Austin, Texas is making efforts to put housing in its opportunity zones. Opportunity zones were originally intended to be spur growth in economically disadvantaged areas, but according to Austin’s Planning Commission, the incentives are driving commercial development to the detriment of the city’s housing supply, Austin Monitor reports.
On August 13, during the commission’s next meeting, it will consider an initiative that would amend city code so that any opportunity zone property with General Commercial Services (CS) zoning could add a vertical mixed-use designation if desired.
According to the commission, added entitlements, including elimination of floor area ratio limits to reduced parking requirements, may prove enticing enough to encourage housing. Commissioner Carmen Llanes-Pulido stated that though the current opportunity zones are not helping with affordable housing in gentrifying areas, she questions whether vertical mixed-use zoning would ultimately make the problem worse.
“I would really like to see more compelling evidence that (vertical mixed-use) will actually curb displacement or prevent displacement in these areas,” Llanes-Pulido said in Austin Monitor. “Because I can personally attest to blanket (vertical mixed-use) decisions causing and accelerating extreme displacement of both residents and small businesses.”
Across the country, after being designated as “opportunity zones,” low-income and high-poverty areas have seen a surge in sale prices. According to the Department of Housing and Urban Development (HUD) Director Ben Carson, “opportunity Zones present tremendous promise for America’s distressed communities.”
Earlier this year, HUD announced that is seeking public input on how the Department can use its existing authorities to maximize the beneficial impact of Opportunity Zones for residents and their communities. Investors, keen to receive a discount on capital gains taxes for investing within these areas, flock to these opportunity zones, according to an analysis by Zillow.
According to Zillow, sale prices in all eligible areas "grew faster than prices in places that weren't, but after opportunity zones were selected, price-growth trends diverged among eligible tracts."