Our evaluation offers insights about patterns of giving
Austin’s high employment sectors are healthcare, training, enterprise companies, and authorities, however you wouldn’t understand it based mostly on native political giving.
In accordance with The Austin Bulldog’s evaluation of donations to Metropolis Council candidates within the first six months of 2020, the true property and building industries account for a major share of political giving.
General, 19 p.c of all candidate fundraising by way of June 30—some $91,500 out of $476,342—got here from individuals working in actual property, building, or associated professions like actual property regulation, structure, brokerage, city design, property administration, or title insurance coverage.
The majority of that giving, practically $68,000, went to only three candidates: District Four incumbent Greg Casar, District 2 candidate David Chincanchan, and District 6 incumbent Jimmy Flannigan.
Staff at one massive agency, Endeavor Actual Property Group, donated solely to these three candidates, for a complete of $12,745. The agency describes itself as “probably the most energetic builders in Central Texas.”
These donations may assist tip the scales in aggressive races this yr, as 4 council members search reelection and 4 newcomers vie for an open council seat being vacated by District 2 incumbent Delia Garza. On July 14, 2020, Garza was elected to be the following Travis County Legal professional.
Flannigan, who raised greater than $81,000 by way of first half of the yr, received about $30,000 of his whole, or 37 p.c, from builders and different stakeholders within the business.
Casar’s share from the business was about $23,500 out of $73,418, or 32 p.c.
For Chincanchan, who till final November was chief of workers of District three Council Member Sabino “Pio” Renteria, the share was practically $15,000 out of $53,723, or 28 p.c. Chincanchan didn’t truly surrender his place with Renteria however as a substitute took a “depart of absence for political exercise,” in response to his personnel file obtained by way of a public info request.
Defining the developer nexus
For functions of the evaluation, we used a marketing campaign finance dataset from the Metropolis Clerk and manually reviewed the “employer” and “occupation” entries for donations to 2020 council candidates, marking up which donations got here from business stakeholders.
The markup included donors who have been employed in one among a handful of NAICS-defined industries: Sector 23 (“Building”), Sector 53 (“Actual Property and Rental and Leasing Sector”), sure occupations inside Sector 54 (“Skilled, Scientific, and Technical Providers”), together with architectural companies and actual property regulation, NAICS Subsector 624229 (“Different Group Housing Providers”), and NAICS Subsector 925 (“Administration of Housing Applications, City Planning, and Group Growth”).
Individuals who indicated that they have been traders in actual property or in any other case have been concerned in actual estate-related monetary companies additionally have been included.
The ensuing checklist of donations from this broadly outlined “developer nexus” mirrored a various variety of stakeholders—not a homogeneous group representing the identical pursuits and supporting the identical candidates.
Nonetheless, the evaluation supplied a device for higher understanding the scope of political engagement by individuals concerned in actual property, land use, and the continued constructing growth that Austin has skilled for a few years.
‘It solely is smart…to need a seat on the desk’
To know the outsized curiosity of the true property sector in Austin politics this yr, we turned to Emily Chenevert, CEO of the Austin Board of Realtors and treasurer of a political motion committee going by the identical title. What explains their involvement? What are they attempting to realize?
She replied by way of a public relations agency, saying, “From zoning instances to constructing laws to signal ordinances and in every single place in between, native authorities performs a major position in how the true property business operates and the way secure our housing market is.”
“It solely is smart for these events to take part in council races and to need a seat on the desk.”
Chenevert’s consultant stated that the Austin Board of Realtors PAC, which sat on a marketing campaign chest of $262,131 as of June 30, “presently (is) within the midst of our candidate vetting course of.” Candidates in search of funds from the PAC should reply a questionnaire and interview with a panel of realtor volunteers.
PAC help can be felt not by way of direct donations to candidates however by way of unbiased expenditures made to help the candidates they endorse or to assault their opponents. As beforehand reported by The Austin Bulldog, PACs spent greater than $726,000 to affect the end result of the 2014 mayor and council elections.
