Summary

This bill tweaks the "Homestead Preservation District and Reinvestment Zones" statute created in the 79th regular section address perceived shortcomings of the language. Based on the population and housing requirements in the original bill, this statute applies only to Austin.

Background

A "Homestead Preservation District" is designed to help localities increase homeownership and prevent the loss of existing homesteads by low-moderate income homeowners living in disadvantaged neighborhoods adjacent to central business districts. /1/

The original legislation (HB545(79R) ) created three tools Austin could choose to use to reach this goal:
* Land trusts - Homeowners may sell the land underneath their home into a land trust to ensure perpetual affordability
* Tax increment financing of affordable housing - increases in value of land is used to maintain affordable living space in the district.
* Land Banks - Affordable housing developers get first dibs on foreclosed property in the district.
This language does not take effect until it is adopted by City Council.

Although HB545(79R) provided these tools, none of them have been adopted by the City of Austin./2/ This bill addresses some of the shortcomings noted by councilmember and other stakeholders. Specifically it:
* Allows the city council to determine how much of the tax increment financing fund is used for affordable housing. Previously, 100% must be used towards that purpose.
* Allows the city council to dissolve the district. Previously, the council could not un-designate a district.
* Allows the city council to more flexibility in designate the holder of a land trust, removing the requirement that such an entity be a non-profit created to acquire and hold land for the benefit of developing and preserving long-term affordable housing in the district.

Since the filing of HB 470, the Austin City Council passed an ordinance enacting a Homestead Preservation District contingent on the enactment of HB 470./3/

Additional Links

/1/ Attorney General Opinion on Homestead Preservation District statute.
/2/ Coppola, Sarah "East Austin homestead-preservation district still isn't a reality: City is stalling to avoid loss of tax base, housing advocates say" Austin American Statesman, November 27, 2006
/3/ Dunbar, Wells "Department of Homestead Security" Chronic Blog. 1/11/07