June 2023

More Positive Steps from the Austin City Council

Leave a Comment / Affordable Housing in Austin / By Sean Bukowski

There have been a number of positive housing steps taking by the new Austin City Council in the last few months.
The latest will potentially encourage multiple units to be built on single family lots.
The Council’s moves are encouraging and will help reduce some affordability issues.

Things are heating up in Austin. And I am not just talking about how you can fry an egg on the sidewalk. I’m also talking about how the there are some exciting things happening at City Hall.

Within the last couple of weeks, there have been some positive housing developments from the City Council. This is not the first time I have written positive things about the Council since the November elections. I am starting to think this is going to be a trend. And a quite welcomed one at that.

So what happened in the last couple of weeks? Lets talk about it.

City Council Proposes Increased Density on Single Family Lots

Its no big news that Austin has a housing crisis – with skyrocketing home prices and a shortage of affordable options. In response to this pressing issue, the Austin City Council has proposed a groundbreaking solution known as Opportunity Unlocked, which aims to allow additional homes density on many lots – including ones that are currently zoned for single family. This initiative has the potential to unlock new opportunities for both homeowners and prospective residents, fostering a more inclusive and sustainable city.

The Opportunity Unlocked proposal seeks to address Austin’s affordability crisis by allowing property owners to build additional housing units on their single-family lots, such as granny flats, duplexes, or backyard cottages. It will allow developers to build multiple units on a single-family lot. By making efficient use of existing land, this initiative could significantly increase the housing stock.

One of the key benefits of Opportunity Unlocked is its potential to increase housing affordability. By increasing the number of units available, Austin can create more options for individuals and families of varying income levels. Accessory dwelling units (ADUs) or secondary units can serve as affordable rentals or provide an opportunity for multigenerational living, allowing families to support each other while maintaining privacy and independence. Moreover, increased density can promote economic diversity, encouraging a more inclusive and vibrant community.

A side benefit of Opportunity Unlocked is that it may align with Austin’s commitment to sustainability. By encouraging the construction of smaller, more energy-efficient units, the proposal can help reduce the city’s carbon footprint. Furthermore, densifying neighborhoods can support walkability and public transportation, reducing reliance on private vehicles and easing traffic congestion. These measures contribute to a more environmentally friendly city, aligning with Austin’s progressive reputation.

The City Council has sent the proposal to the City staff to draft an ordinance that it can vote on. That vote is expected to happen on October 19. Assuming that happens and the City Council passes the ordinance, this law would go into effect shortly thereafter and developers can start adding even more needed density to our City.

Still More Needed But These are Good Steps

As I wrote above, it seems like I have written multiple articles about some positive moves that the City Council has made in the last 6 months. Its an encouraging trend. And this is not the only positive move. In the next couple of weeks, I am sure I will write about the shift in compatibility and parking requirements that the Council has undertaken.

Obviously we have not solved our housing crisis yet. There is still a long way to go but these are positive moves and will help ease some of the pressure of our housing affordability crisis.

More Positive Steps from the Austin City Council Read More »

Appraisal Districts Should Not Be Motivated By Personal Profit

Leave a Comment / Property Tax Protests / By Sean Bukowski

Taxes in Texas are supposed to be equal and uniform and fair.
Sometimes, however, taxing authorities can get overaggressive in trying to maximize revenue.
A recent ruling by the Texas Supreme Court will curb some of that aggressiveness.

How is tax season going? Everyone having fun? Here at Bukowski Law Firm, we are in the heart of protest hearings. Its always challenging and frustrating and sometimes satisfying. I hope you are having only success.

Anyway, there was a court decision a couple of months ago that impacted the property tax world that I thought I would share this week. I think its totally fascinating. But I totally realize that may just be the legal nerd coming out. So hopefully you will find it interesting also.

The Texas Supreme Court did not like the scheme that a local school district was using to increase its property tax base. So lets talk about it.

Texas Appraisal Districts are Supposed to be Neutral

It can be incredibly frustrating when you get your new assessed values every year. And every year – often contrary to logic – there is a big increase in the assessed value. But officially, appraisal districts are supposed to be fair to property owners.

The requirement of Texas appraisal districts to be neutral when determining the assessed value of properties in taxing is a crucial aspect of maintaining a fair and equitable tax system, as required under the Texas Constitution. While it may not always appear that they do, appraisal districts are supposed to set valuations fairly – and not just try to maximize revenue.

Neutrality in property appraisal means that the valuation process should be free from bias, favoritism, or any external influences that could skew the assessed value. This requirement ensures that all property owners are treated equally and that the tax burden is distributed fairly across the community. By maintaining neutrality, appraisal districts can foster trust and confidence in the tax system, as property owners can be assured that their assessments are based on objective criteria and not influenced by personal or political considerations.

Furthermore, neutrality in property appraisal is essential for upholding the principles of transparency and accountability. It allows property owners to understand how their assessments are determined and provides them with a clear basis for challenging an assessment if they believe it to be inaccurate or unfair. Neutrality also helps prevent potential conflicts of interest that may arise if appraisal districts were influenced by individuals or entities seeking to manipulate property values for their own benefit.

