BG Reads | News You Need to Know (June 25, 2021)
Credit: The Austinot CC BY 2.0 , via Wikimedia Commons.
[MEETING/HEARINGS]
[AUSTIN METRO NEWS]
As Austin booms, homelessness faces crackdown (Wall Street Journal)
A freeway overpass shaded Elizabeth Contreras’s tent from the hot Texas sun, five years into a stretch of on-and-off homelessness that began when her husband left her, she said. Austin Police Officer Rosie Perez stopped by the tent last week with a written warning for Ms. Contreras: Within weeks, she would need to be gone.
Police officers are beginning to enforce new city and statewide bans on public camping, after a two-year battle over Austin homeless policies. Amid a growth boom that accelerated the city’s affordability crisis, homelessness has increased and local shelters are mostly full.
“You guys are asking ‘Where do I go?’ and I don’t have an answer for you,” Ms. Perez told Ms. Contreras. “But I know the process is going to continue.”
Cities nationwide are grappling with how to respond to homelessness after the coronavirus pandemic. This rapidly growing city of nearly 1 million has an estimated 3,160 people experiencing homelessness, according to an estimate by the Ending Community Homelessness Coalition, a nonprofit that serves as the lead agency for homeless services in the Austin area. While that is a small number compared with many West Coast cities, the issue gained visibility after a change to city policies led homeless encampments to spread across downtown Austin and popular walking and biking paths… (LINK TO STORY)
New study shows which ZIP codes are seeing most growth post-pandemic (KVUE)
It is no question that Central Texas real estate is booming at a rapid pace, but exactly how much has it grown since before the COVID-19 pandemic?
A new study released by Orchard looked at all real estate transactions for each ZIP code in the Austin area from January 2020 to March 2020 compared to the same time frame in 2021.
Areas west and north of Austin are seeing the biggest boom in both median home prices and days on the market, according to the study.
Homeowners are flocking to places like Marble Falls, Burnet, Leander and even Wimberley, where median home prices grew by 68%, the biggest jump of all ZIP codes.
While multiple factors come into play – including new tech giants moving to town – the coronavirus pandemic also played a significant role in this shift. Homebuilding supplies ran into shortages, and people started working from home more, so commuting was no longer an issue.
"That 60-minute commute is not really as big of a deal when you're only looking at maybe doing it once or twice a week," said Rachel Bennett, a home advisor at Orchard. "People are really willing to do that if it means I get to buy a larger house in a nicer area that I am happier with."
The report also found that 29 ZIP codes in the Austin area had median home prices over $100,000 more than what they cost in the months leading up to the pandemic… (LINK TO STORY)
Developers, planners key to housing the city’s homeless population (Austin Monitor)
City and nonprofit leaders tasked with helping the city’s growing homeless population see a need for short-term temporary housing and longer-term planning strategies that will make it easier to build homes and provide services for those in need.
The ongoing push to update Austin’s building code, the permitting and planning processes and the difficulties caused by neighborhood groups opposed to affordable housing were some of the challenges discussed at Urban Land Institute Austin’s June membership breakfast, which brought together real estate, development and planning professionals at Austin Central Library.
Pressure to address the homelessness issue appears to be growing by the day, with Austin’s median single-family home price rising by $100,000 over the past five months and city leaders forced by a May election to prohibit camping and resting in public places.
With the city and nonprofit groups such as Foundation Communities working to build more affordable housing units, the city’s lead manager on the issue told the room of property owners that more existing units need to be made available for temporary supportive housing.
“While the city supports construction of affordable housing and housing specific to people experiencing homelessness, most of those people will need to be placed in the private rental market,” said Dianna Grey, Austin’s homelessness strategy officer.
“So the partnerships with private property owners and managers are going to be really critical to getting access to placing people back into housing.”
With housing projects of any kind taking years to complete, Foundation Communities Executive Director Walter Moreau said those looking to get people off of the streets need to have patience and a willingness to help.
“The challenge is it takes time to develop a project, three years minimum, so I hope people will be patient. We can solve this problem and it will take time, so we need more short-term emergency solutions.”
Ahead of the May approval of Proposition B that outlawed public camping, an assortment of community groups and agencies held a summit on homelessness that led to a plan to house 3,000 homeless people over the next decade. That plan comes with an expected cost of $240 million, with the city committing $100 million from its American Rescue Plan funding toward the effort… (LINK TO STORY)
Expansion still on Austin airport's radar — here's what has to happen first (Austin Business Journal)
Life is returning to Austin-Bergstrom International Airport. Activity has picked up since the start of the year, both in the form of passenger travel and airline commitments.