The candidates’ solutions are evaluated in opposition to ABoR’s “Coverage Ideas,” which the consultant stated “prioritize non-public property rights, strategic land use, a secure housing market, and a thriving enterprise neighborhood in Central Texas.”
Translation: the true property group is invested within the end result of a long-running debate over revising Austin’s Land Growth Code (LDC), a course of previously often known as CodeNEXT, now extra blandly simply known as the “LDC Revision.” (ABoR has previously said that it was “deeply concerned within the CodeNEXT course of”).
Broadly talking, the proposed rewrite would upzone components of the town, permitting for denser improvement. That probably would elevate the property values for land house owners—in addition to property taxes—and enhance profitability for the true property enterprise total.
Given this context, we must always count on that marketing campaign donations from builders and different business stakeholders would are likely to circulation to incumbents who help a rewrite of the land code, or newcomers perceived as being more likely to help it.
And that’s precisely what we present in our evaluation of marketing campaign giving this yr. The 2 incumbents who supported the adjustments—Casar and Flannigan—acquired about $51,000 from the business, in comparison with about $10,000 that went to the 2 incumbents who opposed it, Leslie Pool and Alison Alter.
Setback for builders
The stakes on this yr’s council races are excessive as a result of the LDC rewrite already has floundered below two successive councils, regardless of having fun with majority help among the many present council. The Metropolis’s long-running dedication to CodeNEXT is exemplified by the cash spent to additional its objectives. Opticos Design Inc., the Metropolis’s guide for CodeNEXT, by way of July 2019 was paid greater than $7.eight million for its work on the code rewrite.
District Choose Jan Soifer struck down the most recent land code revision in March. She dominated that the town improperly ignored a state regulation permitting property house owners to problem zoning adjustments that have an effect on their properties or close by properties.
The regulation says that a metropolis is simply allowed to disregard such protest rights by a supermajority vote of three-fourths of its governing physique. In Austin, that might imply 9 of 11 council members would wish to move the land code revision once more to keep away from a prolonged strategy of particular person protest hearings. That’s vital as a result of to this point the council is break up 7-Four on the land code revision.
Incumbents who opposed CodeNEXT
If the pro-development camp can widen its majority by two seats, then will probably be capable of move a brand new land code alongside the traces of the one struck down by Choose Soifer.
That may imply defeating Leslie Pool in District 7, whose solely opponent, Morgan Witt, is campaigning to “modernize the land use code.” However Witt didn’t appoint a marketing campaign treasurer till July 1, 2020, and had raised no cash by way of the most recent reporting interval. Pool had greater than $24,000 in money readily available as of June 30, 2020.
It might additionally imply defeating Alison Alter in District 10, who counts actual property dealer Belinda Greene amongst her opponents, in addition to legal professional Pooja Sethi. Greene didn’t appoint a marketing campaign treasurer till August 17, 2020, and gained’t be required to report contributions till 30 days earlier than the election, on October 5. Greene didn’t reply to a voicemail or e-mail asking for touch upon her coverage positions.
Sethi, then again, is sitting on a battle chest of $55,199, of which $5,000 was a private mortgage. Nonetheless, that’s lower than half the $112,871 that Alter had in money readily available June 30. Alter’s private mortgage of $2,500 to her marketing campaign is a debt carried over from her earlier marketing campaign. Solely a small share of Sethi’s donations got here from actual property pursuits, simply three.2 p.c—the bottom share of any candidate who has to this point reported elevating cash.
The District 10 marketing campaign additionally drew three different candidates: Bennett Easton, Robert Thomas and Noel Tristan. All three appointed treasurers after the June 30 report cutoff for reporting contributions.
Thomas ran for District 10 within the 2014 election that established geographic districts for council members. He loaned his marketing campaign $100,000 that yr and positioned third in an eight-person subject with 18.89 p.c and 5,276 votes. He recovered $56,680 of his marketing campaign mortgage and walked away with $43,320 in marketing campaign debt.
