By CASSIE MCKEE, Four Points News
Newly-elected District 6 City Council Member Don Zimmerman has said he is strongly opposed to Foundation Communities’ proposed Cardinal Point apartment complex, which would break ground next year on Four Points Drive if the project is approved.
“I am the one leading the fight against these projects,” Zimmerman said. “They’re unaffordable and they’re unsustainable. It’s intolerable and it has to stop. I’m strongly opposed and my staff is working to get the word out.”
Housing tax credits
Zimmerman says the project is unaffordable because it relies on a 9 percent housing tax credit from the Texas Department of Housing and Community Affairs. TDHCA in turn receives funding from the federal government.
“They depend on federal tax subsidies,” he said. “The federal government is in such bad shape that it got a credit downgrade. We have $18 trillion of debt. The federal government is basically bankrupt. They’ve made promises they can’t keep and are spending money they don’t have. This is contributing to the bankruptcy of the federal government.”
Foundation Communities — which has 18 communities mostly throughout Greater Austin — applies for tax credits which help with the cost of construction. Ultimately the project is less expensive to build “so we don’t have to charge as much for rent,” said Foundation Communities executive director Walter Moreau. He said there is a lack of affordable housing in Four Points.
“Four Points is an area to target because really there is nothing affordable in that area,” Moreau said. “One factor is that many who work in Four Points can’t afford to live in Four Points.”
He said rent for a two-bedroom apartment in a Foundation Community development averages between $700 and $800.
Funding, higher taxes
Foundation Communities received $30 million from the state in August 2014 for affordable housing projects in Austin, according to prior news reports. The $30 million was added to a total of $43 million to build three new affordable housing projects: Bluebonnet Studios on South Lamar, Lakeline Station Apartments near the Lakeline Train and bus station, and Southwest Trails Phase 2, which features 58 new apartments for low-income families in the Oak Hill neighborhood.
Zimmerman said projects that rely on government subsidies end up resulting in higher taxes for everyone, which in turn increases the cost of living.
“Every time taxes go up, it prices people out of the market where they can’t live here,” he said. “It’s a vicious cycle of unaffordable homes and more subsidized housing. To have a program that depends on deficit spending is unsustainable,” Zimmerman said.
In response to Zimmerman’s comments, Foundation Communities communication coordinator Alyah Khan provided the following statement:
“Foundation Communities is committed to making Austin a better place for everyone to live. We build affordable, beautiful housing for hard-working families that’s close to where they work, saving them a long, daily commute. Our family properties include on-site community learning centers, home to our successful afterschool and summer learning programs for kids, as well as our signature adult education, financial stability, and health programs.”
About 80 percent of Foundation Communities’ budget comes from tenant rents, which cover operating expenses for the communities, according to information on it website.
Foundation Communities and community partner Realty Austin recently raised $1,258,570 in pledged funds to support affordable housing in Austin at an annual fundraising luncheon at Foundation Communities’ newly-developed Capital Studios Apartments in downtown Austin, according to a Jan. 14 press release.
Yvette Boatwright, co-owner of Realty Austin said, “The work Foundation Communities accomplishes is tremendous and something we are proud to support. They serve an important role in our community for our neighbors who struggle. The response from our team has been overwhelming, as they have signed up to make a deeper impact by providing supper clubs, family support, back-to-school assistance and more.”
This isn’t the first time Zimmerman has spoken out against the organization. In 2013, he lead an effort that criticized Foundation Communities for using taxpayer funds to lobby local voters to support an affordable housing bond proposal on the November 2013 ballot. An organization known as the Travis County Taxpayers Union, which Zimmerman serves as treasurer, issued a press release that said from March to September 2013, Foundation Communities spent $103,000 to promote the City of Austin affordable housing bonds.
Zimmerman also criticized the non-profit for its high salaries. Moreau was paid a salary of $162,780 in 2013, according to IRS filings. Four other executives within the organization were also paid more than $100,000 that year.
Zimmerman said homeowner associations must register with the Texas Department of Housing and Community Affairs in order to voice their opinion on the Cardinal Point project. To register, HOA’s or neighborhood organizations must provide the following:
- Neighborhood Organization name, city and zip code,
- Contact information for two members who live within the Neighborhood Organization boundaries. (Should include name, address, phone number and email),
- Proof that Neighborhood Organization is in existence prior to January 8, 2015 (bylaws, meeting minutes, newsletter, etc.),
- A map that clearly defines the Neighborhood Organization’s boundaries.
The deadline to register is 5 p.m. Jan. 28. The required information may be faxed to (512) 475-1895 or toll free at (800) 733-5120 or emailed to email@example.com. For more information, visit http://www.tdhca.state.tx.us/multifamily/docs/15-NeighborhoodOrgRegistration.pdf.
If approved, the project would break ground next year and open summer 2017.