Editorial Board
American-Statesman
Sunday, September 26, 1999

Austin's downtown renaissance shouldn't spell the end of moderately priced housing in the central city.

But you wouldn't know that from Jim Patterson's story. Patterson fought eviction from his $350 a month apartment on South Congress Avenue in a city in which the average two-bedroom apartment rents for $880 a month. The new owners of the property want to construct a luxury complex, The Reserve at Congress. They settled with Patterson last week by promising to find him a place to live by Monday.

About 40 percent of the 110 units at River Woods, Patterson's home, were reserved for low-income people under an agreement between the previous owner and a federal agency.

Although city government was not involved in Patterson's situation, it nonetheless should spur actions by leaders in a city in which even the middle class struggles to afford housing. Federal housing aid targets a family of four with an income of about $45,000 a year, says city housing director Paul Hilgers.

If the middle class flees the city, Austin will lose a valuable tax base, which is another reason why leaders need to aggressively address the housing problem now.

Silicon Valley manufacturers have started a $20 million trust fund to help those priced out of the housing market by the industry's lucrative salaries and stock options. The money will be used to help first-time homebuyers with down payments and closing costs, encourage the construction of affordable apartments and provide grants to alleviate homelessness.

Silicon Hills' corporate leaders should study Silicon Valley's approach to the housing problem.

Local government can use tools at its disposal to address the problem, too. City leaders should streamline the permitting process, which drives up housing costs.

Federal housing dollars the city uses to subsidize homes and apartments come with enough strings and red tape to strangle any well-intentioned project. And the money is not enough to meet the demand for affordable housing, says Hilgers.

The Austin City Council recently created a $1 million trust fund to help develop affordable housing. But $1 million won't get the city far when about 41 percent of Austin-area households can't afford to buy a house at market rates. The city needs a long-term revenue source for the fund if leaders expect to put a dent in the housing shortage.

The city's downtown development ventures with private companies are a potentially lucrative source of money for the housing fund. The city is leasing vacant or underutilized public land downtown to developers and companies, including Computer Sciences Corp. and the West Avenue Lofts by Post, which had its groundbreaking Wednesday.

City Council should consider designating a percentage of revenues from its leased land to the housing trust fund. "That's not a bad idea at a time when the city is aggressively pursuing affordable housing options and examining continued sources of income for (housing)," Mayor Kirk Watson said.

City officials already require that a percentage of apartment units in which the city is a partner be set aside for persons with low-to-moderate incomes. Though commendable, the policy hardly provides enough affordable housing downtown. That's why new approaches are needed.

Austin's downtown renaissance doesn't have to end with the displacement of low- and moderate-income residents like Patterson. Civic and public leaders can create policies that promote a robust downtown and simultaneously develop housing for all income groups.

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By Andy Alford and Angela Shah
American-Statesman Staff
Saturday, September 18, 1999

A state district judge Friday temporarily stopped the eviction of an Austin man in a dispute that could slow plans to build a new luxury complex on South Congress Avenue.

Trammell Crowe Residential Development wants to demolish the River Woods complex at 1007 S. Congress Ave. to build luxury apartments. But attorneys for one resident said the plan would eliminate badly needed affordable housing in Austin. About 40 percent of River Woods' 110 units were reserved for low-income people.

Travis County District Judge Suzanne Covington issued a temporary restraining order preventing the eviction of Jim Patterson, who has lived at the federally subsidized complex for two years. The order is in effect for two weeks; attorneys hope to have a hearing in the meantime about how the complex's agreement to provide low-income housing was canceled.

Lured by the growing interest in urban living, Trammell Crow has filed plans with the city that show the company intends to build a 253-unit complex with a five-level parking garage on about six acres on South Congress just south of Riverside Drive. Residents who lived at River Woods were given notice last month that they must find new homes. Most did.

However, Patterson refuses to leave. He has agreed to continue to pay his rent while the order is pending.

