October 2022

• Last Thursday was an important Austin City Council meeting for commercial real estate owners.
• The City Council passed two ordinances that will restrict the operations of residential landlords.
• It also relaxed some height restrictions in the North Burnett area to allow for greater development.

Its not often I write recapping what happened at an Austin City Council meeting. I usually write about it before the meeting and let you know if there is something important that will be discussed. But then the Austin Monitor or Jack Craver are much, much better at recapping things once they have happened.

But the Austin City Council meeting on October 27 was pretty important for commercial real estate owners. So I am making an exception this time to highlight some of the actions the Council took that will impapct commercial property owners. Of course, you should still read the Monitor and/or Jack’s email. But I reckon my take will be a little different than their’s.

First the Bad – Could have been Worse, I Guess

The first issue I want to talk about is something I wrote about in this blog two weeks ago. And posted about on Linkedin last week. The City Council took up two proposed ordinances that directly affect Austin residential landlords.

The first is the proposed ordinance to make it a crime to retaliate against residents who engage in “organizing” activities with other residents. This is, of course, already outlawed by the Texas Property Code. But Austin decided the state law did not go far enough. And, as I wrote about two weeks ago – there are potentially a lot of pitfalls in this ordinance. Its likely to be very bad for landlords and almost impossible to comply with. But, in its wisdom, the City Council approved this proposal with a 9-1-1 vote.

The second proposed ordinance that the City Council approved was to make the required Notice of Proposed Eviction a permanent facet of Austin landlord/tenant law. Again, this is in direct contradiction of state law. The one good thing to come from this vote – the City Council trimmed the time from 21 days to 7. So now, before landlords can issue a notice to vacate, they must first issue a 7 day notice of proposed eviction.

Obviously neither of these are good for property owners. I do hope, therefore, that the state legislature will outlaw these types of changes to the state property code during the legislative session starting in January.

Now the Good – More Density Coming Up North

It was not all bad news for the commercial real estate industry, though. I have dedicated a lot of words in this blog to the need for increased density in Austin. But there are a lot of different rules and ordinances that limit that density. And probably none of them is more culpable than compatibility requirements – which severely limit how high developers can build. And give us major transportation corridors like Lamar and South First that are lined with only one and two story buildings.

Well there was at least some good news that came out of the City Council meeting on this front. The council approved a change to the North Burnett/Gateway Zone that will allow developers to increase the height of the buildings they can develop. The limit in the area was 308 feet – meaning buildings could not go above that height. With what the Council approved on Thursday, developers will now be able to build up to 420 feet.

This is, obviously, great news for the North Burnett area. And for Austin as a whole. But we need much, much more relaxing of similar height restrictions all around the city. Which is why its so important to make sure we get City Council members who understand the need for development and density. So if you have not already done it, please get out and vote. Because the future of our great City depends on it.

• The Austin City Council is going to vote on major changes to the tenant organization and retaliation laws.
• If passed, many unintended consequences will make it extremely difficult for landlords to navigate this without potential criminal liability.
• Please call your city council member and ask them to vote no.

I don’t always love doing shock and awe headlines. It seems kind of cheap. But sometimes I need to get your attention. And this is one of those times. Its important.

The Austin City Council is proposing another ordinance that is going to drastically affect property owners in the city. I wrote a few weeks ago about how the City has proposed a 21 day Notice of Proposed Eviction on top of the state mandated eviction process.  This is still on the agenda for the Council to discuss. It has been moved to the October 27 meeting.

But that is not the only big ordinance that will be discussed at that meeting. The City Council is now also planning to discuss adopting another ordinance that will greatly change things for landlords. And that’s what we are talking about this week.

What is the New Proposed Ordinance?

The Austin City Council has proposed an ordinance that would instill penalties against any landlord that retaliates against a tenant who organizes with other tenants to secure more advantageous living conditions. At first glance, that seems reasonable, right? Nobody wants retaliation against tenants. But believe me – the devil is in the details.

First, this is already covered by the Texas Property Code. Under the Code, a landlord is not permitted to retaliate against a tenant who establishes, attempts to establish, or participates in a tenant organization. Tex. Prop. Code 92.331. If the landlord does retaliate against the tenant, the tenant may recover damages in the amount of one month’s rent plus $500, actual damages, court costs, and reasonable attorney’s fees. Tex. Prop. Code 92.333.

