Travis County Commissioners Court
August 10, 2004
Housing Finance Corporation
Now let's call to order the Travis County housing finance corporation. 1. Consider and take appropriate action on request for assistance for Austin habitat for humanity.
>> good after noon, I知 harvey Davis, manager for the corporation. I知 -- I知 here with aaron shefford who is the board director of Austin habitat, michael willard who is executive director. If it's okay with you, judge, I think that they have about a five or 10 minute presentation that they would like to make.
>> okay.
>> it will be a one pager, judge. We are here today to ask you to invest -- invest some hopefully a multi-year gift in a 10.2-acre tract of land which we acquired in 2002. The purpose of the investment would be to establish and build the infrastructure there, which would allow us to actually have 42 lots prepared on that infrastructure. Habitat for humanity, Austin habitat for humanity, as you know, is in the business of supplying low cost housing to -- to people in the 25 to 50% median income range. To present the request to you today, I have our executive director here, his name is michael willard, he's going to elaborate on our request.
>> good afternoon.
>> thank you. I知 here today to request $800,000 hundred thousand dollars. In Travis County funding to help us develop the 10.2-acres of property which we refer to as devonshire project. It is a -- this piece of property, will, as eric has indicated, provide us the opportunity to build -- to build about 42 homes for -- for afford I don't believe -- for affordable housing market here in Travis County. So the investment that we are going to be using the county funds for will be leveraged to provide those homes. The -- the funds that we are requesting will be used to provide for the clearing of the land, the development of the water systems, the development of road systems, curves, sewer, sewer system and -- and all of the developmental infrastructure to then make these -- this land buildable for the purpose of providing affordable housing for -- for Travis County residents.
>> so once the land has been made buildable --
>> that's correct.
>> -- is the rest of the strategy in place in funding or are you still working on that?
>> the strategy is in place. Our strategy is to go out and find donors or use some of the funds that we currently get and receive -- that we receive from home owner payments that are currently paying on their mortgages now and use those dollars to build houses. That's what we would use to build out these 42 lots.
>> as you are aware. One of the hardest things that has to happen when you are building houses is to find the land. It's usually actually amazingly easier to find people to sponsor the homes. This year, for example, our goal was to do 22 homes. The hardest part of that was to in fact find 22 different lots. Infill lots are becoming rare. Bus a lot of them are being taken -- because a lot of them are being taken over with downtown creeping more and more toward the east side. This gives us an opportunity to have the number of lots, once we get it developed that we can go to. We will still be using infill lots but as the proposal illustrates, there will be 42 lots there that we can build on. We will not have to turn away families from the program because we don't have sufficient land. In fact that was one of our topics of the last board meeting, was what were going to do two, three years down the road to the land. This gives us the opportunity to know that we will have land to build on two or three years down the road. Allows us to have homes for people when we need them.
>> eric, judge -- okay. Eric, can you tell me basically how that program works, programs such as this to learn -- of course I supported other people that were basically involved in building single family homes through the sweat equity effort. In other words providing the labor or the material, of course, coming in through other sources. Could you basically -- so the public will understand exactly what you are doing here. In other words, how did this work, single family homes made affordable to families in low income, like -- brackets, yet they have to provide sweat equity. But there are other things, also, that need to be done. Could you basically elaborate on that?
>> sure, Austin habitat for humanity, we do what we call an intake. Our projections, we actually have a five-year plan that deals with intakes. Every -- every year or so, depending on how much land we think we have and how many homes we think we can build, we do an intake and we ask people to apply to become part of the program. In doing so, in return for their sweat equity in the program, which is 400 hours, that's not 400 hours on just your house, you have to build on everybody's house in order to get that number of hours. You then are given a no cost mortgage or zero interest mortgage to buy your home. And then you pay back. So you get to -- you get to build home ownership in -- in that way. You take it into the program given a lot of training on how homes run, training on how to maintain the home, upkeep the home. Then once you get up to your 400 hours, you -- we then hopefully have a home for you to build. That's where the land comes in. In recent years we've had people come through the program and they have to wait sometimes as much as a year before we have the land and a house sponsored together in order to have a home for them to be --
>> only. I note the address, there was -- devonshire, basically 12 willis lane, north hampton, interjects that northeast drive, which actually the other border. Deaf devonshire really between pierce hospital -- middle school, rather. Which is right in that area.