Patterson, 47, lives in one of 40 apartments reserved for low-income tenants after taxpayers bought the property in the late 1980s as part of a savings and loan bailout. Rents were capped on a sliding scale in those units so that some tenants paid no more than 30 percent of their household income toward rent.

River Woods owner George Yonge bought the complex from the federal government in 1991. The Federal Deposit Insurance Corporation has not yet disclosed how much of a subsidy, if any, Yonge was granted. In return, Yonge agreed to provide affordable housing.

Federal rules stipulated that the requirement to provide affordable housing was tied to the land for 40 years, binding each successive property owner to providing affordable housing. Landowners could be released from the agreement if the property were destroyed or became so dilapidated that rebuilding would be economically unfeasible.

Six years after signing that agreement, Yonge petitioned for release. State and federal agencies responsible for oversight granted his request.

"The residents never had an opportunity to contest or have input into the decision to release," said Fred Fuchs, a Legal Aid attorney representing Patterson.

Clay Barton, attorney for Trammell Crowe, said he was unfamiliar with the negotiations surrounding the cancellation of Young's contract to provide affordable housing.

"(But) we're tuned into the issue (now)," he said. "We're looking into this."

No low-income units are planned for the new apartment complex -- tentatively to be called the Reserve on Congress.

Patterson said he hasn't been able to find a comparable apartment for the $350 a month he pays now and has asked Legal Aid of Central Texas to help him try to prevent River Woods' demolition. Legal Aid, a nonprofit advocacy group for the poor, has filed a lawsuit asking that River Woods not be demolished.

You may contact Andy Alford at aalford@statesman.com or 445-1774.

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Riverwoods tenants win court injunction to save complex

Daily Texan Staff

Tenants at the Riverwoods apartment complex at 1007 S. Congress Ave. may have another chance to save their property from being demolished.

Riverwood representative and tenant James Patterson took his case to a Texas district court Friday and received an injunction from Judge Suzanne Covington prohibiting the destruction of the complex unfil an independent inspection of the apartments is conducted.

Patterson's lawsuit contests an inspection by the Texas Department of Housing and Community Affairs declaring the apartments uninhabitable.

Fred Fuchs, an attorney for the Legal Aid Society of Central Texas, a non-profit firm that represents low-income residents like Patterson, said an inspector from Embry Ltd. of San Antonio in 1997 deemed the complex no longer a safe place to live and not economically feasible to repair.

A year after the report, 109 of the 112 units still housed residents, Fuchs said.

Residents were not informed they had to move until Sept.16 -seven days before the arrival of the demolition crew.

Although housing department staff rejected the inspector's report, the executive director of the housing department, Larry Paul Manley, submitted the report to the Federal Deposit Insurance Corp., which controls Resolution Trust property, and the land restriction reserving the complex for low-income residents was removed.

But Patterson disagreed with the way the inspection was carried out.

"That's so obviously contradictory to the truth," Patterson said. "The political head of TDHCA went against (his] staff and got a federal agency to do what he wanted."

Because the FDIC accepted the

report, 35 percent of the housing no longer had to be reserved for those with low incomes as mandated by the Land Use Restriction Agreement enacted in 1991 when Riverwoods was sold to the Resolution Trust Corporation.

The agreement was to last until 2031 or until the housing department said the property was too unsafe to be habitable for the tenants. The agreement could be also terminated if it was too costly to fix damages.

According to a statement released by Patterson, Trammel Crow, the company which acquired the property, intends to destroy the 112 units worth $7,100 each and replace them with 256 units valued at $95,000 a piece.

Richard Troxell, president of House the Homeless, Inc., a grass-roots advocacy group to end homelessness, said the organization wants to prevent the loss of housing, including the Riverwoods apartments.

"They need to stop demolition because we think the property is habitable, and in fact, it was inhabited a year after they said it wasn't habitable," Troxell said.

Tenants, House the Homeless and Legal Aid are working together to reinstate the restriction.

Amy Leeman, housing department spokeswoman, said she could not comment on the pending case.