Chamber of Commerce Remarks
Chamber Board Room at our at 535 E 5th Street
Thursday, May 26, 2016, 3:30pm
Mayor Adler may deviate from his prepared remarks.
Earlier today at the DAA meeting, Senator Kirk Watson revealed a new way for Austin and our region to partner with TxDOT to pay for fixing I-35 (building new managed lanes and lowering the elevated lanes) without holding a bond election. I will recommend the City Council support Senator Watson’s proposal to help complete and finance this critical project, which decreases traffic congestion, increases transit options, and finally reunites our city – all without a bond election.
The financing model is creative and the regional and state-wide political consensus is unusual. But, we can no longer settle for the safe choice. We have to be smart. Senator Watson’s new option for I-35 is the kind of smart I’m talking about, and it reminds me of another time Austin had to decide whether it would make the smart choice or the politically expedient one.
Back in 1938, Austin knew it needed to dam the Colorado to bring electricity to the surrounding area and to control flooding – but the Mayor and City Council insisted that Austin own the dam. The LCRA insisted that it own the damn and the surrounding properties.
That’s over-simplifying the problem. In reality, it was, if you’ll excuse the pun, pretty damn complicated. It was kind of like today with I-35. Everyone knew what the problem was, but there was no consensus on the solution.
To resolve the conflict, the Council instructed then-Mayor Tom Miller to appeal directly to the Public Works Administration and a Congressman named Lyndon Baines Johnson.
In the end, thanks to LBJ, what seemed impossible became not just possible but universally supported. Not only did Austin get the flood control, a new lake, and electricity for Central Texas, but the LCRA got the ratepayers it wanted. And later, this Chamber of Commerce voted to name one of those dams after Tom Miller.
LBJ did not get this deal done by playing it safe or lowering his sights. Like Senator Watson with this new option to fix I-35 and lower the lanes, LBJ crafted a solution that matched the scale of the problem.
Now it’s our turn. Sen. Watson has given us a way to partner with TxDOT, as we have done in the past, to support I-35 without bond funding. It’s now up to us to check our resolve and tackle the rest of the list.
This is an inflection point for Austin.
We finally get to decide once and for all whether we are going to do what we usually do or do what we know we must.
Our traffic congestion has never been worse, our streets have never been more dangerous, and our city has never been more expensive.
We do not have enough money to simply add lanes to every road, and in most cases we don’t have the space. And we can’t throw simply money at our affordability crisis.
If we’re going to be a better city, Austin needs to be a smarter city.
We have to think big, and be smart.
We need to focus on our major streets. The planners call them “corridors,” but we know of them as the parking lots formerly known as North and South Lamar, Airport Boulevard, Guadalupe, Riverside, Burnet, MLK East/FM 969.
We don’t have room to add lanes on those roads, but even if we could, in a few years the congestion would be back. Same congestion, just more cars. And then what? How many times would you do that?
But if we made these corridors “smarter,” we could move more people, faster and safer, within the same amount of space.
Here’s how we turn these old state highways into smart corridors:
We add turn lanes. Smarter intersections allow cars wanting to turn right or left to separate from regular traffic, which gets them out of your way, and you keep going.
The problem with these old state highways isn’t so much the lanes as the intersections. How they measure how well these roads with is how long you have to wait at the intersections. And doing this work with make a real difference in how long you wait at these intersections.
We install smart traffic lights that can be managed from headquarters. Eventually they could use technology to automatically adjust to weather, congestion, and accidents. Now, a guy comes out once every six years and times the lights by hand. Takes forever and costs too much. It’s not smart. And with smart lights, you keep going.
Also, with smarter streets the bus stops would be in pullouts that cut into the curb and sidewalk, so when the bus stops it gets out of your way, and you keep going.
The buses have smart Q Jump signals at intersections so they’re not stuck in traffic but get to beat it… only if the buses move faster than cars will folks get out of their cars an into a bus… and when that starts happening as a matter of choice… you keep going.
Smart streets enable us to have smarter buses operating more efficiently and carrying more people who used to be in cars in front of you. They get on the bus, get out of you way, and you keep going.
e build smarter bike paths to make biking safer and more attractive to people who are now scared of riding in traffic in front of cars. Best thing about a protected bike path? Besides the safety, a protected bike path gets bicycles out of your way, and you keep going.
Let me give you two examples of the difference we can make on congestion on these corridors if we go big and fund these plans:
North Lamar and Parmer. In the morning rush hour, you’ll wait will be cut by 25.7%.
Here’s another example:
Airport Boulevard and 51st Street. Doing the work in corridor plans will knock 37.5% off your wait. That’s the good news.
The bad news? If we don’t do the work, that wait eventually goes up 71%.
