The Mayor and at least some members of the Austin City Council are talking about bringing back the proposed Land Development Code (LDC) rewrite and working on parts of it on which they can agree. That would be while waiting for an appeals court ruling on the lawsuit which derailed the LDC juggernaut last March. Shortly before that verdict, the Council had put the LDC process on hold due to the onrushing coronavirus pandemic.
The news about the latest LDC approach was reported in the Austin Business Journal and is big news all on its own; and it could even be a good thing. The larger news was overshadowed, at least here at the Independent, by comments Mayor Pro Tem Natasha Harper-Madison made in the article. Let’s begin by reprinting the three paragraphs containing Harper-Madison’s comments in full without comment or analysis.
‘“It’s the worst possible time for us to have any lag time, any stall in the production of housing,’ Mayor Pro-Tem Natasha Harper-Madison said. She added that she also anticipated small changes to the LDC would come up later this year, which she described as an ‘earnest approach’ that doesn’t ‘circumvent the process.”’
‘“I don’t know if the folks who brought forward the suit recognize just how many Austin homeowners that they’d be affecting,’ Harper-Madison said. ‘There are people whose properties they haven’t been able to finish. There are people who purchased property under the impression that, at the very least, version two of the LDC rewrite would go. But now, they’re just sitting on property and just sitting on half-finished projects that they can’t complete — or certainly can’t complete to the degree that they had hoped.”’
‘“For some of these folks, when they did the math, the numbers shook out because they were anticipating being able to have more entitlements. There are a lot of people who, frankly, if I’m being honest, are really out of luck right now while we’re sitting around waiting to see what happens with this lawsuit. It’s super unfortunate,’ she added.”
I could just stop right there because Harper-Madison has already pretty much written the story for me. But, I think it’s incumbent on me to provide some analysis. It’s difficult to decide where to start.
Let’s begin with the Mayor Pro Tem wondering whether the people who filed the lawsuit against the LDC “recognize(d) just how many Austin homeowners that they’d be affecting.”’ Actually, it seems rather apparent that the plaintiffs did realize that they would be affecting virtually every homeowner in Austin — although not in the way Harper-Madison describes. That’s because the suit challenged the Council majority’s attempt to mass rezone virtually every single family property in Austin without officially notifying the homeowners. The Council was also seeking to deny petition rights to homeowners, which was the other thrust of the suit. In thousands of cases, that would have meant the City rezoning individual single family properties to allow four to six units per lot — not acre, per lot — without officially notifying the homeowners, and while taking away the right to petition that property owners have in regular zoning cases. Petition rights can result in requiring a super majority Council vote to make the zoning change, if the property owner, or enough area property owners, object. So, yes, the people who filed the lawsuit did realize that their lawsuit would affect a lot of “homeowners” in Austin.
Homeowners or Speculators?
More straight to the heart of Harper-Madison’s remarks, however, is the use of the term “homeowners” in the first place. Harper-Madison did not respond to a call and email asking for an interview about her remarks. It seems apparent, however, that the Mayor Pro Tem used the term “homeowners” when she really meant developers, investors and/or land speculators. While she uses the more sympathetic term “homeowners,” the rest of what she says is not the type of challenge normally faced by “homeowners.” By that I mean her statements:
- ‘“people who purchased property under the impression that, at the very least, version two of the LDC rewrite would go;”’
- ‘“just sitting on property and just sitting on half-finished projects that they can’t complete — or certainly can’t complete to the degree that they had hoped;”’ and
- ‘“when they did the math, the numbers shook out because they were anticipating being able to have more entitlements.”’
Really, does that sound like the predicament of very many “homeowners?” And, if there are any homeowners out there in any of the circumstances Harper-Madison describes above, it is not going to be one of the citizens looking for affordable housing that she so often claims to be fighting for.