So why does the City Council feel the need to enact another ordinance in addition to the State law? It’s a good question. For one, tenants rights groups are very vocal. They make a lot of noise and the City Council hears them. In contrast, landlords do not speak up very often. That’s one of the reasons I am writing this article. We need you to voice your opinion – to call your City Council member. Its really important.

Because this ordinance, as you will see below, goes far beyond what the Property Code does.

What are the Unintended Consequences of this Ordinance?

If this ordinance passes, a property owner can be found criminally liable if he or she retaliates against a tenant. Specifically, the City Council wants to make it a misdemeanor to do so.

And a huge part of the problem with that is – the way the ordinance is written provides a ton of unintended consequences. To the point where it will almost be impossible for a property owner NOT to violate it.

For example, under the proposed language of the bill, any tenant that talks to the landlord about rent, changes in services, maintenance requests, or unsafe or unsanitary conditions at the property is considered to have participated in a tenant organization. REGARDLESS of whether that tenant actually talked to any other tenant about the issue. That means every tenant will be considered to have participated in a tenant organization.

And then once they are considered a part of a tenant organization, so many landlord actions can be considered retaliation. This potentially trying to evict a holdover tenant that the landlord has chosen not to renew.

This is Important

I think this is the third or fourth time I this blog article I have written that this is important. But it is.  This – together with the 21 day Notice of Proposed Eviction – are major changes to the landlord/tenant relationship that go far beyond what the people of this state want done. And we cannot stand by and let this take shape without voicing our objections. So I am pleading with you – please call your City Council member asap. Tell them to vote no on both of these ordinances. Also, please come to the meeting on October 27 and voice your opposition in person. It’s the only chance we have to stop these.

• Lyft has introduced autonomous ride share to Austin.
• It will start with two chaperones in the cars but they will be removed in the near future.
• Overall, this technological advance should be good for Texas.

I read an article in the ABJ this morning that inspired this blog post. And while it is not exactly about commercial real estate, it was too interesting to just ignore.

According to the article, Lyft has introduced autonomous ride sharing cars to Austin. The future is here – and on earth. Obviously this is big news and has a lot of ramifications for the future of how our society will behave. But what does it mean now for Austin? And what could those changes be? That’s what we are talking about this week.

Autonomous Ride Share Options

As I wrote above, according to the ABJ, Lyft has introduced autonomous driving ride share cars to Central Texas. Currently, the cars will apparently have two chaperones that will ride in the cars. Eventually, however, those chaperones will stop riding and you and the car will be on your own. This is, apparently, already happening in San Francisco.

After I read this article this morning, I went to my Lyft app to see if I could order an autonomous ride. I could not. It is not clear to me, therefore, how you order one. I hope to figure that out by the time you are reading this article. I look forward to taking my first ride.

A little over a year ago, Lyft announced a partnership with Ford and Argo AI to build autonomous cars for ride sharing. The goal of the partnership is to commercialize ride sharing on a large scale. And this is clearly the next big step in that process. Besides Austin, this is happening in San Francisco and Miami also.

Future of Texas Travel

There is little doubt that autonomous car travel is going to grow. And it is definitely the future of ride sharing. But what are the ramifications of that?

First, I do not want to ignore a potential short term negative consequence. Uber and Lyft employee a lot of people in the US. And they provide flexible work schedules. Obviously this will eventually eliminate a lot of those jobs. Though that will clearly take a while to happen.

This is, unfortunately, a real and legitimate concern with all technological innovation. It often eliminates jobs in the short term. And people can get left behind. We need to be aware of that and ready to support where needed. Because overall, technological advances are great for society and create far more jobs than they eliminate. But short term, it can be an issue.

Second, on the other hand, autonomous car travel should be safer than travel with human drivers. Basically the autonomous cars can eliminate human error. As a result, most – if not all – of the car accidents that are caused by human error will be eliminated. The flip side of that is, apparently, sometimes humans can adjust and avoid accidents or make them not as harmful. The AI may not be able to do that as well as human drivers.

Finally, autonomous cars should improve traffic. Similar to the cars being safer, autonomous cars can eliminate human irrational decisions. And, of course, eliminate some accidents. As a result, traffic should flow better when there are a lot of autonomous cars on the road. It should eliminate a lot of traffic jams. And in a city like Austin – where traffic is one of the biggest issues we face – that could be a huge benefit.

Obviously there are a lot of issues that come with autonomous cars. For example, as a lawyer, I’m really curious about liability when there is an accident. But this is not a technology blog. It’s a commercial real estate blog. So I am not going to get into all of the details. But the future is autonomous cars. And the future is here.