What does a lemonade stand have to do with the affordability crisis in Austin? It could help trace the root of the city’s rapidly growing disaster.
The city has become far too expensive for many people to afford. This is well-known. In a previous report, Texas Scorecard detailed how the city’s policies on taxes and fees are forcing residents out of their homes.
To illustrate just how these policies have caused this disaster, here’s a quick story.
Imagine you want to open a lemonade stand in your Austin neighborhood. You gather all the ingredients and supplies, prepare the lemonade, and set everything up at a table on the street corner. You put out a sign that reads “50 cents per glass,” and you’re ready to go.
Your first customer walks up and happens to be an official from the city. He points out how your table doesn’t meet height and width requirements, and that your cups are not the correct type of material. Once you fix those problems, you can open for business.
You buy the larger table and the more expensive cups, and set everything up again. This time your sign advertises 65 cents per glass, to make up the extra money you had to spend complying with the regulations.
As you’re serving customers, the city official returns and says there’s new requirements you’re now violating. You need to have separate tables: one for the lemonade, one for the straws and cups, and one for the cash register. After completing that, you also must pay for a city inspector to come review everything.
You purchase the additional tables and pay for the inspector. Everything is approved, but now you must raise the price to $1 per glass because of all the extra costs.
One last time, the city official comes to your stand. You’re informed that there are even more new requirements. You must now use a brand-new pitcher after every three glasses you pour; you must pay the city a tax for every cup used; you must pay a fine if there are more than five people waiting in line; and you must again pay for a city inspector to come review all the new requirements.
You purchase boxes of pitchers, pay all the fees, and pay for the inspector. Now you have to raise the price to $1.50 per glass.
Unfortunately, this is not the end. Once you’ve met all of those requirements and paid all the excessive costs, the city official then informs you that you will now be taxed every year for the street corner your lemonade stand occupies. And every year, that tax will increase.
You can guess what that will do to the price per glass.
What was once 50 cents is now close to $2. As a customer, that kind of increase is surprising, maybe upsetting, but some might still pay it.
Try that on the price of a house.
This scenario is exactly what’s currently happening in Austin. The city is plundering home and business developers with endless and needless regulations. It’s causing prices to skyrocket, and hurting customers and residents the most.
The city council must stop these policies. Otherwise, as they continue to add fees, regulations, and raise taxes, the same consequences will only worsen.
Not many Austinites will be able to afford that.