>> right.
>> devonshire being the bisecting at north hampton, which of course interjects northeast drive and also feeds into [indiscernible] lane. Again, an area that I think that -- that has begged for single family homes and this is just one way of bringing affordable single family dwellings to an area with those persons that are providing sweat equity, is that correct.
>> that is correct.
>> okay. So as far as the -- as far as the thing that -- you are asking for us today is -- is some funding mechanism whereby the infrastructural needs for this particular 10-acre tract that will occupy that -- with that 42 homes will be built on individually, would be -- would be just for the infrastructure itself, not for the building materials of the home and all of this other kind of stuff; is that correct?
>> absolutely right.
>> there's a difference there.
>> there is a difference. We have to have the land developed first and then the infrastructure needs to be in place, therefore the electric tee, sewer, water need to be in place, roads, that is what our request is to develop this land. That will make buildable lots. Then we will be able to have donors and other supporters help us build those houses.
>> okay.
>> I saw a small amount that -- that has been granted, was it 60,000? From the city? That's been requested. I thought it said granted.
>> those are shop grants. When we get -- we can ask the city for certain amounts per lot. Once we start getting the lots on. That's going to get the houses when we start building, actually building on them, we can request for shop grants for those.
>> let me clarify that. Shop funding is coming through habitat humanity international, which is based in americaus, georgia. They have award from h.u.d., For habitat throughout the country, for using these h.u.d. Dollars to provide infrastructure or purchase properties. The -- if we are not able to, you know -- if Travis County is not able to fully fund this, we would be going to alternative funding sources to piece together the dollars that we need to provide this infrastructure and the development of this property. And habitat for humanity international, these funds would be a source that we would go after.
>> I知 not wording my question correctly. I didn't see anything there related to either the city of Austin or i'll call it paul hilgers' shop for the one that's develop in big ways housing. A lot of what you just talked about, in terms of water, water and wastewater, electric, that's infrastructure owned and operated by the city of Austin and I didn't see any requests for waivers on that very expensive infrastructure that have been pretty common lately related to the home depot and other kinds of -- kinds of economic development kinds of things that are out there. So I -- I was a little perplexed why we would be asked to develop something completely and wholly within the city of Austin knowing that that's -- that that's their turf, no pun intended, I didn't see anything there that said that the city of Austin was participating on something within their boundaries, especially these days, I知 asking questions about whether such -- whether such participation by us or welcome -- is welcome or not. What has the city said that they are willing to do or funds coming out of cdbg or paul hilgers' shop or smart housing, water and wastewater waivers, development waivers, the kinds of things that can take the edge off of those costs?
>> well, we would be building these houses according to the smart housing policies and therefore we would be receiving the waivers for that. In terms of making houses accessible, the other requirements around smart housing. There would be participation at that level. Additionally, we would be -- we would be -- looking to the city to support us in ways that they could in helping develop this project.
>> what -- we have gotten some -- some, for example, they have helped us on other projects. There's -- we just got some honey for them for vargas -- some money for them for vargas, 11 lots over on vargas lane that we were building on. We would go to them for fee waivers, those aren't guaranteed. What we are trying to make sure is that we have sufficient funds when we get started with the project, we know we can carry all the way through and get this done. If money comes, we weren't expecting you to be able to write an $800,000 check today.
>> nor could we.
>> nor do we think that you would be able to. But we knew if we had a multi-year request, 150, $200,000 a year for two or three years, that we would only have to come back to you in case we didn't get any of these other funds, but that would allow us to be sure that we had sufficient money when we started the infrastructure building, we can continue unabated while we continue to build the infrastructure at those lots. And made sure that we had them.
>> what was the monetary contribution last year?
>> that's hard to calculate. I can't give you a definite figure because it comes in different ways. They do some for land. For example, we have chodo funds through the city, we will buy a lot for $20,000, the city will rebest of my knowledge yourself that to us -- they will reimburse that to us. That's not for infrastructure, that's just the raw land. We just got another $100,000 to help develop the vargas lot. We apply for funds there, they give them to us as they can. I don't have a total for you because it comes on each and every lot. It's different for each and every lot.
