AUSTIN (KXAN) — To give city parks a boost, the Austin Parks and Recreation Department (PARD) wants to make it more expensive for developers to build homes, but some worry it’ll make living in the city even more unaffordable.
The Parkland Dedication fees doubled last year and are set to double or triple again for the next fiscal year.
“The parkland fees allow the city to keep up with growth, prevent overcrowding of parks and expand park access through acquisition and land development,” explained a PARD spokesperson during a city council budget workshop Tuesday.
Builders said that puts them in a tough position.
“Your choice is to either pay the fee and pass it on or to not build. And neither one of those things are beneficial in terms of Austin’s housing affordability crisis,” said Scott Turner, president of the Home Builders Association of Greater Austin.
Turner, who also owns Riverside Homes, a home building company, said if they choose to build, that’s thousands of extra dollars they’ll have to pass down to renters and buyers.
He points to a study by the National Association of Homebuilders that found for every $1,000 increase in the median price of a new home, about a thousand Austin families get priced out.
“To put the Parkland fee in that context, if our fee is going up by around $5,000 or so this year, that’s about 5,000 families that can no longer afford to buy a home in Austin,” Turner said.
The Real Estate Council of Austin said last year’s fee increase resulted in an increase in rent for new apartments by $10 to $50 per month.
They also said the increase stopped the development of hundreds or even thousands of new housing units in Austin.
Another recent study by the Texas A&M Real Estate Research Center found Austin is one of the most expensive cities in Texas to build a home due to permitting and developer fees.
PARD said without the increase in fees, unless more bond funds are made available, “the parks level of service will continue to decline.”
Shannon Murray said parks should remain a priority for Austin — it’s where she spends a lot of her time when visiting from Houston.
“It’s definitely something that makes Austin stand out,” she said.
But she doesn’t think the decision is fair.
“The parks belong to everyone. Why does it have to be an either-or choice of: do we maintain our parks or do we make housing affordable?” she said.
City council member Natasha Harper-Madison agreed.
“Maybe we don’t have to continue to have this, you know, parks or housing conversation. In fact, it’s my sincere hope that we never have to do that again,” she said.
Harper-Madison is looking to pause the fee hike.
“It’s a complex subject matter, and we really need to figure out the best way to calibrate it, so that nothing has to be lost on it,” she said. “There are other fees that we should be looking at.”
PARD said if fees are frozen at FY2022, it anticipates losing out on $15 to $18 million in Parkland Dedication Fees in FY2023.
The agency said it would also affect access to parks in the long run.
“Today, 32% of Austin residents are not within walking distance of a park. Fifty to 60% of population growth by 2040 is forecasted to occur in park deficient areas, with the majority of the areas located in the Eastern Crescent,” a spokesperson wrote in an email to KXAN News.
But Harper-Madison said it’s worth it to take one year to take an in-depth look at the fee’s impact on housing.
“Basically, it’s just another opportunity to remove barriers to the production of the yield that we so desperately need,” she said.
Turner said it’s a good plan to pause and try to rein in affordability.
“I love Austin, but we wouldn’t be able to live here because the housing prices have just gone up so much,” Murray said.
New parkland fees for commercial developers
As part of budget discussions, city council members are also deciding whether to make commercial developers also pay a parkland dedication fee to give parks a boost.
The move could add hundreds of thousands of dollars in fees for a single building, which commercial developers say could be passed to tenants of those buildings, like small business owners.
If passed, PARD estimates it could bring in $4 million to its budget.
The ordinance would not apply to civic buildings like schools, hospitals or daycares.
City council could take action on it along with a public hearing scheduled for Aug. 17.
Final decisions on both commercial and residential fees are expected when the final budget is voted on, which is scheduled for Aug. 19.