Appraisal District does not have Authority to Hire on Contingency Basis

This brings us to the issue of the lawsuit in question. The Iraan-Sheffield Independent School District (“ISD”) was not happy with the appraisal of a commercial building in its district. See Pecos County Appraisal District, et al. v. Iraan-Sheffield Independent School District, No. 22-0313 (Tex. 2023). To seek a higher appraised value, the ISD hired a lawyer to protest the value and wanted to pay the lawyer on a contingency basis.

Because governmental authorities can only act if they have authority to do so, the Supreme Court first looked into whether the legislature gave the ISD this authority. After its analysis, the Court concluded that the ISD did not have this express authority.

The Court then looked into whether the ISD had the implied authority to do so. And that’s when the analysis got very interesting. The Court recognized that the taxing authority’s mission is not to maximize tax revenue. Instead, under the Texas Constitution, taxes are supposed to be equal and uniform. Taxes shall be assessed fairly and in proportion to the value of the property. But by hiring a lawyer on a contingent fee basis, the ISD has given the lawyer the incentive to maximize recovery. Because that is how the lawyer will get paid the most money. And this is a perverse incentive not in line with the legislative goals.

This case is interesting because it shows how far and off base some taxing authorities can get when trying to maximize revenue. But thankfully, property lawyers and the Supreme Court will sometimes tell them, “No.”

Appraisal Districts Should Not Be Motivated By Personal Profit Read More »

Let Them Fly

Leave a Comment / Central Texas Political Issues / By Sean Bukowski

As we have discussed previously, the City of Austin’s plans to expand the airport have been stalled by its fight with the airport operator.
Earlier this year, Lonestar Airport Holdings won a $90+ million judgment from the City to condemn its property.
The City and LoneStar have now agreed on an $88 million settlement of that lawsuit.

I enjoy writing articles that update previous articles. Especially when they bring potentially good news. Is this week’s update good news? I guess that depends on from who’s perspective we are looking at this. Its certainly good news for Lonestar Airport Holdings. Maybe less so for Austin taxpayers.

I have written previously about Austin’s plans to expand its airport and the struggles it has run into. It has faced significant hurdles to the proposed expansion – especially with the South Terminal. Well this week it looks like the City Council has finally cleared one of those majore hurdles. So lets talk about it.

Expansion of the Airport Faced Obstacles

As you know, Austin has experienced exponential growth in recent years. To accommodate the this growth, the City has a planned airport expansion to be completed by 2040.

Austin-Bergstrom International Airport (“AIBA”) has long been an essential gateway for travelers to and from Austin. With the city’s population booming and tourism flourishing, the airport’s infrastructure has struggled to keep pace with the rising demand. Currently there are only 34 gates to accommodate an MSA with approximately 2.3 million people. The much needed planned expansion aimed to address the growth by enhancing existing facilities, expanding terminal capacity, and improving passenger amenities.

The 2040 Master Plan is projected to accommodate an expected 31 million passengers annually through ABIA by 2040. To meet this demand, Austin plans to expand to 64 gates by that time – almost doubling the current ABIA capacity.

In addition to the gate expansion, they also plan to make major renovations to the current main terminal. This will include upgrading the terminal and making it more accessible for the increase in passengers.

Finally, they also plan to add ten new gates to a new midfield concourse – with it ultimately growing to 32 total gates.

We can argue over whether these measures are sufficient for the growth we will see in the future. I suspect that will just help us tread water. But at least there is a plan to expand. That plan, however, has been stalled because of issues with the South Terminal.

Problems with Lonestar Airport Holdings

When the South terminal was first built, Austin and Lonestar Airport Holdings agreed to a forty-year lease for Lonestar to operate the South Terminal. Austin wants out of the lease so that it can expand the airport. But, of course, Lonestar does not want to let Austin out of the lease without getting paid what it is owed. As a result, the City decided to use its power of eminent domain to acquire the South Terminal, which was privately run. And that’s where our story picks up.

When using its power of eminent domain, the usual process is the condemning authority (in this case, the City of Austin) will make an offer for the property. And if the property owner does not agree, fight the condemning authority on what the market value of the property is. The first step is usually a hearing before the panel.

In this case, Austin offered Lonestar $1.95 million for the property. Lonestar objected to this. As a result, they went to a hearing before a panel last week. After hearing from both sides, the panel ruled that the City of Austin would have to pay $90 million to Lonestar for the property. That is 45 times what Austin originally offered.

Austin and Lonestar Agree to Settlement

Well this week, it appears the sides have finally reached a settlement on the lawsuit and a payout of the contract. The Austin City Council approved an $88 million settlement amount with Lonestar.

With this settlement, Lonestar will be bought out of its 40 year lease of the South Terminal. And control over it will revert back to the City. It will continue to operate it until the terminal is rebuilt in 2025.

And like that, the expansion plans are back on. And not a minute too soon – because we are certainly going to need the additional space.

Let Them Fly Read More »