Higher Cost of Living in Austin

COST Commentary: Ed Wendler Jr. has written numerous development related articles, such as the one below, and continues to be an Austin voice of sound reasoning and logic, based on facts, proven experiences and sound principles. His insightful articles expose a sea of poorly formulated Austin public policies and regulations developed by inexperienced, misinformed and ideologically driven elected leaders and key Austin City employees. Austin already has the highest cost-of-living of all major Texas Cities and is following a path which will further increase the tax burden and cost of living on Austin citizens with a disproportionate share being placed upon lower income citizens.

In the article below, Ed Wendler Jr. addresses several areas of Austin’s development and downtown plan which are achieving the exact opposite results of those which are promised, promoted and desired. They all lead to placing greater “tax” burdens on citizens, displacing lower and, in many cases, medium income citizens; depriving them of the living style and life they would choose and reducing their quality-of-life.

Below Wendler’s article is a responding ‘letter to the editor’ by the Chairwoman of the Downtown Austin Alliance. The letter indicates a lack of appreciation for the true impact of public policies which are resulting in higher cost of living for citizens. It states that increased living density in the urban core benefits every citizen. What is doesn’t state is that increased density results in increased congestion and higher housing prices.

The City of Austin is engaging in social engineering to change people’s choice of transportation to public transit. This will fail and the result will be wasteful spending of tax dollars, greater congestion, increased pollution and greater safety hazards. There are no successful models for significant change in people’s priorities and choices of transportation for the simple reason that dependence on public transit reduces opportunities and quality of life. Any public transit which could be competitive with private transportation would be financially unsustainable.

Public transit drawbacks are being proven in almost every city. Texas cities of Dallas, Houston and Austin all have fewer public transit riders than they had 12 years ago while they have spent billions and added expensive, ineffective trains to support and encourage public transit use. At the same time their populations have been among the fastest growing in the nation. And, while transit ridership has declined, the cost per rider has far outpaced inflation; again, unsustainable.

Austin’s Cap Metro recently celebrated the fact that ridership in their fiscal 2011 had increased 1 million over the ridership in 2010. With flagrant lack of transparency, Cap Metro did not mention the 2010 ridership was 1.5 million less than in 2009. So 2011 ridership did not even return to the 2009 level. Nor did they mention that 1 million boardings in a year is less than 2,000 people per day taking round trip rides on the transit system. Cap Metro claims the number of round trip equivalents on the Red Line Commuter train have increased about 450 people to a total of 900 people when they expanded the train schedule to provide more trips throughout the day. What they don’t say is that the train increases congestion, produces more pollution per passenger than if every passenger was in a new car and the taxpayer subsidy per two way rider is about $20,000 per year; enough to provide each passenger a new car with gas every year.

Public transit plays a very important and major community role in providing transportation for those who depend on it daily and have no other choice. Perhaps the most negative community impact of wasteful spending on ineffective transit, such as trolley-trains, is that it results in degrading the backbone bus transit system, serving the vast majority of riders and mostly without alternatives, by increasing fares and reducing service.

The letter to the Statesman editor states, naively: “Downtown Austin is an exporter of taxes.” This is true of almost every downtown in the nation. However, there cannot be a ‘Downtown’ without citizens who live outside of downtown, throughout the city and region, who desire to travel downtown for work and private business or to enjoy shopping, dining, entertainment, etc. Few can afford the exorbitant prices of downtown living and few families desire this environment for raising children. Austin’s new Comprehensive Plan is ignoring major lessons from other cities. As shown in the 2011 census, the living choices of citizens across the nation are resulting in the majority of city downtowns declining in density while living areas outside central cities’ are increasing in density. Austin’s path to congesting downtown streets with hazardous trolley trains will degrade the desirability of downtown and result in unsustainable tax increases.

It is absurd for city officials to suggest and for citizens to believe that downtown living will reduce “sprawl.” A few thousand people in this 1.7 million population region live downtown. Downtown population could double tomorrow and the impact on “sprawl” could not be measured. The City’s focus on tiny numbers of affordable housing units in the downtown area is not a productive pursuit in dealing with the major overall cost of housing issue.

The fact is “sprawl” has produced numerous positive aspects of the central Texas community: It has provided homes which would be otherwise unaffordable for many; it has reduced the otherwise major additional increase in congestion resulting from Austin’s lack of attention to adequate road systems to meet the needs of its growing population; it has reduced driving per capita for many years, recognizing the work commute, which is less than 20% of driving, may have increased slightly, but, the other 80% of driving has reduced substantially because living in outer city areas is closer to many daily needs of shopping, medical, entertainment, dining, schools, etc.

