For all of you reading this shortly after it’s been posted, no context is necessary. But in case anybody ever goes back and reads this months or years from now, here’s the situation as I write this. Most folks in Austin are working from home on account of the global pandemic COVID-19. Dining areas in bars and restaurants are closed. Yesterday, 18 positive tests for the virus in Austin were added to the 23 existing ones. 2020’s edition of SXSW was cancelled and a large chunk of SXSW, Inc’s workers were laid off. So many other workers are being laid off in Austin and around the country and world that people are starting to ask whether the economic collapse will look more like the Great Recession or the Great Depression. Cap Metro has reported a nearly 50% drop in ridership and has dropped service to mostly Sunday-levels. I could go on and on but suffice it to say the situation isn’t looking good.
In the coming months, the short-term horrors will hopefully recede but it’s quite possible that longer-term horrors will wade in. If public health concerns linger or the economy remains depressed, workers that were furloughed may find themselves laid off. Sales taxes and hotel taxes could drop sharply and the city, county, and Cap Metro could find themselves in a budget crunch.
I’m not a public health expert or a macroeconomist. I’ll leave the social distancing and vaccines, unemployment adjustments and money drops to others to discuss. And for a public health and economic crisis of worldwide proportions, these items are obviously of the maximal importance. But you write what you know, so this blog post is going to be about steps that Austin could take to prepare to recover from the crisis, specific to land use and transportation. We all have to pitch in where we can.
1 Get Our Shovels Ready
The national economic response so far has been centered on sending out checks to individuals, staying debt payments, extending unemployment, and other items aimed at individuals and businesses. These are less “stimulus” packages (after all, a huge chunk of economic activity is simply banned and cannot be stimulated) and more catastrophe-avoidance packages. Once the dust settles a bit on the public health response and we see what state the economy is in, the federal government may well ask for “shovel-ready” infrastructure projects it can spend on to get the economy going again. Austin has no shortage of infrastructure plans. From the bicycle master plan to the sidewalk master plan to the pool master plan to the parks master plan to the plans for the redevelopment of Congress Avenue to the Waterloo Greenway’s vision of a chain of parks to… Honestly, I’m gonna stop there, but I don’t have to. We should be dusting off all these plans right now to make sure they’re current and we’re ready to put our best foot forward in applying for stimulus dollars.
2 Pass the Project Connect Plan
Project Connect has created a fantastic vision for setting the foundation of Austin’s transit future. With the uncertainty created by the coronavirus and the world economy, we can’t know whether the city will be in a position to fund it. Hopefully yes. But before we can answer that quesiton, we should continue to move ahead with support for the plan, whether or not we can fund it today. That way, if the federal government does decide to provide support for infrastructure or transit, we will be completely ready. Whether we can get funding for the whole shebang or just a piece of it, it will help get transit moving.
3 Recalibrate density bonuses
Density bonuses are programs that allow projects to be built bigger or taller in exchange for providing other community benefits: for example, better design or money for affordable housing. These programs must be calibrated: if you ask for too many community benefits, nobody will use the program and you don’t get anything. If you ask for too little, you don’t get the community benefits — although at least you get the density, which is still a plus in my mind. With the economic uncertainty that’s coming, our calibrations are going to be suddenly very out-of-whack. With sale and lease prices dropping, costs that would have been bearable before will now put projects out of reach.
Anecdotal reports from around the country show that construction is already slowing down dramatically. We could soon find Austin filled with out-of-work construction workers, many of them ineligible for federal relief due to immigration status. And this is not only bad for construction workers, it’s bad timing for the city budget: with sales taxes down, we will need new property tax base to make up for it. We should immediately recalibrate density bonus requirements down. Some requirements for community benefits should be simply eliminated temporarily as many projects won’t be able to get funding at all unless they get the benefit of the density bonus without the cost. The arguments against constraining construction have shifted from keeping costs in check to keeping people employed, but they are as strong as ever.
4 Allow the most cost-effective buildings
Another step we can take to support construction workers and our tax base is to rethink the types of buildings we allow. In boom times, pretty much any construction type in Austin will be fundable. High-end high-rise condos are very expensive to build, but nevertheless we have seen many of them go up because they’re fetching a pretty penny in rent and sales price. However, when those sale and lease prices come down, having all of our eggs in the “high cost” basket is really painful. Instead, we need to find areas where construction costs can be kept low while there’s still very high-demand for living there. The best way to go about this is allowing more people in high-demand central Austin to replace single-family homes with so-called missing middle housing, the construction type and location most likely to be fundable in a down economy. If you’re interested in the logic behind this suggestion, check out my sister site: Desire for Density.
Stay safe, y’all!