All the way up and down North Lamar, you’ll see traffic move 50% faster through the intersections.
The corridor plans for these roads have already been done. We’ve spent millions of dollars on them and they’re sitting on a shelf. We need to take the plans off the shelf and do the work. To help with congestion alone, we need to do this work.
But the benefit of doing these projects is that they are, also, perhaps the most meaningful thing we could do to address affordability in this city.
This isn’t just about relieving traffic congestion. This is about affordability.
Making smart investments with our bond money will allow us to capture the value of growth along these smart streets to pay for growth how and where we want it – density right on these smart streets.
Let me be very clear about this: I’m not talking about fixing up neighborhoods, especially along MLK and Riverside, so the people there get displaced. We’re going to do things the smart way this time, by tackling our supply and demand problem with housing in a way that works for us.
How does growth along smart corridors prevent gentrification? First, we put growth along the corridors, and not in the neighborhoods. That preserves the character of these neighborhoods and keeps people in their homes.
But I’m well aware that unless the world wakes up tomorrow and decides that Austin is no longer cool that we need to build a lot of new housing units. When I took office I was told we needed to build 10,000 housing units a year to keep up with demand. Now, RECA says that number is 15,000 a year.
Supply has to meet demand if we’re going to prevent Austin from becoming a playground for the wealthy. It should not be a radical notion to think that Austinites should be able to afford to live in Austin. And these smart corridors are how we’re going to make a big knock at it.
First, we’re going to use the growth to fund affordable housing along these corridors.
Second, we’re going to put a lot of density there. We’re talking not just lots of housing but at all different price points: housing for the missing middle, low-income housing, and market rate housing. Economically diverse, mixed income neighborhoods work better for people of all incomes.
By putting housing along smart transit corridors, we’re also giving people more affordable ways to get to work than driving. Giving our transit system a bigger pool of riders means a more efficient bus system, buses with more passengers, and fewer people driving in cars.
This is how a mobility bond becomes an affordability bond:
More housing supply to meet demand and hold down rents.
More housing that’s affordable.
More density along smart corridors to protect neighborhoods.
Cheaper options for commuting.
The people who live in these neighborhoods can afford to enjoy the better streets and newer apartments instead of having to move to out of the city. That means less sprawl – which means shorter commutes for them and less traffic for you.
And what do you get? Besides less traffic congestion? You get a city that finally gets ahead of growth.
This is a project that actually is a transformational investment in affordability.
But we also need geographic reach. Something all over the city, even while we focus on the corridors. We’ve got some streets I’m ashamed to show visitors from Oklahoma, much less the people we get from around the world.
We’ve got big projects ready to go to fix intersections on state highways such as Brodie, Parmer, and 360 to relieve traffic congestion. And we are doing long-term planning on 360 and 620 so we can tee up the projects we all know need to get done.
We also need to do some planning so we’re ready to do the next round of corridor work. Smart corridors relieve traffic congestion and make Austin more affordable — we need all our major arteries to be smart corridors.
This year, we’re working on the five most dangerous intersections in the city, but we’ve got the next intersections on the list – places where it’s way too easy to get killed or seriously injured — and we need to fix the next group of those.
We need to build sidewalks so your kids, your grandchildren can walk to school safely and polling shows nothing is more popular.
But basically this is our choice:
We can turn clogged arteries into smart corridors where more people can afford to live and move. We can address, in major, meaningful ways, the intertwined challenges of mobility and affordability. We can get ahead of growth and make Austin a more mobile, more affordable version of itself.
So how do we pay for this? Let me take you through the numbers. And I know the typical joke is that there will be a test on this, but the truth is that there will be a test on this.
Turns out we have half a billion in bond capacity without raising the current tax rate. Now that we don’t need to use it for I-35, we can spend that capacity on other things.
There are a lot of hands out for that money now. But if we do a November bond election, I want to devote it to mobility and the affordability that that would bring. Our two big problems are mobility and affordability. You can’t separate them. And I think by going big on mobility in this bond, we will make meaningful progress on affordability. In fact, there is nothing we can do in a bigger way for affordability than to go big on mobility.
That’s why all I support taking all those other things that we could spend money on with a bond – affordable housing, parks, libraries, police and fire, all that – and putting them all on a bond advisory committee for next year and give that committee $200 million of our $500 million “no-tax increase” bond capacity. If these other projects are going to wait, we need to give them an attractive place to wait.
So that leaves $300 million for mobility that we could do this year without raising taxes.