Those metrics, coupled with the metro's fast-growing population, have signaled to airport officials that it's time to readdress a long-anticipated facility expansion. Before the pandemic hit, plans were in motion to nearly double the size of the airport — critical to keeping up with air travel demand in a city where the economy has hardly missed a beat during the pandemic.
"We recognized right before Covid that we needed to build ... to match the growth that was coming," airport CEO Jacqueline Yaft said. “We do have room right now. ... But we do need to still design today and construct to be able to have the facility open when we’re at full capacity or exceeding that.”
That's good news for Austin's growing business community. Air travel is a major emphasis in economic development circles and is also a huge contributor to the health of the local hospitality sector, which still hasn't recovered fully from the pandemic. And while there's no hard date yet for when an airport expansion may move forward, it's critical to remember that whatever decisions are made around the speed and scope of the process will impact a wide variety of companies, from real estate firms looking for contracting to tech startups that need to connect with customers or investors in far-flung locales.
Yaft said airport officials are considering how to move forward with pieces of the expansion and financing mechanisms. The Austin airport lost revenue last year when it recorded its lowest annual traffic seen opening in 1999, with nearly 6.5 million total passengers. That has impacted its ability to move forward at the same pace outlined in the 2040 Master Plan. For reference, in 2019, ABIA saw 17.3 million travelers.
The extensive plan calls for construction of a second concourse, improvements within the existing Barbara Jordan Terminal, a tunnel to the new concourse, curbside upgrades and more taxiways. Up to 32 gates will be constructed to increase capacity to 31 million travelers annually by 2037. The Barbara Jordan Terminal currently has 34 gates, some of which are leased by airlines. The South Terminal has three gates.
The airport's new strategy is called the Airport Expansion and Development Program. Yaft said the plan is still to eventually fulfill the goals set forth in the long-range master plan. But, in the meantime, officials are trying to figure out which elements of the plan are most needed… (LINK TO STORY)
Outdoorsy raises $120M, launches insurtech division (Austin Business Journal)
Outdoorsy Inc. has introduced its own insurance-technology business and will be scaling it using $120 million of fresh capital.
The Austin-based, on-demand recreational vehicle rental startup also continues to grow its outdoor-experience offerings with a partnership it announced earlier this month with Denver-based outdoor luxury accommodations company Collective Hotels & Retreats Inc.
The company announced June 24 it had closed the equity and debt financing round.
New York City-based Moore Strategic Ventures led a $90 million private placement equity round, which also included investors ADAR1 Partners, Monashee Capital, SiriusPoint Ltd. (NYSE: SPNT) and Convivialite Ventures. Existing investors Altos Ventures, iAngels and Greenspring Associates also participated.
California-headquartered Pacific Western Bank provided the $30 million debt facility.
The company has raised more than $220 million to date. Outdoorsy in January 2019 closed a $50 million series C round of funding.
Roamly Insurance Group is Outdoorsy’s new insurance division. By offering this type of insurance to its customers, their vehicles are designated as “rent-ready” and, they no longer are violating laws that prohibit an RV owner from commercializing the vehicle, said co-founder and CEO Jeff Cavins… (LINK TO STORY)
Austin school board approves $1.8 billion budget, staff bonuses and possible 2% raises (Austin American-Statesman)
The Austin school board on Thursday unanimously approved a $1.8 billion budget, including staff bonuses and a pay bump for hourly employees.
It could also come with a tax increase of hundreds of dollars for the average homeowner.
For now, the district is keeping the tax rate at $1.1027 per $100 in property value, meaning a $473 tax hike for the average home with a market value of $554,160.
But under the Legislature's 2019 school finance reform, the district is set to receive a compressed tax rate from the state in August for the board to officially adopt its tax rate in September, said George Gogonas, the district's interim chief financial officer.
Austin officials said they will have to pull $43.6 million from the district's reserves to cover local operating costs, even as they are projected to send $709.4 million of local property tax revenue to the state to help fund property-poor districts… (LINK TO STORY)
[TEXAS NEWS]
Greater disparities to emerge in Texas as unemployment benefits, protections against evictions and utility shutoffs end (Texas Tribune)
Rush hour traffic has returned, and downtown bars are loud, crowded and rowdy again. But the easing of the COVID-19 pandemic also means economic safety nets are vanishing — and Texans struggling to make ends meet may soon fall even further down a financial hole this summer.
