December 2022

winter storm

Nationwide Freeze can Lead to Claims

  • Having a good insurance policy is essential to ensure your investment is fully protected when disaster hits.
  • The first step to getting a good insurance policy is hiring a great insurance broker who knows your company’s needs.
  • Once disaster does strike, its important to work with your broker to get notice to the insurance company as soon as possible.

I hope you had a great holiday season and got to spend time with your friends and family. I was fortunate enough to make it up to Michigan to visit with my family. And I was even more fortunate to make it back and did not get stranded in an airport somewhere.

When I was up there, I encountered some pretty treacherous weather. And it reminded me that, after being in Texas for over 20 years, I’m not very good at driving in that stuff anymore. I was 10 and 2’ing it and getting honked at as I slowly made my way down the highway through the wind and snow and cold. But all worked out well.

Michigan, obviously, was not the only cold place around the holidays. It got ridiculously cold down here in Texas. And I am sure that brought back memories of the great freeze from two years ago. Hopefully we do not see that again this year, but you never know. And if we do, there will be no substitute for being prepared before the storm hits. And that’s why this week we are going to talk about insurance.

A Great Insurance Broker is Very Valuable


I do not have to tell you how important it is to have good insurance so that your real estate investment is protected. The first step to make sure you have sufficient insurance is to find a great broker. A great broker can be worth his or her weight in gold.

We have dealt with a lot of insurance brokers over the years and the best really take the time to figure out your business. They need to spend time with you, understand what you do, where your vulnerabilities are, and what insurance you need to be fully protected.

The last time I met with my broker, he was able to suggest additional coverages that I really need. And while obviously he makes more money by selling me more policies, that was not his main concern. He wanted to make sure we were fully protected. As a result, he was able to suggest coverage that I had never considered.

A good broker also needs to have a very strong working relationship with the insurance companies. He or she can then understand who is willing to write the policies that you need to protect your investment and do so for a reasonable price.

As I wrote above, we have worked with a lot of brokers over the years. So if you need a recommendation on a couple of good ones, please give me a call.

What to do When Disaster Strikes


If you have a great insurance broker, you should be fully protected even when disaster strikes. But you still need to know what to do when that unfortunately happens. I have written some about this previously but its always good to get a refresher.

The key when that storm or other negative event hits, is to take action right away. You want to make sure that you are documenting everything that may affect your claim. This means taking pictures, getting statements, saving invoices, tracking your time and lost profits, etc. This is extremely important and will help to support your claim to make sure you are put back whole.

You should also immediately call your broker. If you hired a great one, he or she will help you fill out your proof of loss. This is an extremely important form that the insurance company requires to start the claim process. You should try to get it filed with the insurance company as soon as possible. And please make sure that you include as much information and potential damage as possible.

We also recommend hiring an independent contractor to help value the repairs you will need. This will make sure you are getting a third party to independently verify the amount of the damages. And, of course, if you have any issues with the insurance company pushing back on you for the size of the claim or coverage, you should also hire an attorney to help navigate the claim process. We have been through this process many times and its always a good idea to have someone on your side to push back on the insurance company.

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Its a New Day on the Austin City Council

  • Last week were the runoff elections in Austin and they were good for the future of Austin housing.
  • Kirk Watson is the new mayor-elect and will be the mayor for a shortened two-year term.
  • The three city council candidates who won the runoff all appear to be pro-housing – which is great for Austin.

Last week was a big one for Austin’s future. But before I get to that, I want to wish everyone a Merry Christmas, Happy Hannukah, or whatever you celebrate this time of year. Hopefully you are able to spend time with your friends and family. That’s what is important and its great to remember that during the holiday season. For me, I have spent the past few weekends perfecting my bourbon milk punch recipe, so I am all ready for a Bukowski family Christmas.

Having said that, as I wrote above there was some exciting news last week. The runoff elections for mayor and three council seats took place last Tuesday. And they brought good news for pro-housing folks and the future of Austin. So let’s talk about it.

Our New Mayor … For Now


I reckon I do not have to tell you who the new Austin mayor is. Kirk Watson has been in the Austin political scene for a long time. As a former mayor and state senator, he is likely familiar to most of you. As the result of winning a very close runoff against Celia Israel, Watson will be the new mayor.

To be transparent, I supported Watson in the mayoral race. But both he and Israel were good candidates who likely would make good mayors. And it seems like they are both pro-housing.

Because of his experience at the capitol, Watson also hopefully brings with him the ability to soothe the relationship between the City and the State. If you have lived here in the past few years, you know that it is often very contentious – much to Austin’s detriment. Hopefully Watson can help smooth that over.

A big issue in the mayor’s race, though, is that this is a short term. Because of realignment, this year’s elected mayor is only serving a two-year term. That means, if Watson chooses, he will have to run again in 2024. As a result, we are likely to be right back at it a year from now.

Council Member Runoffs


The other runoff elections were for city council.

In District 3, Jose Valasquez won the seat. While I do not live in District 3, I did support Jose. He is a pro-housing candidate who understands the urgency of the issue. While he does not go into detail on his website, he does state that he favors a “holistic approach to our housing crisis” that should be built on the “real-life experiences of lifelong and new residents alike.”

In District 5, Ryan Alter won the runoff. He is also a pro-housing candidate who put forth a pretty detailed “Housing Now” program during the election. He definitely understands the crisis Austin faces and has said he wants to get to work immediately solving the issue.

