|It has long been my belief that the City of Austin places an undue burden on its citizens when it comes to developing commercial land. The costs are outrageous and many of the city's policies ignore basic individual property rights, one of the fundamental tenants of our entire democracy. What most people don't seem to understand is that these developmental burdens don't necessarily prevent commercial growth, they just ensure such growth is dominated by corporate interests.
I found this parody slogan on the web and thought it was perfectly appropriate to my message
Firstly, let me state that I am NOT opposed to local regulations - at all. I think they are protective, generally well-intended, and necessary for society to function. But there is a line of reason that the City of Austin crossed long ago and is increasingly aiming to further surpass. Anyone who has spent any time trying to develop in the City of Austin knows that developers are notoriously at the mercy of city staff and neighborhood groups. No matter how many concessions are made, there always seems to be something else holding up development. This becomes a huge financial burden.
The problem stems from a mentality of collectivism gone awry. For whatever reason, Austin communities regularly feel entitled to dictate the specifics of new projects. They are willing to spare no expense when it comes to the already cumbersome design process, meanwhile enjoying the convenience of not having to pay the bills required to accomplish this. And the city allows it to happen. There often appears to be an engrained mentality that if the development exceeds a single-family bungalow, the developer(s) must be in cahoots with local officials and be extremely deep-pocketed. But in my development experience, this is rarely the case.
This would be a more understanding, perhaps even forgivable point of view if Austin took a more lenient attitude to zoning and development. But the unbelievably complicated set of City Ordinances in Chapter 25 (better known as the Land Development Code) make it virtually impossible to negatively impact neighboring properties. An application for a small commercial project will be reviewed by literally dozens of city staff and will likely take a minimum of a year to get city approval, assuming the application gets approved at all.
In my personal opinion, commercial development projects (and residential projects for that matter) should be governed on a case by case basis where common sense is applied to a common community goal. It's not hard to comprehend why we might want to prevent people from building a chemical supply store in the middle of a neighborhood, or a strip club next to an elementary school, but Austin's approach is to design a black and white playbook for any scenario, and this just doesn't work. Moreover it creates a hugely disproportionate fee to valuation ratio. This essentially means that a one-hundred thousand dollar project is subjected to the same level of scrutiny [and consequently cost] that a one million dollar project would be. This makes smaller projects very costly.
I strongly believe that this mentality will be the undoing of Austin within the next ten to fifteen years. I won't go into all of the details in this post, but the "Keep Austin Weird" mentality is a fading notion of the past; it is a marketing tool for the city, and increasingly just a hoax. Unless one is backed by huge corporate coffers, it is virtually impossible to surmount the sea of local development bureaucracy, and that makes it damn hard for 'weird' people to develop their visions.
The irony is that the very people in Austin who likely reject corporatism are the ones on the front-line demanding more costly and impassible bureaucratic regulations. Which brings me to my most recent experience on the subject.
2200 Tillery Street
I've sat on the East MLK Combined Neighborhood Planning Contact Team since 2007. It was a group I helped to reboot after it sat defunct for almost six years. Like all other planning contact teams, the contact team is responsible for creating a long-term vision of a planning area. It also oversees future land use cases (one half of Austin's zoning maze), and helps dictate Capital Improvement Projects (CIPs). The group has absolutely no legal authority and its rulings are never binding. But curiously, it is codified by the City (§25-1-805), and developers seeking to change future land use tables are still required to seek approval from the team.
For the past five or so months our team has heard and debated arguments over a commercial piece of property located at 2200 Tillery St. We have met with Richard Crank, the property's representative, at least two times since October of 2011. We have also met with representatives of the JJ Seabrook Neighborhood Association on several different occasions.
At our January meeting we heard again from the president of the JJ Seabrook Neighborhood Association. And once again the contact team was asked to support a measure that would postpone the planning commission hearing for another month. This would be the third consecutive postponement of the hearing and would bring the property owner(s) to the seventh month they have had their property tied up with City of Austin business.
The property is currently zoned commercially and has a future land designation of mixed-use. The previous property owner defaulted and the mortgage company now owns the property; the mortgage company wishes to sell the property. The property is not particularly viable in its current configuration, not because it's a useless building, but because the city's parking space calculator inhibits the type of use most suited for the structure. As an aside, street parking is not factored into these calculations despite it being overwhelmingly abundant in the area. The owner feels it would be difficult to sell the property for its current use, but a number of city ordinances prevent the owner from using the building for what it was originally intended.