Federal unemployment benefits end for Texans on Saturday. Their electricity can be cut for nonpayment starting Tuesday. For renters, evictions will begin to proceed normally again at the end of July.
“We’re going to see disparity in the coming months as social safety nets are being taken away, and people are going to have to figure out all these things on their own,” said Pia Orrenius, a senior economist at the Federal Reserve Bank of Dallas.
Economic indicators show that while rents stayed relatively unchanged in 2020, landlords are increasing rents again. Inflation is up, and expected to keep climbing. Credit card companies that offered forbearance or lower payments are ending those accommodations.
“This is a big transition back to some new normal, and some families are going to be squeezed more than others,” Orrenius said. “Everything is going to hit at once.”
A U.S. Centers for Disease Control and Prevention order had halted evictions of renters who meet certain criteria, but that will expire at the end of July following this week’s one-month extension — which the agency said will be the final one.
A moratorium on electricity disconnection was put in place by state regulators in February due to the winter storm that knocked out power to millions of Texans for days, but the Public Utility Commission recently lifted it; companies now have to give delinquent customers 10 days’ notice before shutting off their power… (LINK TO STORY)
Paxton spokeswoman resigns after being pushed to film at border without security (Houston Chronicle)
A press secretary with the Texas Attorney General's office has resigned, claiming her security concerns were ignored when she was ordered to make a trip to the Mexico border to produce informational videos for the agency. Kayleigh Lovvorn Date, who had been employed by the communications office for about five years, said in a formal complaint obtained by Hearst Newspapers that she had been asked in May to film video interviews of property owners in Bracketville, east of Del Rio, without a security detail or protective gear. In her complaint, Date noted that First Assistant Attorney General Brent Webster, who thought up the border video series, and Attorney General Ken Paxton had worn bulletproof vests during a portion of their visit to the border, but would not provide herself and her team with similar protection.
The office has been known to create flashy videos promoting its work on immigration and other issues, often featuring dramatic music and video of interviews Paxton has done with Fox News. The Republican Attorney General is seeking a third term in 2022. Date, who did not respond to a request for comment, and others with concerns were told by superiors to “just bring our guns” if they felt unsafe, she wrote in the complaint. She said she doesn’t have a handgun license or training. Though Paxton and other Republicans have referred to the border as lawless — Gov. Greg Abbott is calling the same area “overrun by gangs and smugglers” — Date said her supervisors even denied a request to delay the video shoot for a week so she could work on a security plan. Date put in her notice of resignation on May 26, citing in the complaint “prioritization of my mental health and overall wellbeing.” Her last day was June 11. As of April 1, she was paid a $65,000 annual salary, according to the Texas Tribune salary database. “Attorney General Ken Paxton has filed many lawsuits on border security and takes border security and the safety of all Texans very seriously,” Paxton’s communications director, Alejandro Garcia, said in a statement. “Law enforcement prepares security plans for all border trips. We do not release those plans to employees or the public as that could be a security risk for all individuals involved in those trips.”… (LINK TO STORY)
Abbott’s $250M border wall, brought to you by Biden’s $1.9T Covid-19 bailout (Dallas Morning News)
Technically, the $250 million Gov. Greg Abbott pledged last week to continue the Trump border wall will come from the state’s prison budget. But since Texas will receive a $15.8 billion windfall under the huge COVID-19 relief package signed by President Joe Biden in March, hardly any strings attached, in effect the U.S. Treasury will cover the costs -- even though Biden halted wall construction when he took office. The American Rescue Plan sets aside $350 billion dollars in emergency funds for states and local governments. Other than prohibitions on using the money to offset tax cuts or make a pension fund deposit, it’s pretty much anything goes. So it won’t take much sleight of hand to backfill part of the state budget with a torrent of federal cash. Abbott and Trump will visit the border on Wednesday at McAllen to spotlight complaints about Biden’s policies.
