Who knew?
Council Member Ryan Alter is a developer; or at least he was until very recently. I just learned that this weekend. I was a little late to the news.
The answer to my question — “who knew” — is Ken Martin of the Austin Bulldog. Martin reported the following back in a September 2022 article on the financial disclosure statements of candidates in that year’s Council elections:
“Seven candidates reported having no debts. Total debts for the others ranged from less than $8,800 to $6.9 million. The eye-popping latter figure belongs to District 5 candidate Ryan Joseph Alter (no relation to incumbent Council Member Alison Alter) and it’s more than 10 times the debt reported by any other candidate. Alter’s total debt of $6.9 million consists of a $500,000 home mortgage and a loan of $6.4 million from Capstone Capital Partners. On September 26th, Alter said via text message that the Capstone loan will finance construction of 18 townhomes to be built on vacant lots at 5912 and 5916 Harold Court in East Austin, ‘all of which are to be sold below the median price for Austin.’ He said this project is a small business venture he’s undertaken with his sister, (whose name we will withhold here).”
(This was part of the Bulldog’s Government Accountability Project (GAP), which catalogs online various disclosure forms that local governments don’t post online. You must submit a valid email address to get on the site. I used it in research for this story.)
I apologize for having missed that story at the time.
Learning that Ryan Alter was a developer caused me to wonder whether he should abstain on the upcoming HOME (Home Options for Middle-Income Empowerment) vote, scheduled for Thursday December 7. As a developer, especially a high density developer, it seems almost certain that Alter’s potential for profits would increase if the HOME proposal passes. It would change the definition of single family zoning categories to allow three units per single family lot, “by right (meaning no zoning change needed)” where currently only one or two units can be built.
Even if Alter being a developer didn’t qualify as an official conflict of interest, it sure seemed worth reporting as the Council heads for a vote on HOME.
So I began researching, visited the property and on Sunday sent Alter some questions in writing. I included fact checking questions on what I had learned about the development and asked if Alter felt like he should recuse himself from the vote — given that he might be setting himself up to make profits in the future.
I asked two separate questions about recusal; whether he thought the letter of the ethics rules required him to recuse and, second, whether he thought the spirit of those rules required a recusal.
To the first Alter replied, “No. I no longer have any financial interest in this development.” On the spirit of the rules, he said, “No. As mentioned before, we no longer hold any stake in this project and have no intention of pursuing future development.”
The Travis Central Appraisal District (TCAD), however still listed the owners as “5912 and 5916 Harold Court LLC (Limited Liability Company).” That is a LLC for which Ryan Alter is listed as the “agent” and both he and his sister are listed as “officer(s).”
Street view of condo project developed by Ryan Alter and his sister on Harold Court (left) and view of back side of one of two rows of units. At top is view down the center where the garages and entries to all the condos are. Photos by Adela Mancías.
So I asked for more details, like who owns the property now and when did it change hands. I was also skeptical of Alter’s claim that he had “no intention of pursuing future development.” I mean he could change his mind at any point in the future — and potentially make money from rules he helped push through on the Council. As I waited for answers I did more research online and came upon the following on the Travis County Clerk’s website:
“Foreclosure Affidavit: 5912 and 5916 Harold Court LLC.” The “Place of Sale” was listed as “the rear sallyport of the Travis County Courthouse,” followed by the explanation “A default exists under the Deed of Trust.”
Shortly after that I checked my email, and Alter had replied, “Capstone Capital Partners (his lender) now owns the development.”
In other words the lender foreclosed on the property and took it back from Alter and his sister, or from their LLC. Now, Alter’s answer that he had “no intention of pursuing future development” made more sense.
The Signs Were There
As I researched the development over the weekend, I began to suspect there were financial difficulties. First of all, the development is in a rather remote location. It is three-tenths of a mile west of US 183, not far from where the City has facilities for the Watershed and Fleet Departments. Making the property more remote, Harold Court dead ends a block or so west of the Alter development. So the only access to Harold Court is from US 183/Ed Bluestein Blvd. Currently there are a few semi-rural properties and a few more recent houses also on the street.
As can be seen in the photos the units face each other along a common driveway. There is a trail and nature preserve nearby, but there is almost zero green space left on the property itself.
It was not clear if construction was complete (Alter later said it was not), but the buildings were standing and it wasn’t apparent from the outside whether they were complete or not. According to TCAD and Zillow only two units had been sold.
Both the sales were in February of this year. In the state of Texas final sale prices are not made officially available to the general public. According to Zillow, however, the last listed price before the two units sold was:
- $590,000 for a 1,690 square foot, 3 bedroom, 3.5 baths; and
- $460,000 for a 1,216 square foot, 2 bedroom, 2.5 bath.