City development regulations should fully accommodate market demand for development of appropriate areas of greater living density for those who can and prefer this living environment. It should not be promoted with coercive regulations and the impact on the character and affordability of current neighborhoods should be fully considered.

Count on higher living costs in New Austin

Ed Wendler Jr., Local Contributor, Wednesday, Nov. 9, 2011
Austin-American Statesman

As a born-here Austinite, I keep trying to put my finger on what’s different about the New Austin. It’s similar to the experience of seeing an old friend who looks different. You aren’t quite sure what’s changed. Plastic surgery? New hair style? Maybe just new glasses?

An acquaintance who is active in City Hall politics made the observation that New Austin practices “trickle down economics.” If so, it’s ironic for a city that claims to be the liberal oasis in conservative Texas. I think he is on to something.

I recently read “Urban Fortunes” by John Logan and Harvey Molotch. It’s a progressive, almost radical take on the economics of municipal growth, and it argues that cities are structured to promote increases in rents and property values, most times decreasing existing residents’ enjoyment of their homes and lives and displacing those who can’t pay.

The authors distinguish between “exchange value” and “use value.” “Exchange value” is their broad term for the economic value of land and buildings. The general theory is that the higher the total rent, which includes mortgage payments, the higher the property value. Increasing value can be accomplished by adding units, increasing rent per unit, or a combination of the two. Cities increase “exchange value” by investing in infrastructure to allow more intense land use, zoning land for more units, allowing taller buildings, granting variances to rules or changing land-use patterns, as with urban renewal programs.

“Use value” is the personal satisfaction we get from raising our children in our homes, walking our dogs around the neighborhood or taking the kids to the Trail of Lights (oh, sorry, they canceled it again).
The authors argue that cities always act to increase “exchange value.” In many ways that framework fits Austin. Here are a few examples:

Austin adopted “vertical mixed-use” zoning that allows apartments 60 feet high with a density of about 70 units per acre. As a result, an old apartment with affordable rents will be torn down to build a project with three times as many units at twice the rental rate. Residents enjoying affordable rent are displaced. Existing neighbors’ “use value” might go down because of the impacts of increased population. Supporters call it “good for the tax base.”

Austin has a Riverside Drive Plan with the stated purpose of replacing a “blighted” area with new mixed-use development and urban rail. The idea is to tear down apartments with low rents and replace them with more apartments at higher rents. The demographics change. The elementary school is closed because there aren’t enough kids, and the “use value” of existing residents goes down. Austin calls it promoting “infill development.”

Austin is adopting a Downtown Plan that promotes growth and advocates spending on downtown parks and infrastructure. That $300 million will be used to subsidize the area with the highest rents in Austin, both residential and office space. The city’s website says that “we should care about downtown because its success is central to the prosperity of the city and the region.” Reminds me of “what is good for GM is good for America” and sounds a whole lot like “trickle down economics.”

Austin’s push for higher “exchange value” even applies to parking space. Austin now charges for nights and weekends at downtown parking meters, the same thing as increasing rents. Residents who enjoy downtown but can’t afford parking are displaced. Some have even suggested meters in front of homes in neighborhoods behind South Congress Avenue. The “exchange value” of the retail on South Congress Avenue would increase. The “use value” for the residents decreases. Supporters call it sound economics.

In many ways, this City Council is the most pro-growth, go-go council in memory. Unfortunately, its push for ever higher land values generated by higher densities and higher rents will cause Austin to be unaffordable for many, and many times it will negatively affect existing residents’ lives.

When a politician or advocate says “it’s good for the tax base,” watch out. That means the rent is going up. Now that I think about it, I’m not sure New Austin’s glasses are very flattering.

Wendler is an Austin developer.

Austin’s smart growth
Letter to the Statesman Editor

Re: Nov. 10 commentary by Ed Wendler Jr., “Count on higher living costs in New Austin.”

Wendler suggests increased density results in a less enjoyable and more expensive place
for Austinites. I think it is just the opposite. The bottom line is, Austin is growing. By planning
for and absorbing some of this growth into the urban core and transit corridors through-
out the city, every citizen benefits. Downtown Austin is an exporter of taxes. According to the
Downtown Austin Plan, it would take an area eight times the size of downtown to generate
the same taxable value. The taxes generated in downtown help to pay for quality education,
cleaner parks and increased safety throughout the entire city. All of these things add to the
“use value” Wendler claims is declining.

Austin is changing. However, smart growth and increased density at the right places are the
keys to keeping the character of Austin.

Board chairwoman
Downtown Austin Alliance

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