land trust homes on the market. If approved by council, this measure would add 51 new homes for sale, along with six new rental units, in East Austin. Harkins said even though homeowners would be exempt from paying property taxes on the land, these units would generate new tax revenue.

“These are currently vacant lots,” she said. “So you’re taking a piece of property that wasn’t at all on the tax role, and adding it to the tax role – even though it's going to be limited to the improvement taxes.”

One of the properties that would be included in the land trusts is the Chicon, a 43-unit mixed-income development near East 13th and Chicon streets. Construction was stalled for about nine months after developers ran into issues with the land titles and sought additional funding.

Chestnut Neighborhood Revitalization Corp. is constructing the property. Board President Sean Garretson said the first residential building should be ready for move-in by the end of the year.

He said all the residential units and all but one of the commercial units have already been sold.

The properties that would be a part of these new community land trusts are all within Districts 1 and 3. District 1 Council Member Ora Houston did not make herself available for an interview. But District 3 Council Member Pio Renteria said the city has to take advantage of whatever methods state law will allow when it comes to adding affordable units.

“They have tied our hands in all kinds of ways to fight for our low-income Austinites, so you know, we have to be creative,” Renteria said.