This also looked like Alter was batting only one for two on his promise to the Austin Bulldog that “all” the units would “be sold below the median price for Austin.” According to the Austin Board of Realtors, the median home price within the City of Austin in February was $530,000 — almost right in the middle between the two apparent sales prices for the Harold Court condos.
In my first round of questions I asked Alter if he thought “the sale prices are consistent with the commitment you made in the Austin Bulldog;” that is that all the units would be “‘sold below the median price for Austin.’”
He replied, “I do believe the sales prices were consistent with this statement for multiple reasons. First, you are citing data on the date of close. However, when they were placed under contract, the median home price was higher. Secondly, if you look at the median home price just the month before (and these once again went under contract even before that, when prices were higher), both of these were lower than the median home price in Austin.” He also included his own link.
Empathy for the Council Member
I personally feel for Ryan Alter. Everyone makes mistakes and sometimes mistakes are very expensive and embarrassing. It must have also been a lot of stress going through the whole ordeal.
Council Member Ryan Alter
At the same time, however, Alter and his colleagues are bubbling over with confidence that their New Urbanist ideology is what is needed to solve Austin’s affordable housing crisis; and absolutely convinced that HOME needs to be rammed through immediately.
Alter’s bio on the City website even brags about the now foreclosed development, “Trained with the analytical skills of an engineer from UT Austin and graduate of Harvard Law School, Ryan has the tools to tackle any challenge facing our community. Beyond his service at the Capitol, Ryan started a small family business with his sister that demonstrated development focused on smart growth can achieve greater affordability for Austinites.”
As the currently popular saying goes, that hasn’t aged well.
In my view, it would make sense to interpret Ryan Alter’s failed development as a warning to New Urbanists and their Council followers to slow down and try their ideas out on a smaller scale first? After all, a lot of people’s investments in their homes and neighborhoods are at stake. According to figures provided earlier by City staff, for a previous Independent article, HOME will change the zoning definitions for an estimated 171,944 parcels, or homes. Some knowledgeable people maintain that is a low estimate. Using the City’s number, however, and the Census Bureau’s average of 2.28 people per household in Austin, that is more than 390,000 people.
I’ve been following and participating in City governance for over 40 years and I cannot recall any Council action which came near that magnitude as far as affecting people’s homes. The hubris is actually rather stunning.
Plus, Alter’s development is not the only New Urbanist dream to wash up on shore lately. As the Austin Monitor reported in early October, “A parking-free, 30-unit apartment building that gained attention as one of the first attempts to bring ‘missing middle’ housing downtown (on Nueces Street near 12th Street) has been turned over to its lender after failing to generate enough occupancy to operate successfully.”
The two New Urbanist marquee items for this project were that it did not have parking and featured only three bedroom apartments, which tenants would rent separately from the building owner/landlord.
Here’s just part of a gushing article that ardent New Urbanism evangelist James Rambin posted about that project less than two months before it went back to the lender, “The project, which opened last year, occupies a small quarter-acre site and reaches an impressive density of roughly 120 units per acre while still accommodating the generally midrise character of the surrounding neighborhood — all of this is made possible by eliminating parking, making Capitol Quarters the first car-free multifamily residential building to break ground in the entire city. In such a walkable, transit-rich central neighborhood, it’s a no-brainer.”
This is the same group of folks who insist that the HOME initiative will work and often portray anyone who disagrees as old, selfish and racist.
When Bloomberg wrote an article saying New Urbanism has not worked anywhere, one published New Urbanist retort maintained that the Bloomberg characterization wasn’t fair because New Urbanism hasn’t really been tried anywhere.
Deep Thoughts With Vanessa
Then there’s the not so deep intellectual analysis that Council Members are applying to the HOME initiative. For instance Council Member Vanessa Fuentes recently posted a video on social media giving her analysis of how the housing crisis happened, “Austin is growing quickly, but the truth is we’re not equipped to handle this level of growth. That’s because for decades we’ve had City leaders who pushed against this growth by saying if we don’t build it, people won’t come.”
Council Member Vanessa Fuentes
Fuentes didn’t specify which leadership she was referring to, but shortly thereafter the City Demographer released a report on the previous decade: “Between 2010 and 2020, Austin added more housing units than ever before, expanding by over 90,000 units. New York and Houston, the only cities to add more units than Austin during this period, have populations that are at least twice as large and added units at a slower rate than Austin.” (Actually, New York City’s municipal population is almost eight million, around eight times that of Austin.)
Mayor Kirk Watson
Let’s close with some words of wisdom on this from Mayor Kirk Watson: “We should recognize that really good people can often disagree. . . I see people who share a love for our home (city) and have good motivations. . . My recommendation is that we cool off for a spell. . . We could all benefit from a little time and perspective.”
Oh dang. That was Watson talking about the Zilker Park Plan, not HOME. My bad.
But, maybe, just maybe, it might be a good idea to slow down and try HOME out on a smaller basis first.
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