BG Reads 11.27.2024

🟪 BG Reads - November 27, 2024

November 27, 2024

Bingham Group Reads

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November 27, 2024  

➡️ Today's BG Reads include:

🟪 Austin office vacancy rate at an all-time high, among highest in the country (KXAN)

🟪 Jesús Aguirre named Austin's next parks director (Community Impact)

🟪 City to seek new bids for compost collection and processing (Austin Monitor)

🟪 Donald Trump’s tariffs on Mexico could devastate border region, Texas economists warn (Texas Tribune)

🟪  What Trump’s new tariff threats mean for the U.S. Economy (Wall Street Journal)

Read On!

[CITY OF AUSTIN]

🟪 The Austin Council has one (1) regular meeting left in 2024:

  • December 12

In an October 30 memo, City Manager T.C. Broadnax announced several key additions to the city leadership team, effective November 4.

You can view the memo here: CITY OF AUSTIN MEMO: Executive Leadership Team and Organizational Announcements. An org chart is included on page 3.

We particularly wanted to flag the creation of a Grants Division within the Intergovernmental Relations Office to focus on creating a centralized grant funding strategy and governance for the City that advances City Council’s strategic priorities, leverages local resources, and targets investments for Austin. 

The memo notes “the City lacks a centralized grants function causing us to potentially leave federal and state funding on the table. Staff from across the organization are currently being identified for potential reassignment to the Grants Division.”

[AUSTIN METRO NEWS]

➡️ Austin office vacancy rate at an all-time high, among highest in the country (KXAN)

According to commercial real estate information company CoStar, Austin has a record high office vacancy rate. The company said vacancies could keep growing because of millions of square feet of additional office space still under construction.

“Approximately 4.4 million square feet that’s under construction right now, and two million of that is currently unleased,” CoStar Senior Market Analyst Israel Linares said.

Linares said the vacancy rate sits at 16.8%, which is among the highest in the country. Linares said the construction boom contributed to that.

“In the 2021 and early 2022 phase, you saw a lot of hiring happening during that period of time that gave owners, investors, developers, you know, the green light to say, ‘Let’s build more office space to meet this demand,'” Linares said… 🟪 (LINK TO FULL STORY)

➡️ Jesús Aguirre named Austin's next parks director (Community Impact)

Jesús Aguirre—the former head of parks departments in Washington, D.C., and Seattle; and CEO of Waterloo Greenway in Austin—has been chosen as the city's next parks director. He'll start the job in early 2025.“I’m honored to join the Austin [Parks and Recreation Department] team as we work to inspire Austinites to connect, protect, learn and play,” Aguirre said in a statement.

“Austin is at a pivotal moment of growth and change, and parks and recreation are essential to ensuring our communities remain healthy, vibrant and inclusive. I am excited to work with our community members to create spaces where everyone can thrive.”… 🟪 (LINK TO FULL STORY)

➡️ City to seek new bids for compost collection and processing (Austin Monitor)

The question of which contractor or contractors will pick up and deliver compostable items for processing is up in the air for now. Currently, those organic items are collected from customers’ green bins under a contract with Austin Resource Recovery.

At last week’s Council meeting, Mayor Kirk Watson announced that Council would not be considering an item awarding a contract to Organics by Gosh. Watson did not give a reason for the withdrawal of the item, but the Austin Monitor has learned that Austin Resource Recovery “requested the item be withdrawn and that the Financial Services Department re-solicit these services,” according to a city spokesperson, Kimberly Moore.

Further, Moore said via email, “ARR’s reasoning included: (1) the department would be benefited by having multiple contractors but there was only one offeror found to be responsive to solicitation’s requirements, and (2) offeror’s prices are significantly higher than the current contract.”

The decision to withdraw the item came on the heels of the Zero Waste Advisory Commission’s refusal to endorse an expensive contract for a single contractor.

Two companies, Organics by Gosh and Texas Disposal Systems, bid on a contract with ARR for three years, with two possible one-year extensions. ARR has expressed a desire to have two locations for composting so that trucks will not have to drive as far… 🟪 (LINK TO FULL STORY)

➡️ Public-private partnerships seen as key to affordable housing development in the metro (Austin Business Journal)

With a lack of affordable housing among the most pressing problems affecting Central Texas, public-private partnerships have become a necessary tool to help solve it.

