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Bee Cave City Council takes steps on affordable housing amid labor shortage

Sarah Asch
Austin American-Statesman
As housing costs have continued to rise, the gap has grown between what people who work in Bee Cave can afford and what it costs to live in the city.

The Bee Cave City Council voted to take the first step toward building workforce housing. The vote comes amid months of labor shortages affecting local retail, restaurants and schools. 

The city will issue a request for proposals for a development project that would address the lack of affordable housing options in the area and would be on the city-owned Skaags property just west of Hill Country Indoor. 

Mayor Kara King called affordable housing a necessity, and said it is important for people to be able to live in the communities where they work, whether that be teachers, firefighters, police officers, or restaurant and retail staff. 

City Manager Clint Garza said that an affordable housing shortage is putting a strain on local businesses, an especially big problem for Bee Cave because the city relies heavily on sales tax for revenue. At least one business, LoneStar Jacks BBQ, shut down recently, with the owner posting online that the pandemic and staffing issues caused the closure.

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As housing costs have continued to rise in the Austin area, the gap has grown between what people who work in Bee Cave can afford and what it costs to live in the city. The average cost of a home in Bee Cave in August was $791,105, up 8.6% from a year ago that month, according to the Austin Board of Realtors. 

The cost of living in Bee Cave is far out of reach of most retail and food services workers, who made up a combined 35.5% of the local workforce in 2018, city staff told the council. Based on average wages in the Austin area in May 2020, waitstaff and retail sales reps should be spending $600 to $725 on month rent for the housing to be considered affordable. 

Bee Cave has bout 1400 apartment units with an average rent of $1,453 a month for about 975 square feet of space, according to Charles Heimsath, the founder of Capital Market Research.

About 22% of jobs in the city were in the education sector in 2018, and most teachers also do not make enough to live in Bee Cave comfortably. A teacher in the Lake Travis school district with five years of experience should be spending about $1,296 on monthly rent, according to the city’s calculations, which is still less than the average apartment. 

In 2018, 22% of workers in Bee Cave were commuting more than 50 miles, while 32.5% were commuting less than 10 miles. That same year, only 2% of jobs in Bee Cave were held by people who lived within city limits.

Garza said the city’s business community has been trying to solve this problem and has been asking the city to help. Several business owners spoke at the meeting in favor of workforce housing and described difficulties with hiring and retaining staff. 

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Christy Black, a franchise owner of Primrose School of Bee Cave, said she has been arranging for vans to bring in staff traveling from far away.

King said the city’s Economic Development Board is exploring offering retention and recruitment bonuses for local workers who stick around and bring friends to fill jobs, especially because a housing-based solution will not have an impact for several years.

Other options mentioned included offering workers a perk card with local discounts and incentivizing teenagers to work local jobs. 

The Bee Cave City Council voted Tuesday night to take the first steps in bringing workforce housing to the city in response to a labor shortage that is affecting local businesses.

To build affordable housing, the city will have to contend with zoning restrictions that require low density and limit building heights and impervious cover, Garza said.

The council voted to include limits in the request for proposal limiting the impervious cover to 55%, rather than the current code limit of 40%, to broaden the scope of possible projects. The council also included in the request that projects will be required to have third party oversight to ensure that any units built remain affordable in the long term.

King said she would like to see a project that includes a mix of housing that would work for younger single people on smaller budgets and people with families who need more space but cannot afford what Bee Cave’s housing market currently offers. 

“Hopefully if we lead the way on this, (other cities will) see that this is maybe not what people have in their head and then they will come onboard with us as well,” she said. “What we can do, it's not a fix. It’s a dent but it’s not a complete fix. It’s going to take this whole area working partnership to make that happen."