>> that's why we meet every Tuesday. [laughter] next Tuesday, just kind of summarize maybe what they did last year and what you would project over the next 12 months. We need mr. Davis to see what's available anyway, give us a week to mull over this.
>> okay.
>> and -- sorry.
>> harvey, tell me -- tell me what -- I mean, given that if we were to commit to 800,000, even though eric is saying if we can get a four year commitment of 200,000 or whatever, what is the general pot of money that we have for the housing finance corporation? I mean, what -- what did we give out last year? What percentage would this be, I mean this seems like a -- like a staggering asking $800,000. Now, maybe it's not if you are telling me that it was $800 million last year, I don't think that's going to be the case.
>> as you know, the main source of revenue from the housing corporation is issuers' fee when the housing corporation gets the bonds. So it -- it would depend on how many bonds the housing corporation issues and -- during a year.
>> what happened with that last -- give me an example of last year.
>> this year we have only done one bond issue which was last week. And -- but prior years we have done, you know, four or five. Have taken in quite a bit of money. Another major source of income has been residual income from our single family bond programs. And these -- these come in maybe once every three or four years, and a couple of years ago we had a substantial amount of money, over $300,000, for one of our old single family bond programs that had to be -- the period had expired. It was after 10 years. So -- so the income of the housing finance corporation fluctuates substantially, it's very hard to predict how much is going to come in in one year. A lot of it depends on the health of the local economy. Right for you the Austin rental market -- right now the Austin rental market is very -- I would say very bad. Probably -- probably you know what I -- from what I hear, it's one of the worst in Texas. So -- so developers have a hard time doing apartment projects in -- in the Austin area. And of course that affects the corporation being able to issue bonds.
>> i've been here 10 years, the most we have ever gotten was any baby can, which was 500,000, over three years. In fact is this the last installment harvey?
>> yes, this is the last installment.
>> so we filled 166 for each of three years was -- we felt it was mulchable. Meals on wheels was probably next in -- that was $300,000. They got that in a couple of lumps as they began their project and closed out their kitchen project. But the most I can recall is 500 and that was done for any baby can.
>> a lot of these --
>> three years.
>> a lot of these projects have been done out of the health facilities corporations. We -- you know, once we issued the bonds, as you know, we receive a -- we receive an annual fee, a smaller annual fee on the anniversary date each year of when the bonds were issued. The cumulative annual fee for next year will be about $150,000. This is a steady income flow for the corporation. But it's -- I mean the corporation does have some -- some administrative and program costs that are -- that are fixed and so it's -- it's a little hard to -- to say that this $150,000 income stream is -- is -- that a lot of it is available to make multi year commitments.
>> do these lots generally get taken off the tax rolls? I mean, who -- where is this --
>> we are creating a tax base.
>> right.
>> we are creating a tax base.
>> there's vacant land there, 42 homes will be there when we're through.
>> is the land, I mean, so it's personally owned by someone, someone is paying ad valorem taxes on it as it exists. Once habitat homes are built, they are -- then they become --
>> they will be taxed.
>> they are on the tax rolls.
>> that's correct.
>> currently we own the land. So we are tax exempt organization. So there's no tax coming out of that property right now. When we turn around and sell that property to the habitat home owner, we are creating a tax base for the debt home owner he is paying.
>> so you own the real estate, you are not using the $800,000 to go out and buy additional real estate.
>> just to develop.
>> okay.
>> and I understand -- we will bring that information back. We know the $500,000, if that's the munchable portion.
>> that's how you get 500, you ask for 800. It's an old indian trick.
>> we would love to have 800, but the best of the board -- if the best you could do would be $500,000 -- we would be happy with that.
>> because of the revenue coming in --
>> usually it's considerably less is the people who are sitting in the audience right now will tell you on the next agenda item.
>> I知 sure that's true.
>> they are going can we put in that number.
>> I think the biggest difference here is -- allowing us to be able to create a taxable base of 42 homes, that's an important point.
>> would you [indiscernible]
>> correct.
>> thank you.
>> thank you. See you next week.
>> thank you, eric. 2. Consider and take appropriate action on request from southwest key program, inc. For assistance with the construction of a new facility in the govalle/johnston terrace neighborhood, one block from johnston high school.
>> good afternoon.
>> good afternoon.
>> we wondered about the restricted, some deed restrictions last week.