To be fair, Harper-Madison has in the past talked about homeowners in her district who want to get the maximum amount of entitlements so that they can sell their property. These folks would not, however, fit into Harper-Madison’s characterization of “people who purchased property under the impression that, at the very least, version two of the LDC rewrite would go.” No, that would be speculators, pure and simple.
And, while some homeowners might favor upzoning their properties, there are, at the same time, thousands of others who bought their homes, the biggest investment of their lives, planning to stay there for the rest of their lives, or for many years. Many see upzoning in the style that speculators and Harper-Madison want as damaging their investment and their quality of life as well as driving up their property taxes.
Also, as Harper-Madison frequently notes, there are thousands of other people, particularly young families, out there looking to purchase a home and unable to find anything in their price range. Few, if any, of these folks are in any of the situations Harper-Madison describes.
“Sitting on half-finished projects”
Now, let’s put Harper-Madison’s statements back together and look at their meaning. No one — homeowner, developer, investor or land speculator — should be in a situation where they “purchased property under the impression that, at the very least, version two of the LDC rewrite would go (clearly meaning pass)” and are now “sitting on half-finished projects that they can’t complete — or certainly can’t complete to the degree that they had hoped.” The reason no one should be in this position is that the City does not legally allow anyone to begin development under rules that are anticipated to pass at some point in the future. Anyone who does so is not complying with the law or with development regulations. (It might be possible for the Council to approve something beyond current rules in a Planned Unit Development, PUD, but that approval would not then be derailed by failure to pass a new LDC.)
It is, however, all but certain that some investors and speculators purchased single family properties based on the expectation that the Council would upzone those properties and allow more housing units on the property than are currently allowed — thus delivering large profits for the speculators. There is nothing legally wrong with making such speculative investments. The fact that people make such investments, however, does not — in any way — place an obligation on the City to approve regulatory changes to ensure that those speculative investments pay off.
As virtually anyone who owns a home anywhere near central Austin realizes, speculative investment continues with or without a new LDC. Speculative investors call and write people throughout central Austin every day wanting to buy their homes. Investors are also part of what’s driving up home prices in Austin and around the country, by paying above the asking price and outbidding young families looking for a home.
Now, let’s turn back to Harper-Madison’s contention that ‘“There are people whose properties they haven’t been able to finish. There are people who purchased property under the impression that, at the very least, version two of the LDC rewrite would go. But now, they’re just sitting on property and just sitting on half-finished projects that they can’t complete — or certainly can’t complete to the degree that they had hoped. For some of these folks, when they did the math, the numbers shook out because they were anticipating being able to have more entitlements.”’
This part of what she said is all based on the contention that at least some developers began development projects under rules that they anticipated the Council would pass, but then had to stop because the Council did not ultimately pass the new rules — because a court ruled that the process the Council was following violated state law. There are a lot of problems with this combination of words. Most fundamentally, it would not be lawful for a developer to start a project under proposed rules that were not yet in effect. The City would not grant approval to a project under the terms of the proposed LDC, if that proposal had not been passed into law and ordinance — which it has not been.
If a developer did start a project under proposed rules i.e. not actually in place, then Harper-Madison’s framing has it that, that developer then put his or her project on hold once the Court ruled against the City. Such a situation actually existing is highly unlikely. Another scenario, also highly unlikely, would be that a developer started a project under the rules of the anticipated LDC rewrite, then the City found out and shut down the project. In the unlikely event that such a situation occurred, this would not be because the LDC failed to pass, but because the developer was not complying with City rules.
One question I wanted to ask Harper-Madison was if she could name any projects, or homeowners, that are in any of the situations that she describes; to see if there are any possibilities that my imagination is missing.
In closing let’s just say that Mayor Pro Tem Harper-Madison may indeed have empathy for the “homeowners” of Austin, but the empathy she expressed in the Austin Business Journal article is — with maybe a few exceptions — for developers, investors and land speculators.
(Image at top is a screen shot from City/Channel 6 video of Natasha Harper Madison at a December 2019 discussion of the Land Development Code rewrite.)
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