BG BLOG: Five City of Austin Issues to Watch in 2024
For most of 2023 it felt like the topics of interest inside city hall sounded like a record stuck on repeat:
Housing. Homelessness. Transportation.
Housing. Homelessness. Transportation.
Housing. Homelessness. Transportation.
There’s a good reason for that, since those three issues are of major importance for voters and most circles of leadership around the city. And all three will grab plenty of attention in 2024 and probably many years hence.
However, plenty of other matters could emerge this year and catch some city hall watchers by surprise. We decided to look at five low-profile issues that could become much bigger by the end of the year.
✅ ECONOMIC DEVELOPMENT INCENTIVES
In September, City Council approved an incentives package for NXP Semiconductors that will bring $290 million in local investment, marking the first time the city had approved a substantial boost for a specific company in seven years.
That pause was mostly due to the temperament of the previous Council(s) against directing substantial resources and tax breaks to major corporations. The thinking was that a better approach would be to enact macro policies promoting the growth of small- and medium-sized businesses, to raise middle-class incomes to combat affordability and displacement issues.
Mayor Kirk Watson has pretty explicitly stated that the city will need to be more open to incentive packages going forward, and an ongoing analysis of local Chapter 380 policy could expand what kinds of deals the Economic Development Department has to pursue and execute.
Also included in the mix is the role of the still-evolving Economic Development Corporation, which was created to operate more quickly and nimbly than other city entities. However, it has thus far found itself constrained by what the city’s legal department will OK in terms of deal structures and overall goals.
✅ IMPACTS OF THE HOME INITIATIVE
Anything involving housing and density is bound to touch on a dozen or more areas of life in Austin. And with the approval of the Home Options for Middle-Income Empowerment in December (HOME), it’s a safe bet that city legal and many other departments will be tying up lots of loose ends while working to implement the move to allow up to three housing units on traditional single-family lots.
Any urbanist will argue that this is what you get when changes to the land development code, with lots of trial and error and ongoing work to address unintended consequences.
One of those was brought up in a December meeting among disability advocates who said the removal of a cap on unrelated residents living in a home could lead to the problem of unregulated group homes for the disabled sprouting up around the city. With affordability issues impacting the disabled on top of healthcare needs, their argument is HOME could open the door for unscrupulous healthcare providers preying on those with disabilities and packing many residents into new group homes without proper oversight.
There’s also the possibility that allowing three homes on a lot could lead to one or more of the new units being operated as short-term rental sites. With Austin as one of the most popular tourist destinations in the country, the law of supply and demand pretty much predicts that allowing more houses throughout the city will open the door for speculators to finance units with the only goal of operating them as STRS.
Speaking of which…
✅ SHORT-TERM RENTALS
This is one that had been a solid middle-burner issue around city hall for years, despite periodic spikes in interest from the public. The crux of the matter is the city can’t solidly enforce coding issues with short-term rental sites that are seen as a nuisance without comprehensive data from STR platforms, which they resist turning over.
The sidelight discussion around STRs during the HOME Initiative passage made it clear that STRs have moved up the list of important matters for City Council in 2024, which increases the likelihood that city legal and other stakeholders in the issue will come together to craft some kind of regulatory package that makes everyone at least sort of happy.
This could be one of those bitter pill issues those no one is going to walk away from feeling happy. Recent court rulings have drawn out some solid lines around what kind of regulations cities can pursue against STR sites and platforms, which means the most that residents can hope for is trying to institute the concept of platform accountability to increase transparency, and collection of Hotel Occupancy Taxes. There’s also the looming likelihood that any attempt to regulate STRs could draw attention from the state legislature in 2025 and lead to another preemption of local control, though one state group is already a regular lobbying presence among lawmakers making the case for why the industry needs to face some constraints.
✅ A 2024 BOND PROPOSAL
This one is a case of satisfying wants and needs against the fiscal realities in the municipal borrowing market.
Last spring, the city’s financial staff delivered a sobering picture: at that point the city had $3.5 billion in authorized public improvement bonds, with $1.8 billion of that still to be issued in the lending markets. Some of that total came from packages for mobility improvements and affordable housing that came after the 2018 bond package that authorized $925 million in borrowing to fund needs in seven priority areas.
That total has possible effects on the city’s bond rating and, thus, borrowing costs, which could raise the price tag on whatever would be included in a 2024 package. Worth noting; the city and bonding/election strategists have prescribed an every-six-year cycle for bond elections, which interim city manager Jesús Garza noted was disrupted by recent intermittent proposals.
That mix of factors is why Garza and others have pushed to wait until 2026 for the next bond package.
Even with the impact on bond rating for the city - and the possible sticker shock for voters who’ve also approved an assortment of packages for Austin schools - some on the dais see a need to ask voters for more money in the November general election. Let’s not forget that general elections tend to have higher turnout and can be more favorable for bond voting than midterm even-year elections.
Aside from the library vision plan and whatever needs have been identified for cultural purposes, including there are plenty of wish list projects that bond money could address: maintenance and improvements for parks and recreation, expansion of public safety facilities, more affordable housing funds, more mobility and transportation needs, and utility improvements to address the likelihood of more extreme weather stresses.
Some of those needs have been cataloged in other vision plans and analyses, which would make a bond proposal somewhat easy to assemble. Still, given the city’s desire for extensive public input on all matters, those pushing for a 2024 package would need to get the process started now to get the language approved in late summer for placement on a fall ballot.
✅ AUTONOMOUS MOBILITY
The attractiveness of the Austin market suggests that there’s a “game on” mentality for the private side, which puts the onus on city leaders to find solutions to the public safety issues that have presented themselves and will continue to pop up as the fleets of local AVs continue to grow.
There’s been plenty of high-profile news around the AV industry in recent months, and at the boards and commissions level, the local discussion has focused heavily on the public safety issues that driverless vehicles present. Chief among those is the difficulties police and fire personnel have had in trying to direct AVs to move out of the way of emergency vehicles near the scene of an accident.
With AV platforms protected from almost any local-level regulation thanks to state laws, there are lots of questions about who will do what in a city that’s dealing with surging population and mobility needs while also growing mass transit. It will be important for the platform companies to take a cooperative stance with the local public safety organizations, and offer up as much insight as possible into their operations and ride data so the city can work to incorporate driverless vehicles into the mobility picture safely.
CONNECT WITH US
We invite you to connect with Bingham Group as we delve into these topics and many more throughout 2024. Whether you have questions, insights, or a desire to join the conversation, don't hesitate to contact us.
//A.J. Bingham, Founder & CEO, Bingham Group
🟪 Contact A.J. at: aj@binghamgp.com