I have asked on several occasions since October what the JJ Seabrook neighborhood association would ultimately like to see happen to the property. Unfortunately the only consistent response I receive is with respect to mixed-use and/or residential development. I even received an email from someone in the neighborhood association on September 28th, 2011 that stated, "I think that the bank/mortgage holder should demolish the building and devide [sic] the land into 4 lots (at least 10,000 sq ft--quarter acre--) to build single family detached homes." Sufficed to say I quickly wrote back the many reasons why this would not occur. Unfortunately the amount of money that would be required (especially within the city's complicated guidelines) would be financially devastating to the owner, and thus not reasonable.
Although my position on the matter has been consistent since October, I once again presented an economic case at our January hearing. According to TCAD, the property is valued at $834,857. At a 2.3% tax rate, this means the property owner pays over $19,000 a year in taxes alone. In the seven months that the property has been tied up in the Austin bureaucracy, they've paid over $11,000 in taxes - for a property they can't currently do anything with! This figure does not even factor the few thousand dollars of filing fees they've had to pay the City of Austin nor whatever fees their engineers and lawyers are collecting for handling the case (possibly tens of thousands of dollars).
But it does not stop there. Richard Crank has been completely transparent about the owner's intentions, has met with multiple neighborhood bodies numerous times, and has been willing to restrict a dozen uses from the property with a conditional zoning overlay. He has even been willing to enter into a private contract with the neighborhood outlining specifically desired improvements and limitations.
My argument is that unless the neighborhood association has a specific compromise that they're willing to consider, it is not fair for them to continue delaying the process while the property owner is left to front the bill. Thus far the immediate neighborhood has rejected my position. It was even suggested to me by a JJ Seabrook representative (after I presented my economic argument) that I should not be defending or sympathizing with the mortgage company.
I abhor banking and mortgage companies; I speak and write against them regularly. However, this should not, and legally does not change the fact that they have just as many rights to fair case management and expediency as everybody else. In fact, I am often left surprised that the City of Austin has not been hit with a class action suit for allowing this type of negligent behavior to hold up property cases.
I will be very curious to see what happens, but even more curious to try and learn what the total cost of doing business with the City of Austin works out to be for this developer. My guess is that they lose over $50,000 to the Austin bureaucracy (or more than 6% of their current valuation).
So my problem with the entire system is simple. There is far too much power granted to neighborhood associations and similar groups to raise problems that may not even exist while private entities are left to front the bill. In some cases the neighborhood groups do not even represent the true intentions of a community. Rather they represent the desires of a fractional segment of that community. Incidentally, the segment that is very vocal and interested in regulating everything not belonging to them. I know for a fact that our contact team in no way represents the greater community. We are essentially a group of twelve relatively young white people debating cases for a community of more than 17,000 people, most whom are minorities.
But my intent is not to condemn neighborhood associations (nor our own contact team); I participate in many and believe they serve a very good purpose. Rather my intent is to condemn a city that grants neighborhood groups the power to stop development while simultaneously forcing the developer to conform to thousands of regulations, all of which have already been designated by the community in the first place, and all while paying a premium to do so!
One of these systems has to give and until it does, I don't see how the problem is going to get any better. My personal preference is a simple five-fold approach:
- Work to ensure that neighborhood associations are strong and well-represented
- Get rid of the one-size-fits-all development regulations, codes, and fees; every development is different and has unique challenges and obstacles
- Have a single individual case worker for each commercial development and require them to serve a the liaison between the active parties
- Have a legal appellate process set in place for cases that cannot be resolved
- Require that all development projects have a fixed time in which business is resolved
So then coming full circle, why would I tie this into corporatism? Because as the problems that I've described continue to worsen (and they are definitely worsening), the ability of small businesses to develop anything on their own trends towards being impossible. The average business cannot simply float tens or hundreds of thousands of dollars over the course of a year while attempting to stay financially afloat and be expected to meet the minute demands of community activists. A community might see a few light poles as nice-to-have, but the developer of a $200,000 project is required to see them as 10% of his or her budget. It is simply not possible to fulfill these demands, especially with the regulatory oversight costs (read: C.Y.A.) required by the city. This essentially means that as Austin continues to mature, more and more corporate interests will be served as they're the only ones with the time and money required to overcome these hurdles.
If the residents of Austin desire to see corporate interests take over the skyline, that's fine by me (though I personally don't support it). I only ask that the city stop toting itself as "weird", because in my opinion, there's nothing worse than turning a way of life into marketing ploy for corporate America.