I’m going to throw out some numbers here. I’m using them to show the scale of the job I think we need to do. These are ranges of figures that will undoubtedly change as the City staff prepares to present the options to the Council next week. But this’ll help you picture how big the dragon that we need to slay is. To complete the corridors all the way, costs about $800 million. If we’re smart and use TIFs and PIDs and developer agreements, we could probably get these corridors done or along way to being done for about $450 to $550 million.
Add to that about $75 to $125 million for fixing other frustrating bottlenecks at 360, Parmer Lane, Brodie and others.
$50-$100 million for sidewalks and trails.
Around $20 Million for fixing dangerous intersections.
Another $20 million for bikes.
All told, we’re looking at about $720 Million. Give or take…
What does it mean to get there?
I know that stopping at $300 Million… what we can do without raising taxes, is the safe political answer and the politically safe option.
But, if we add two pennies onto our tax rate. That would give us $420 million more for transportation – a total of $720 million.
This would raise the average property tax bill by a little less than $5 a month. Polling shows us that this is not too heavy a lift.
But focusing on the tax rate is not the smartest way to go here. This reminds me of a story someone told me a story once about a jumbo jet flying. Full of people. Everything’s going fine when, BANG, huge explosion. Plane shudders, jerks, but rights itself. Flight attendant comes on:
“Attention ladies and gentlemen, we just lost an engine. But don’t worry, we have three more. Only problem is, we’re going to be a half hour late to our destination.”
Plane keeps flying. After a little while, BANG, another engine blows. Plane keeps flying. BANG. Another engine. One left. Then… BANG!
“Oh God!” yells one passenger. “Now how late are we going to be?!”
Folks, I just read a report about affordability in Austin, and I want to share with you the last number you’ll have to remember today: 1.4%
That’s how much of the median family’s income they pay every month in city property taxes.
The Council is beginning its budget season. We’ll talk about public safety spending, and HHS, and parks We’ll fight over spending and saving. You know how much money is really in play? We’re going to be arguing about whether the percentage of income spent on City of Austin is going to be 1.2 percent to 1.6 percent. That’s it. That’s how this Council is going to be graded. Last year, your council became the first in history to cut not only the tax rate, but also absolute taxes on the median priced home. You know how much we saved the average homeowner? $14.
When people talk about Austin not being affordable, are they talking about city of Austin property taxes?
The median Austin family pays a lot more on housing and transportation. The percentage for housing is 21.6% of monthly income. Compared to 1.4% for COA property taxes. And transportation is 14.9% of monthly income. Again, compare that to 1.4% for COA property taxes.
For those of lower median family income the percentages for housing costs grow to almost 50% of family income.
According to Department of Housing and Urban Development Guide for Creating Connected Communities, typical households in auto-dependent neighborhoods spend 25 percent of their income on transportation costs, but this number drops to 9 percent in neighborhoods with a variety of mobility options.
Smart corridors become corridors of opportunity by reducing transportation costs, with transit oriented development that provides job opportunities, combined with the preservation and/or creation of affordable housing units near transit-ways.
We can’t be focused on saving a few dollars on property taxes. If we’re serious about affordability in this city, then we need to focus on housing and transportation costs. That’s why Austin is unaffordable to so many.
If we go all out on this bond, fix up our roads to relieve traffic congestion, increase housing density where we want it, and get buses and bikes out of your way so you can keep going, we’ll be doing big things on affordability.
We talk a lot about affordability in Austin without having to prove it up. Well, if you’re talking about affordability and you’re not talking about housing and transportation, then you’re not really talking about affordability.
You might think you’re worried about affordability if you want to “hold the line” against a tax increase, but listen to this: Remember the 1.4% of the average homeowner’s budget goes to city property taxes every month? Well, if we go big and add two pennies to our tax rate, that monthly percentage goes up to 1.46%.
If you’re more worried about increasing the average monthly tax bill by zero point two percent than you are about doing something meaningful on affordability and traffic congestion, then you’re the guy on the plane that’s about to crash who is worried about how late you’ll be.
The time to tinker has passed. We’ve tried hoping things will work themselves out. We didn’t build roads. They still came.
When it comes to housing and transportation, Austin has too much demand and too little supply, which is how we ended up with the most economically segregated city in the country bisected by the most congested road in Texas.
The past-due bills on mobility and affordability are stacked high in Austin. It’s time to pay them.
This is a clear choice but, for some, a hard decision. No one ever promised us that doing the smart thing would be easy.
Just as Kirk Watson and Lyndon Johnson before him have shown, we have to break out of old ways of thinking and use the brains our mommas gave us.
Lyndon Johnson and Tom Miller pulled this region out of darkness and protected us from floods.
Kirk Watson’s vision has given us a next-generation medical school and, soon, a freeway we use instead of avoid.
And all of us, working together, can lift Austin out of an obsolete way of thinking and finally get ahead of growth.