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CodeNEXT Draft 2.0, What it Means for East Austin

CodeNEXT Draft 2.0, What it Means for East Austin

The City of Austin released their second draft of the long awaited and largely controversial CodeNEXT zoning revisions last Friday, September 15th. The draft comes in response to the first round of comments and suggestions from the community, and mayor Steve Adler urged critics to continue engaging in the revision process in order to make the third draft more representative of the city's needs. 

The CodeNEXT initiative attempts to rectify Austin's development shortcomings, seen largely as a result of the city's continued adherence to out-of-date and out-of-touch zoning codes left over from the 1980's. Honing in on affordability issues, CodeNEXT is primarily concerned with residential density in Central and East Austin. The incentive mechanism, referred to as "density bonuses" will allow developers to build in excess of current unit maximums so long as they commit to reserving a percentage of said units for low-income residents. 

Affordability is worthy cause, especially when today's buyers are looking at a median list price per square foot of $377 in historically low-income East Austin.  In order to work, however, density bonuses will have a profound affect on the cityscape. In some areas, condominiums could grow from a maximum of four stories to seven.  In others, where height restrictions are less flexible, density bonuses would increase density-per acre-allowances nearly three fold, from 24 to 64 units. Such drastic changes have many residents up in arms about the future of their neighborhoods. Ironically, many of these critics are often those concerned with affordability as well. 

With CodeNEXT's density bonus program, typical East Austin apartments like these could grow by three stories if developers agree to retain a percentage of their total units for low-income tenants. 

With CodeNEXT's density bonus program, typical East Austin apartments like these could grow by three stories if developers agree to retain a percentage of their total units for low-income tenants. 

But what about the economics of CodeNEXT? Generally, cost-per-unit decreases as one scales up their development. Still, when developers must sell a percentage of their units at a loss in order to increase overall size, that loss must be made up somewhere to balance the sheet. What effect will this have on the cost of those units not reserved for low-income housing? And the resulting effect on affordability at large? Despite the City's best efforts, the housing market is just that: a market. And with an estimated 157 people  moving to greater Austin every day, it's hard to imagine even the most draconian regulations controlling the laws of supply and demand. 

We'll see these proposals change in the coming months as the city takes into account more community feedback. Austin's aging development regulations have hindered the city, particularly in the large-scale urban growth realized over the past decade. Our thoughts aren't meant to discredit the noble work towards progress. They serve only to highlight that the issue is complicated, and the decisions difficult. Should Austin's rate of growth continue in the coming years, those seeking affordability might find their best bet in the periphery. 

 

Concerned with how CodeNEXT might affect your development? Feel free to contact any of our experts for a consultation! 

Have thoughts about how the City of Austin could improve CodeNEXT? Get involved with the revision process here!

Slow Drives and Side Streets: Urban Geography and Commercial Market Analysis

Slow Drives and Side Streets: Urban Geography and Commercial Market Analysis

It's amazing what one can glean from a slow drive through a neighborhood. The urban geography of an area like East Austin says so much about the market by way of its housing stock, architectural trends, successful local businesses and failed ones, too. But what (or rather, who?) is a, "market"? And how does walking past Cisco's on East 6th tell you anything about it?

Our first East Austin purchase back in 2006, 1101 E. 6th Street

Our first East Austin purchase back in 2006, 1101 E. 6th Street

We talk about the market as if it's an individual, a monolithic persona capable of making big decisions of it's own free will. The reality is, a market is nothing more than the collective tastes and preferences of the people who participate within it. Given our unique backgrounds, cultural and familial values, financial restraints, and personal tastes, every population generates a collective demand for locally provided goods and services. Suppliers try their best to anticipate and satiate said demand, and the game is played out on the chess board that is our city streets. 

What does this understanding of a market mean for developers? It attempts only to highlight the importance of demography. The demographic structure of an area is the direct driver of local businesses' success or failure. As a developer and landlord, demographic analysis  is crucial to attracting and securing tenants that will be successful and, by extension, stable. 

The City of Austin generates a plethora of demographic maps and information based on age, race, ethnicity, personal income, and even political party, all of which is open to the public. Unfortunately, most of this information is a result of data collected during the most recent national census (2010). In high-growth corridors like East Austin, people and businesses are moving fast, and any developer waiting until 2020 to analyze their market is doomed to fail. 

A demographic map of median family income generated by the city of Austin using 2010 census data. 

A demographic map of median family income generated by the city of Austin using 2010 census data. 