Finally, in District 9, Zo Qadri won the election runoff. Like the other two new councilmembers, Zo appears to also be pro-housing. On his issues page on his website, he dedicates a section to talking about our outdated land use code and how it needs to be updated to bring it in line with Imagine Austin. This is, obviously, a very welcome view from a new City Councilmember.

Overall, the runoff elections were a big success for housing. Which means they were a big success for Austin. I look forward to seeing how these new councilmembers get to work helping to solve this crisis and make Austin a better, more livable city.

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All Real Estate is Local

  • All real estate developers and investors will eventually have to deal with local government officials.
  • When doing so, there is no substitute for knowing the local ordinances and statutes.
  • And having a good working relationship with the officials can be very beneficial to getting goals accomplished.

As a real estate investor or developer in Texas – or likely, anywhere in the United States – you are going to eventually have to deal with the local municipality. Whether that’s through requests for zoning variances, code enforcement issues, or whatever, dealing with the local city and/or county is an inevitability.

And it does not matter if you are dealing with a large city like Dallas or a smaller town like Lago Vista. Dealing with the local government is just a fact of life.

So this week, I am writing about some things to think about when the next time you are dealing with that local city or county. We have had a lot of opportunities to deal with local government officials on behalf of our clients. And, as a result, can share some of the knowledge we have gained. To be clear, though, we are NOT land use attorneys. That is a specialized area of real estate and, as of now, we do not practice in it.

No Substitute for Knowing the Law


I started my career at a big law firm in Houston. And one of the best things I ever learned there – and that was repeatedly pounded into our heads as a young associate – is there is no substitute for knowing the law. And that means reading the statute. As a lawyer, its something we have to do and the starting point for all discussions.

That same rule applies to dealing with local government officials. When you are working with a city or county official, that person is operating subject to local ordinances and statutes. And if they are citing your property or want you to do something at it, they are following other local rules.

Well you cannot have a meaningful discussion with the local official if you do not know the ordinance that person is citing. This includes not only knowing the statute or ordinance that the government official is citing but also other ones that may be relevant.

I am stating the obvious when I say that local governments are highly regulated by statutes. They are required to follow strict procedures and policies. But not everyone knows those rules. That’s why it is so vital to make sure you – or your attorney – fully understands the laws. There’s just no substitute for it.

Dealing with the Local Official


Once you fully understand the ordinances and/or statutes that govern the situation you are dealing with, the next step is to actually engage with the local official. Unfortunately, this can often be contentious. But we work very hard to try to forge a good working relationship with the local official. Usually we all want the same goal – we just may disagree the best way to get there.

Our first step, therefore, is to personally engage the official on the ground and figure out exactly what the issue is. And see if we can come to an agreement on the best way to resolve it. While this will often lead to resolution, unfortunately that is not always the case.

That is why its very important to know your options if you think the first point of contact official is being unreasonable. We try, therefore, to also forge good working relationships with the higher level government officials who are more responsible for the implementation of the policies in the ordinances and statutes. Sometimes they can be more reasonable and understand the overarching goal of the legislation.

And, of course, the last step can always be to head to the local elected official directly and see if its possible to get a resolution there. They are responsible to the constituents and also the government official who most understands the policy goals.

Dealing with a local government agency does not have to be a stressful process. If you understand the laws and have a good working relationship with the officials, it can hopefully be a relatively painless transaction.

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Grand New Development Coming to Austin

  • The Austin City Council approved a redevelopment plan for the old Austin-American Statesman site.
  • It will include six towers of residential, office, and retail.
  • As always, Austin has a severe housing shortage. So these new units are a welcome development.

I do not usually report news in this blog. I generally just comment on it. But there was a pretty big development in the Austin real estate market last week. So I thought it would make sense to talk about it this week.

On December 2, the Austin City Council finally approved plans for a grand new development that will help to transform downtown. Once the development is built, it will provide much needed new residences and add significantly to the Austin skyline.

I am, of course, talking about the old Austin American Statesman site just south of the river. It’s a large site for which Endeavor has been working to get approval for a redevelopment. And last week, it finally received that approval from the City Council.

Struggle to Get Approved


As you probably know, Endeavor has been working to get the Statesman site redevelopment approved for at least a year now. It allegedly went through lots of negotiations with the City Council. And also had to respond to objections by the local neighborhood groups.

But on December 2, the third and final reading of the redevelopment plan at the City Council passed the resolution by an 8-2 vote, with one member abstaining. The no votes were from Kathie Tovo and Allison Alter.

What will the Development Entail


The Cox family owns the 19 acre site and it is working with Endeavor to redevelop it. The proposal is for a new PUD that will consist of:

  • 1,478 residential units;
  • 5 million square feet of office space;
  • A 275 room hotel; and
  • 150,000 square feet of retail and restaurant space.

This will all be contained in six separate towers on the Statesman site.

Usually, to get a development like this approved, the developers will have to agree to provide some affordable housing units in its development plan. But here, instead of including those units directly in the plan, the developer has agreed to pay the City $23 million dollars. The City will then use those funds to build affordable housing elsewhere around town.

I have talked about this a lot in this blog – but Austin has a critical housing shortage. And it needs all the development it can get. So adding an additional 1,478 units is great news. And while Endeavor undoubtedly will not break ground for at least a year, I look forward to the day we can explore the new towers at the old Statesman site.

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