>> yes, sir, I was on vacation, I don't apologize too much. Yesterday I got back in the office, I had the deed restrictions to review. And looked at those, also yesterday afternoon received a copy of the actual plat recorded at the county clerk's office. Describing the property, the deed restrictions are applicable to. And the deed restrictions that were on my desk yesterday when I got back into the office do not apply, it appears to me, by the property owned by southwest key. It applies to the johnston terrace neighborhood blocks and sections, one of which backs up to this property. Also just briefly today mr. Davis had some additional deed restrictions and I vice-president had a chance to look at the plats, but I would guess that those deed restrictions apply. They also apply to the johnston terrace subdivision. In Travis County. In the city of Austin. And it does look to me from the legal description of the southwest key property and the other information that I have that those deed restrictions probably do not apply either. Without actually going and pulling the plat records for each one of those different deed restrictions that i've seen, I can't tell you 100% for sure. But I -- I have a pretty strong feeling that none of the deed restrictions that have been presented to me apply to this particular property. That was my understanding of the issue that -- that y'all wanted me to look at. So you were given two sets of deed restrictions.
>> well, actually, probably, I didn't count them, probably seven or eight that I saw today that had different -- virtually identical sets of deed restrictions, just apply to different lots, different blocks within the johnston terrace subdivision. And that's why I believe, looking at the legal description of the property that southwest key got, the -- the -- I saw 2001, approximately three years ago, was a metes and bounds description not referenced within a lot and block want johnston terrace. While I can't say definitively 100% for sure, I feel pretty strongly that none of the deed restriction that's i've seen apply. I think the only way to really know for sure is to actually have a title search done on the property. Which is very similar to the -- their lawyer had faxed me a title commitment last week while I was out. It would be very similar to the title commitment that i've seen, a title search would be, and it would clear up and make absolutely clear that -- that there's no deed restrictions applicable. But -- but at this point, from what i've seen, I don't believe any of these deed restrictions apply.
>> questions? Comments?
>> well, then I would -- I would be ready then to make a motion. That we -- that we request -- that we award the $100,000 to southwest key program inc. To assist with the construction of their new facility.
>> i'll second that if you'll take a friendly. That the -- that we can look at maybe phasing this, that 50,000 happen in fiscal '05 which starts in like 90 days, so that -- that would be available after say October 15th of 2004. And the other 50,000 would be available October 15th of 2005.
>> I think that's --
>> spread out.
>> I think that we had discussed that before.
>> yeah, in terms of the phase-in to make sure that we are not overextending ourselves, the any baby can commitment will be over with by fiscal '06, not calendar '05.
>> is that friendly?
>> yes.
>> Commissioner Daugherty? > chris, would you mind coming to the microphone? Does the homeowners association still oppose this project going in you all's neighborhood?
>> the neighborhood association does still oppose this. And I did bring some pictures to satisfy a question of whether or not there was actually a -- a neighborhood association.
>> okay. [indiscernible]
>> okay.
>> that's all I needed.
>> okay. Any input from any --
>> I would like to ask a question, if you don't mind.
>> on the -- on the deed restrictions, if you said that you have not 100% sure that you can feel pretty comfortable in knowing that there is no impact on this particular development according to what you have been able to see, just from -- just from surface review and --
>> in each deed restriction there's property described in that. It references a volume or a book and page number of the plate record. I have not gone and looked at every -- at every book and page of the plat records to make absolutely sure that this property isn't within those. But given the legal description of the property, the -- that southwest key owns that I have been given a copy of, it is not reference -- it does not reference a subdivision, a lot and block which is normal if a property has been platted into a subdivision, the legal description would be a lot and block and not what's called a metes and bounds description. Their property description is a metes and bounds description so I am pretty certain that it does not apply. But I just have not gone and taken the time to actually look at each book and page number. I can't sit here and tell you 100% for sure that it doesn't apply, but it's my belief that none of those deed restrictions apply.
>> in fact if this passes, I don't know what the other members of the board are going to do, there's been a motion and second, not yet voted on, but if this successfully passed and there is an actual -- as far as the investigation is done -- if further investigation is done and there is a revelation of deed restriction violations as far as this not being -- as far as the deed restriction [indiscernible], then what disposition would that put the housing finance corporation [indiscernible] at that time?