Here is where an awareness of urban geography can be invaluable. Taking in the sights and sounds, the cultural and economic cues of an area, can be just as informative as any demographic data, no matter how recent. Where are people buying their groceries? Where are they banking? What type of food is the newest restaurant serving? What was the last place to go out of business? What architectural motifs are the newest developments donning? What genre of music is the local radio station playing? What services are being provided in the area?  All of these phenomena are clues for the savvy developer, and just as much market insights as a demographic map of median income. They tell us something about who is inhabiting the space in question; the collective "who" that, by way of their individual choices, will decide the fate of every new development. 

It's understandings like these that have helped Beck-Reit Commercial formulate our, "boots on the ground" approach to real estate. We spend our days out in the community because no information is more accurate than what's happening on the street in real-time. We hope that all of our clients find their inner geographer and take the time to appreciate a slow-drive down a side street. That being said, don't hesitate to ask one of our experts like V. Bruce Evans to help perform in-depth market and feasibility analyses on your latest project, or to contact the boss lady and East Austin Expert herself DeLea Becker to talk tenants and who might fit your development best. 

 V. Bruce Evans CCIM ~Joins the Beck-Reit Commercial Team

V. Bruce Evans CCIM ~Joins the Beck-Reit Commercial Team

Broker and Agent V. Bruce Evans has joined the Beck-Reit Commercial team as an agent, analyst, and, more specifically, as our Buyer's Specialist. V. Bruce is a man of many merits, all of which we are grateful for as Beck-Reit Commercial continues to grow, so it's important we give him a proper introduction to make his skills and knowledge known to our Clients & Community.

V. Bruce Evans and Beck-Reit Commercial Owner DeLea Becker

V. Bruce Evans and Beck-Reit Commercial Owner DeLea Becker

For 25 years, prior to becoming a broker, V. Bruce worked with the architectural, engineering, and construction community of Austin as a representative for manufacturers of commercial and industrial heating and air conditioning products. V. Bruce also represented professional firms in their pursuit of private and public civil engineering projects at the local, county and state level. His extensive background in electrical and mechanical construction has made V. Bruce a sage for buyers trying to evaluate properties for either purchase or lease. By conducting Comparative Lease Analyses, Feasibility Analyses, User Cost of Occupancy Analyses, Lease vs. Buy Analyses, and by generating forward-thinking Financial Models, V. Bruce has found a niche helping clients make tough decisions. 

A native Austinite, V. Bruce may be one of the most connected community members in the Real Estate game. Despite his ambitious career, V. Bruce has been active in the community and city politics as a member of Leadership Austin (2007), of Greater Austin Chamber of Commerce, Real Estate Council (RECA), and as a board member and 2018 president-elect of the Central Texas Association of Realtors (CTCAR). As if that wasn't enough, V. Bruce is also the District 6 appointee to the City of Austin's Zoning and Platting Commission (ZAP), Chair of the joint PC & ZAP Comprehensive Plan Committee and Vice-Chair of the 2018 City of Austin Bond Election Advisory Task Force as well as a Certified Commercial Investment Member (CCIM) designee. 

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What do all these accolades mean, aside from their representing V. Bruce Evans' numerous undertakings and achievements? It means V. Bruce has access to more resources in Commercial Real Estate than just about anyone. Information is everything when acting in the marketplace, and V. Bruce has spent his career developing the connections necessary to stay informed. At Beck-Reit Commercial, we take a "boots on the ground" approach to business, using our experience and gaining more not in our offices, but in the field. We're thrilled to have V. Bruce join us and look forward to better serving our clients as a result. 

Contact V. Bruce here for all your commercial property needs! 

East Austin for Lease | Retail or Office

East Austin for Lease | Retail or Office

Hip East Austin Building for Lease.  Available immediately for Office Or Retail.  Average lease rate for east austin - $35/sf + NNN.  NNN Estimate is $12/SF for Taxes, Maintenance and Insurance.  Parking available behind building. Amazing signage opportunity.

Meet Mark Melon-Werch | Newest Beck-Reit Commercial Realtor

Meet Mark Melon-Werch | Newest Beck-Reit Commercial Realtor

Beck-Reit has built a wonderful team to move quickly & proactivly providing best service to all clients that walk through the door.  But there was a hole, they needed someone who was comfortable with development work plus industrial & office leasing. In comes Mark Mellon-Werch, newest addition as Leasing Specialist.