Challenger in District 6
A supermajority additionally wouldn’t be potential with out reelecting Jimmy Flannigan, who’s being challenged by Mackenzie Kelly, a critic of the brand new land code. Flannigan had greater than $60,000 in money readily available by way of June 30, 2020, whereas Kelly had barely greater than $18,000.
Kelly received virtually $Four,000 from realtors and builders, lower than a seventh of what Flannigan raised from the business, but it surely accounted for greater than 20 p.c of her fundraising.
Kelly ran for the District 6 seat in 2014, inserting fifth in a six-person subject with eight.98 p.c and 1,382 votes. Flannigan additionally ran in 2014. He received right into a runoff with Don Zimmerman and misplaced, then got here again to beat Zimmerman in 2016 with 55.94 p.c and 15,440 votes.
The District 6 slot drew two different candidates as nicely, Dee Harrison and Jennifer Mushtaler. Each appointed treasurers in August and had raised no cash.
Open seat in District 2
To attain a supermajority, the pro-development camp additionally must maintain on to the seat being vacated by Delia Garza, a significant supporter of the land code revision.
The builders’ favourite within the race seems to be David Chincanchan, whose former boss Renteria voted for the brand new LDC.
Chincanchan’s opponent Veronica Fuentes received 6.5 p.c of her marketing campaign contributions from individuals employed in actual property or associated fields (in comparison with Chincanchan’s share of 27.6 p.c) and most of that was small presents from unbiased realtors or attorneys—not massive donations from huge corporations.
Fuentes and Chincanchan voiced completely different views on the land code throughout an August 20 virtual event moderated by Paul Saldaña, co-founder of the Hispanic Advocates Enterprise Leaders of Austin (HABLA).
Fuentes stated, “Once we’re trying on the Land Growth Code replace, what I wish to ask myself is: Who’re we rising for? Who advantages from these adjustments, and extra importantly, who will get left behind?”
She proposed “a totally funded anti-displacement program and extra anti-gentrification measures adopted into the Land Growth Code replace.”
Chincanchan stated, “Our present Land Growth Code hasn’t modified considerably for the reason that 1980s, and it’s rooted in a segregationist racist plan from 1928.”
“In our neighborhood during the last a number of years…we’ve got seen the impact of gentrification, we’ve got seen displacement, we’ve got seen actual struggling. All of these issues that we need to deal with are taking place below the present Land Growth Code. So we needs to be clamoring for change.”
Section 2-2-53 of the Austin Metropolis Constitution states that no one that is compensated to foyer the town council and who’s required to register with the Metropolis as a lobbyist, and no partner of that individual, could contribute greater than $25 in a marketing campaign interval to an officeholder or candidate for mayor or metropolis council, or to a selected objective PAC concerned within the election for mayor or metropolis council.
The $25 limitation on lobbyist contributions doesn’t apply to others employed in the identical firm because the lobbyist. Our evaluation reveals that attorneys employed by regulation corporations that foyer the town council on behalf of developer purchasers donated closely.
The foremost instance of that observe is Armbrust & Brown PLLC, the largest Austin-based agency by way of political giving by its staff. The agency payments itself as having “specific experience in complicated actual property transactions, building, and improvement,” in response to its web site.
Its purchasers embrace property house owners, builders, investor teams, property managers, and monetary establishments with actual property pursuits.
Eighteen of Armbrust’s 29 attorneys gave to a number of native candidate to this point this yr, for a complete of $22,725. Almost all of those legal professionals gave $400, the utmost allowed below the Metropolis Constitution, with married staff’ spouses usually additionally giving $400 every.
Founding associate David Armbrust and two fellow attorneys—Michael Whellan and Richard Suttle—have been the one ones who restricted themselves to the $25 most that registered lobbyists are allowed to donate below the Metropolis Code.
In different phrases, senior companions on the agency registered as lobbyists and complied with the resultant $25 restrict, whereas extra junior attorneys and their spouses donated to the max. David Armbrust didn’t reply to a request for remark.
The sample of giving at Armbrust & Brown was uniform and unmistakable: all however one donation from staff—52 of 53 whole donations—went to only three council candidates: Greg Casar, Jimmy Flannigan, and David Chincanchan.