Congress didn’t intend for states to use the pandemic bailout for wall construction. Democrats find it maddening that Abbott, whether he touts it or not, has found a workaround. “We have a wall in my district and we still have a surge. What he ought to do is use $250 million to fix our electrical grid,” said Rep. Vicente Gonzalez, D-McAllen, adding that Congress gave states plenty of flexibility but “it certainly wasn’t intended to build the wall.” The governor hasn’t touted the fact that Biden’s signature on the rescue plan effectively triggered a subsidy for the state version of Trump’s stalled project. He announced the $250 million outlay on June 16, in a letter with the four legislative leaders who, with the governor, comprise the Legislative Budget Board, which has the authority to shift funds within the state budget when the Legislature is not in session. “This funding is a down payment to begin design and construction of physical barriers on voluntarily donated private and public lands that border this state and Mexico,” they wrote. Abbott invited private donations, too. As for Thursday, the state had received $527,000, according to his office. Trump spent roughly $15 billion to build 450 miles of barrier along the U.S.-Mexico border, much of it siphoned from the Pentagon budget when Congress refused his demands. Some of the trickier terrain cost as much as $46 million per mile…(LINK TO STORY)
‘An opportunity to shape the future.’ Fort Worth Chamber says city at a critical moment (Fort Worth Star-Telegram)
Leaders of the Fort Worth Chamber of Commerce said businesses are amid an exciting and critical moment as they move past the pandemic. Chamber President and CEO Brandom Gengelbach addressed nearly 400 attendees and hundreds watching virtually on Thursday during the chamber’s annual meeting at Dickies Arena. While 2020 was a year of survival for many businesses, new city leadership and huge population growth have brought new opportunities for economic growth, he said. Fort Worth was the country’s second-fastest growing major city between 2019 and 2020 and is the 12th largest city in the U.S., according to the Census Bureau.
Gengelbach said despite the pandemic, the chamber boasted wins, including nearly 8,000 jobs created and more than $1.37 billion in investments. He said a key to keep businesses in the city and attract new ones is for the chamber and its members to work together and develop different strategies than in the past, such as targeting companies and industries that are lacking in the city, connecting students with businesses and developing sports tourism. The meeting was the chamber’s first in-person event since the pandemic. The in-person attendees, which were limited to the meeting’s more than 50 sponsors, brought together representatives from Baylor Scott & White, Bank of Texas, Visit Fort Worth, TCU and more. The event included speeches from keynote Ozan Varol, a rocket scientist and bestselling author, chamber chair Marianne Auld and Fort Worth Mayor Mattie Parker. Parker said the city is moving full speed ahead in its economic development to make Fort Worth a world-class city and provide opportunities for all residents… (LINK TO STORY)
[NATIONAL NEWS]
Megadonors flooded the New York mayor’s race. Most of them wasted their money (Politico)
To become mayor of New York City, it often pays to get money from New Yorkers.
Outside special interest groups spent record amounts of cash in the mayoral primary this year — almost triple that spent in the last competitive contest in 2013 — but in most cases the investment was an unqualified dud.
All told, political action committees spent nearly $25 million on broadcast, radio and digital advertising, according to data from AdImpact. Their coffers were lined with donations from the likes of megadonors Jeff Yass, Steve Cohen and Dan Loeb.
But the money did little to improve the electoral fortunes of many candidates in the crowded field. In fact, some of the highest-dollar splurges went toward candidates who never got out of the single digits, according to preliminary vote counts from Tuesday‘s election.
And as the race entered its final stretch, deep-pocketed donors, sensing an Eric Adams path to victory, cut big checks to the candidate — setting the stage for conflicts of interest if he emerges from the ranked-choice voting gauntlet and heads to City Hall owing favors.
The impact of outside money, however, depended largely on the strength of the candidate receiving the support, according to POLITICO’s analysis of spending in the race… (LINK TO STORY)
U.S. Companies shifted to make N95 respirators during COVID. Now, they're struggling (NPR)
A year after several American businesses sprang up to manufacture much-needed masks and N95 respirators within U.S. borders, many of those businesses are now on the brink of financial collapse, shutting down production and laying off workers.
The nationwide vaccination campaign, combined with an influx of cheaper, Chinese-made masks and N95 respirators, has dramatically cut into the companies' sales and undermined their prices.
And while some call it a normal consequence of a free market, a few business owners say they feel abandoned by the same government that relied on them to help save American lives during the COVID-19 pandemic.
"This is not only a matter of national security but of national pride," a group of them wrote last month in a letter to President Biden asking for government help.
Last year, dozens of companies like Armbrust American answered the nation's call for more domestic production of personal protective equipment (PPE).
Using its own resources and without government assistance, Armbrust purchased a facility near Austin, Texas, bought machinery, hired over a hundred workers, applied for a complicated and lengthy certification and started manufacturing… (LINK TO TO STORY)