That's the view of Nick Walsh, vice president of development at The NRP Group, a for-profit developer of multifamily and affordable housing projects currently engaged in a number of public-private partnerships. Such partnerships are delivering thousands of housing units priced at levels deemed affordable, based on the region's median income levels.

The price of land is just too steep to make regular math work, real estate experts have lamented for years. Relationships that offer tax breaks and other perks only found via the public realm are pretty much needed to balance prices with profit.

"Affordable housing and workforce housing does not happen but for the participation of strong public-private partnerships," Walsh said.

"Without these partnerships, we can't deliver the quality units that are needed that are affordable to folks that would otherwise not be served by the market."… 🟪 (LINK TO FULL STORY)

➡️ City-owned Austin Studios found to have generated $2.6B in economic impact (Austin Monitor)

After a quarter century of operation, the city-owned Austin Studios facility on the site of the former Robert Mueller Municipal Airport has generated more than $2.6 billion in economic impact, according to a recent study.

Last week, Austin Film Society (AFS) released its 2024 Creative Workforce Report, which focused on the economic impact of the local film industry and the workforce development benefits for film-related professionals in the area. The report found Austin Studios, a 20-acre production complex operated by AFS in partnership with the city of Austin, has helped to generate more than 1,100 projects and more than 37,000 jobs.

AFS leaders noted that data from the U.S. Bureau of Labor Statistics show median pay for film and video editors and camera operators was $31.28 per hour in 2022, well above Austin’s current living wage of $21.63 per hour.

Martin Jones, head of Austin Studios, told Austin Monitor the report was partially intended to thank the city for being “visionary and helpful and growing the film ecosystem here in Austin.”

“The work that they agreed to let happen 25 years ago has begat a considerable and sizable impact on the bottom line for the city of Austin, and it solidified Austin as the major hub for production in the state,” he said... 🟪 (LINK TO FULL STORY)

[TEXAS NEWS]

➡️ Donald Trump’s tariffs on Mexico could devastate border region, Texas economists warn (Texas Tribune)

President-elect Donald Trump’s intention to levy a 25% tariff on goods imported from Mexico and Canada sent shockwaves across the country — especially on Texas’ southern border, where the vast majority of trade between the U.S. and Mexico passes through.

In a post on Truth Social on Monday, Trump said he plans to levy a 25% tariff on goods from Canada and Mexico as soon he takes office until drugs and undocumented migrants stop crossing the border. He also threatened to impose a 10% tariff on all products from China, saying the country is sending illegal drugs to the U.S.

Mexico, China and Canada are the U.S.'s largest trade partners, and tariffs would likely disrupt the economies of all three countries by crippling exchange among auto and electronic manufacturers, which ship goods at various stages of production across borders to take advantage of each country’s unique production strengths.

Consumers can expect to see the cost of imported goods rise and the number of jobs in the manufacturing and warehousing sectors decline as the increased prices curtail demand, economists said… 🟪 (LINK TO FULL STORY)

[US and World News]

➡️ What Trump’s new tariff threats mean for the U.S. Economy (Wall Street Journal)

The stiff duties that President-elect Donald Trump threatened against the U.S.’s neighbors and big trading partners, along with the additional tariffs he promised against China, could raise prices for Americans on everything from fresh fruit from Mexico to lumber from Canada and Chinese electronics.

Import-reliant businesses—especially automobile manufacturers—could face significantly higher costs that they would then pass on to consumers. Farmers and other exporters could face retaliatory tariffs. 

Trump’s promise to impose 25% tariffs on Canada and Mexico and an additional 10% on Chinese imports on the first day of his presidency could lead to higher prices, just as the country appears to be turning a corner on inflation. 

Many Americans said they voted for Trump precisely because of brutal price increases they blamed on the Biden administration. 

The tariff threat upends the forecasts of many economists who have been assuming that the duties Trump will impose wouldn’t be nearly as high as what he pledged on the campaign trail. 

Whether a negotiating tactic or an opening salvo in a bid to rework global trade, Trump’s tariff threat represents a ratcheting up of his rhetoric.