What’s a lobbyist?
The giving tradition at Armbrust & Brown is sharply completely different from that of different regulation corporations within the space, whose staff didn’t uniformly give to sure candidates.
For instance, solely 5 staff of Husch Blackwell LLP, a agency with 64 Austin attorneys, in response to data compiled by the Austin Enterprise Journal that’s out there solely to subscribers, gave to native candidates, and every of them gave $25.
Legal professional Stephen Drenner of the Drenner Group, together with three colleagues and the partner of a colleague, every gave $25 to 5 completely different council candidates.
In all, Drenner Group contributions totaled simply $300—in comparison with $22,725 donated by Armbrust & Brown attorneys. The Drenner Group staff who donated all are registered as lobbyists specializing in land points.
These completely different giving practices elevate a query: How do regulation corporations make the choice to register sure attorneys or workers as lobbyists, however not others?
Some corporations take a conservative strategy, erring on the facet of over-disclosure. One legal professional at Husch Blackwell, Micah King, instructed the Bulldog that he was registered to symbolize an engineering agency despite the fact that he had “by no means heard of it.”
An assistant had filed the disclosure type, he defined, and “thought that I had completed some lobbying for that engineering agency.”
In case he was pulled into work for that shopper, it was higher to “err on the facet of inclusion to make sure compliance and transparency,” the legal professional famous.
The Drenner Group’s founding principal, Stephen Drenner, didn’t reply to a request to touch upon how his agency makes the choice to register sure attorneys or workers as lobbyists.
Drenner Group identifies itself as a “an actual property boutique regulation agency that makes a speciality of land use, entitlement points and incentive requests.”
Chapter 4-8 of the Austin City Code defines lobbyist to imply an individual who communicates immediately with a metropolis official “to affect or persuade the Metropolis official to…take motion or chorus from taking motion on a municipal query.”
It defines “municipal query” to incorporate potential actions pending earlier than the council, however not “routine, non-appealable selections on allowing, platting, and design approval issues in reference to a selected challenge or improvement.”
So a lawyer lobbying the council usually in help of a brand new land code can be required to register as a lobbyist, and can be restricted to a $25 donation, however a lawyer lobbying for a single zoning change wouldn’t should register.
Moreover the Land Growth Code, one other key problem might be on the poll this November. Undertaking Join is a mass transit plan supposed to ease Austin’s visitors snarls. Critics say it imposes a further property tax burden that residents can’t afford.
Some builders and business teams plan to again the measure by way of political motion committees. For instance, the Austin Board of Realtors PAC gave $25,000 by way of the Austin Group Basis to help Transit for Austin, in response to a July 15 marketing campaign finance report.
Requested for extra particulars about this, ABoR instructed the Bulldog, “These funds have been devoted to Transit for Austin as a dedication to exploring how a mass transit funding may benefit our neighborhood forward of the precise design of Undertaking Join.”
Not all actual property are going to the identical causes. Our Mobility Our Future, a PAC opposing Undertaking Join, raised $24,000 from John Lewis, an actual property investor.
The majority of donations in help of the transit plan most likely haven’t been made, as a result of the council didn’t vote to place the measure on the poll till August 13—six weeks after the June 30 cutoff for marketing campaign finance disclosures.
If authorized by voters, Undertaking Join may increase improvement alongside the brand new mild rail corridors, together with what some builders name “transit-oriented improvement.” For instance, New York-based actual property funding agency MSquared not too long ago revealed it was scouting spots in Austin for a seven to 9 story blended use challenge containing 100-200 flats.
Alicia Glen, MSquared’s managing principal, instructed culturemap Austin that the agency would have a look at websites alongside transit corridors if voters authorized Undertaking Join.
The Austin Chamber of Commerce and the Actual Property Council of Austin printed a joint resolution in help of Undertaking Join August 26, calling for “further housing and density alongside the Transit Precedence Community corridors…together with an emphasis on transit-oriented improvement, transit-oriented communities, and transit-based zoning.”