The Guadalupe Neighborhood Development Corporation & Affordable Housing in Austin, TX
Affordable housing has become a major concern in Austin, Texas due to the prolonged period of rapid growth that the city has been experiencing. Low income individuals are being forced out of their homes near downtown Austin, near their jobs, their businesses, and their communities, due to skyrocketing property taxes. One solution that has been proposed is the use of community land trusts.
A community land trust is generally created by a nonprofit in a low income community that has a high risk of being broken up by rising property taxes and gentrification. The trust will buy properties and either rent or sell the home on top of the land, while maintaining ownership of the land itself. This allows the nonprofit to control who lives in the homes, to ensure that they are the individuals who would otherwise be pushed out of the area, and that the land is not developed into something unaffordable for the community.
The very first Community Land Trust in Texas, and the largest land trust in Austin, was the Guadalupe Neighborhood Development Corporation (GNDC). Therefore, it seemed appropriate to base my analysis of community land trusts in Austin on this particular nonprofit. I attempted to evaluate how successful GNDC has been at providing long-term, well-located affordable housing to individuals that would otherwise be forced out of their communities by looking at the proximity of the homes to the downtown area, the speed at which the properties have been appreciating, the requirements of the tenants of GNDC, and the amount of subsidization that is required to facilitate such a program.
GNDC currently rents out 57 single family dwelling units and 22 multi-family dwelling units. Community land trusts also have the capacity to sell the actual home, while maintaining ownership of the land itself, to a family or individual. They maintain the control of the land and insulate the individual from rapidly rising property taxes, yet allow the owner to build equity through homeownership. This is something that many low income individuals never have the opportunity to do, and GNDC has sold two homes in this manner. This is a unique opportunity for them, but not one that is allowed to the majority of GNDC’s tenants.
Of the forty-one homes that gathered data on from the Travis County Appraisal District in the Guadalupe Neighborhood Development Corporation (TCAD), all of them were within a 10 minute drive of the intersection of 7th Street and Interstate Highway 35. Twenty-seven of the properties (65% of the properties) were within a 5 minute drive to this location (Google Maps). This indicates that all of the properties GNDC is providing to low-income individuals is conveniently located to the urban core, and exceeded my expectations of proximity to downtown employment. As affluent individuals move back towards the urban core, many low income individuals are forced to drive long distances to their jobs in the central business district because they are unable to afford anything closer. GNDC changes this.
Since 2011, the forty-one GNDC properties’ appraisal values appreciated, on average, by 65.66% (TCAD). This increase is astronomical, and a 65% increase in property taxes could really challenge price sensitive individuals such as elderly individuals who have fixed income or low-income individuals who cannot easily absorb unexpected costs. Fortunately, GNDC’s land trust helps protect its homeowners from unexpected costs, and from this statistic, it is clear that their tactics are necessary and effective for the properties that they have chosen.
GNDC provides a valuable service, but there are requirements for an individual to qualify to be a part of the community land trust program by purchasing their homes. To qualify, a family must be at or below the 80% MFI level as defined by HUD, and they must have a credit score of at least 640 (GNDC). These requirements are to ensure that the families are both in need of this publicly and privately subsidized service, and will be responsible with their money so that they can keep up with the costs associated with homeownership. These are sensible requirements, but I questions whether the credit score requirements keep out families that could really benefit from this program. There is also a 3–5 year waitlist to live in a GNDC home, so there are many individuals who are not able to benefit from this service.
GNDC provides a way for low-income individuals to stay in their communities without the risk of being evicted by rising property taxes, but at what cost? Without waivers, GNDC was responsible for $151,922.94 in property taxes for 2015. However, with the waivers that they have been granted, they only ended up paying $14,908.36, less than 10% of the original tax level. These funds are being taken away from schools and other public services, so while the GNDC community land trust system is effective in the goals that I was initially measuring, it is not without cost.
In conclusion, the Guadalupe Neighborhood Development Corporation indicates that a well established community land trust can, in fact, provide conveniently located, affordable housing to low income individuals in neighborhoods at very high risk of gentrification. They even preference individuals with generational ties to the community, and make sure that the right people are benefiting from the program. However, some individuals who might really benefit from the services of this nonprofit are excluded because their credit score is too low, or because they just barely miss the income cutoffs. My assessment is that the Guadalupe Neighborhood Development Corporation is serving a population that would otherwise be forced out of their communities, and that their waitlist confirms the necessity of programs such as GNDC. It may not help every type of individual in need of affordable housing in this price range, as there is a severe disparity between demand and supply of housing in this price range in Austin, but that does not mean that they are not adequately achieving the narrower goals that they have set for themselves. The one worry that I have is the amount of tax money that the city and local schools are not receiving. Schools in East Austin have a lot of issues that additional funding could work at resolving; however, I did not measure the exact funding impact that GNDC has had on any publicly funded entity, and cannot site this as a legitimate downfall. Community land trusts can, and are, bringing affordability back to Austin.