On Tuesday, economists at the Budget Lab at Yale reworked their estimates of how tariffs under Trump might affect the economy. 

Tariffs of 25% on Canada and Mexico, and 10 percentage points added to existing tariffs on China, with those countries imposing retaliatory tariffs, would raise U.S. consumer prices by 0.75% next year, according to the Budget Lab.

That estimate drops to 0.65% if households substitute purchases toward domestically produced or lower-tariff imported options. That would amount to more than $1000 in lost purchasing power per household, in 2023 dollars.

If the tariffs against Chinese goods were layered on top of the 60% Trump has already threatened, versus existing tariffs, the estimated inflationary effect would be higher.

Beyond raising the prices that Americans pay for goods, higher inflation could lead the Federal Reserve to cut interest rates less than expected in the year ahead. That would keep rates on credit card balances and other loans higher than they otherwise might have been… 🟪 (LINK TO FULL STORY)

Cities cut red tape to turn unused office buildings into housing (Stateline)

Nearly a fifth of office space across the country sits empty, a record high vacancy rate that’s expected to keep growing. Seeking both to boost their economies and ease their housing shortages, cities are taking steps to encourage the conversion of unused office space into much-needed housing.

They include reductions in approval times, exemptions from affordable housing rules and changes in building code requirements. Some cities and states also are providing tax incentives or subsidies to developers. “Cities need to focus on making conversions feasible by removing unnecessary regulatory barriers,” said Alex Horowitz, project director of the Housing Policy Initiative at The Pew Charitable Trusts.

“The U.S. is short millions of homes, and office vacancy rates are at record highs. It makes all the sense in the world to convert underused commercial space into housing, but the cost per square foot is just too high.”

Purchasing and converting an office building for residential use costs an average of $685 per square foot. Buying a completed multifamily property costs an average of $600 per square foot, while building a new multifamily development costs about $588 per square foot. Regulatory hurdles — such as outdated building codes, minimum unit sizes and natural light requirements — push up costs. Cities are trying a variety of ways to overcome these obstacles.

In September, Minneapolis peeled away several regulations in an effort to encourage conversions, including removing public hearing requirements, requiring less intensive traffic studies, and exempting converted buildings from the typical requirement that 20% to 30% of units be rented at below-market rates.

San Francisco has waived certain planning and building code requirements as well as real estate transfer taxes for downtown conversions that are approved before 2030. Seattle in July approved exemptions for commercial-to-residential conversions from certain design development standards and from housing affordability requirements… 🟪 (LINK TO FULL STORY)

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➡️ Voters rejected historic election reforms across the US, despite more than $100M push (ABC News)

Two weeks before Election Day, activists from across the country gathered for an online rally heralding the historic number of state ballot initiatives seeking to change the way people vote. Hopes were high that voters would ditch traditional partisan primaries and embrace ballots with more candidate choices. Instead, the election reform movement lost almost everywhere it appeared on a statewide ballot.

“It turns out, in retrospect, we weren’t yet ready for prime time,” said John Opdycke, president of the advocacy group Open Primaries, which organized the rally. In Arizona, Colorado, Idaho, Missouri, Montana, Nevada, Oregon and South Dakota — a mixture of red, blue and purple states — voters rejected either ranked choice voting, open primaries or a combination of both.

The open primary proposals sought to place candidates of all parties on the same ballot, with a certain number of top finishers advancing to the general election. Under ranked choice voting, people can vote for multiple candidates in order of preference. If no one receives a majority of first place votes, then candidates who receive the fewest votes are eliminated and their votes redistributed to people’s next choices.

Election reform advocates raised about $110 million for the statewide ballot measures, vastly outpacing their opponents, according to an Associated Press analysis of campaign finance figures that could grow even larger as post-election reports are filed. Still, their promotional push wasn’t enough to persuade most voters. “While Americans are frustrated with politics, I think most Americans are just fine with the traditional way of voting,” said Trent England, executive director of Save Our States, which opposes ranked choice voting... 🟪 (LINK TO FULL STORY)epresented a wide range of clients in the Austin Metro and Texas Capitol at the intersection of government and business.

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