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Issued: May 2002

SUMMARY

In response to the housing crisis in Austin, the City Council passed a resolution establishing a S.M.A.R.T. Housing initiative, which was consistent with best practices and recommendations from the Community Action Network report, Through the Roof. The S.M.A.R.T. Housing initiative established a set of criteria to be met by developers of reasonably priced housing for families with incomes of 80 percent or below the area median family income (MFI) in order to receive City incentives. Incentives offered to developers included

• land development fee waivers and
• expedited development review.

The scope of this audit covered the time period from April 2000 through September 2001.

Implementation of the S.M.A.R.T. Housing initiative is having a positive effect on the development of reasonably priced housing in Austin.

• 329 reasonably priced S.M.A.R.T. Housing units have been completed, including single- and multi-family units.
• An additional 3,368 reasonably priced S.M.A.R.T. Housing units are in various phases of the development process.
• S.M.A.R.T. Housing also includes units that are marketed to families above 80 percent MFI.
• Fees waived under the S.M.A.R.T. Housing Resolution and within the scope of this audit total approximately $1,214,000.

S.M.A.R.T. Housing staff has had only limited success in forming public-private partnerships with developers.

• Neighborhood Housing and Community Development has certified ten public-private partnership projects.
• However, only one public-private partnership has produced and sold any units.
• None of these certified projects are planned to include housing for the very low to low-income families.

Some requirements of S.M.A.R.T. Housing improve the quality of new housing.

• All S.M.A.R.T. housing must meet the Green Building Level 1 standard, and accessibility standards.
• Reasonably priced S.M.A.R.T. housing must also meet these standards.

Current S.M.A.R.T. Housing performance measures are insufficient for assessing results and holding staff accountable.

• Measures reported in the budget and business plan are not aligned with S.M.A.R.T. Housing services, reducing ability to hold staff accountable for results or performance.
• Data collection is not adequate and reporting may be misleading.

Waived fees of approximately $1,214,000 have not been accounted for in any City budget program.

• Neighborhood Housing and Community Development has not documented all fees waived for each project.
• No reliable method has been developed to identify all fees waived under the S.M.A.R.T. Housing Resolution.

Criteria established by the S.M.A.R.T. Housing Resolution lack consistency in ability to enforce.

• Not all S.M.A.R.T. Housing units meet the criterion for affordability, i.e. the household spends no more than 30 percent of income on housing.
• For some reasonably priced S.M.A.R.T. Housing, the five-year retention period requirement is difficult to enforce.
• Compliance with the transit orientation specification is assured only in the event a transit stop is already located within 1,000 of the development.
• Projects are not evaluated for compliance with any specified mixed-income criterion.

S.M.A.R.T. Housing lacks a formalized contract with the developer and management controls for managing the activity.

• There is no binding contract between developers of S.M.A.R.T. Housing units and the City.
• Current agreements are not sufficient to ensure recovery of waived fees if the developer does not build the proposed number of reasonably priced units.
• The S.M.A.R.T. Housing service does not have an adequate monitoring function.

Click here to go to our audit request form to request a hard copy of this report (Report No. AU01303) or download the entire text of the S.M.A.R.T. Housing audit (Size: 1488 KB) in Adobe Acrobat. You will need Adobe's Acrobat Reader to view these files.

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