>> I don't -- I don't believe it really affects the housing finance corporation. If building this particular project on this piece of property violates deed restrictions, then the other property or property owners who are subject to those restrictions could potentially have a private cause of action against southwest key either for damages to their property or for some type of injunction to stop what's going on there. So I知 fairly certain that they've had some type of legal review to ensure theirselves that they are not going to have their problems. But my understanding the request before the board is just to fund $100 to southwest key for this project -- $100,000 to southwest key, there would not be any negative ramifications to the corporation itself for making that.
>> as you know, we have been doing neighborhood impacts I guess even part of this morning and we go and continue, we go through this process and I think the neighborhoods have -- I think -- given their disposition on -- on opposing this particular project. I'll have to respect that. Now, I -- I have also stated that -- that I support the efforts of southwest key. I don't think no one doubts that. But I think the location as far as what the neighborhood is saying is -- there's something that I can't support. Of the funding, I can support. But not at this location. Earlier today, we discussed the situation where we talked about installing holding cells at the site over there off of airport boulevard. Would that be in the best interests of the county to get involved in having holding cells adjacent to the neighborhood. Of course I don't support anything like that. Because there it is, another negative impact on the neighborhoods. Along with a lot of other things that have been negative in this community as far as neighborhoods saying that they oppose certain things being -- having a negative connotation. That's -- that's their assessment. They have to live with whatever decision we make. Here. It's a tough call. It is. Because again as I stated last week, I worked with many of these persons on opposing things in -- in precinct 1, this is of course -- of course this particular location is in precinct 1. Not precinct 4, not precinct 3, not precinct 2. But precinct 1. But it's all -- it's all Travis County. So -- so, again, I知 going to have to -- have to look at this and I would like to make a substitute motion that -- that -- my substitute motion, judge, would be that -- would be that we could -- I still support the funding of this particular project of $100,000. However, at a different location other than the one that they have chosen. So that would be my motion.
>> is there a second?
>> I second it.
>> to the substitute motion? So the -- so the substitute motion is to approve the funding but not at this location.
>> that's right.
>> okay. This location is west of johnston high school? Between johnston high school and bohm road. What else is between johnston high school and bohm road?
>> residences.
>> [indiscernible]
>> big your pardon?
>> an industrial area or houses.
>> that's on the other side, [indiscernible] johnston -- outside of johnston terrace.
>> that is outside of johnston terrace.
>> does the johnston terrace boundary line ends where this property begins?
>> it end to the south of bohm road. And it end to the north of -- ends to the north of boggy creek.
>> okay. But you all own this property right now, southwest key?
>> yes.
>> the substitute motion is before us. Any more discussion of the substitute motion?
>> I am going to say why I will not be supporting this motion is that this has already gone through the neighborhood planning process with the city of Austin which is extraordinarily, intensive, extensive and involved this neighborhood planning area and it is already incorporated within this neighborhood planning area. So I知 going to respect the neighborhood planning that has already occurred and i'll just have to say respectfully to chris, you and I will have to respectfully disagree on this one in terms of what is the feeling of the neighborhood on this one. So ...
>> all in favor of the substitute motion? Show Commissioners Davis and Daugherty. Those who oppose? Show Sonleitner, Gomez and yours truly voting in opposition, back to the original motion which is to approve the grant of $100,000 for the southwest key project at the recommended location which the project owns now. All in favor of that motion? Show Commissioners Gomez, Daugherty, Sonleitner, yours truly voting in favor. Voting against --
>> an obtaining.
>> abstaining, by Commissioner Davis, thank you all very much. [ applause ]
>> do we need to work on the appropriate contract.
>> the contract, yeah.
>> I assume that the board wants a contract in which the funding would -- would be started after they begin construction of the project, which -- which will be similar to what we have done before. Where they turn [multiple voices]
>> right.
>> exactly.
>> I don't think construction would start until calendar year 2005.
>> okay.
>> all right.
>> judge, my an tension is based on the -- abstention is based on -- for the record, based on the earlier comments that I made, clerk, so -- so the opposition of the neighborhood association, johnston terrace opposing this particular location in their neighborhood, thank you.
>> move adjourn.
>> second.
>> all in favor? That passes by unanimous vote.
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Friday, October 28, 2005 9:05 AM