Highlights, [bracketed comments] and related articles added

The Austin division of the U.S. District Court for the Western District has ruled that the city of Kyle did not violate the Fair Housing Act, nor did it raise building permit fees to retaliate against the Home Builders Association of Greater Austin, both allegations from the HBA.

The ruling, handed down on March 30, ends more than three years of legal battle that began in November 2005 when the HBA, National Association of Home Builders and the National Association for the Advancement of Colored People filed a suit against the city 20 miles south of Austin. The suit alleged that a revised zoning ordinance unfairly raised home prices and forced minority buyers out of the market.

The HBA also took issue when the city raised its residential building permit fees by more than 25 percent in anticipation of the lawsuit and its potential price tag. That move was potentially illegal, HBA executives said at the time, because Texas law says city fees should be proportional to the cost of service.

Austin Business Journal, 04/02/2009
Source: http://austin.bizjournals.com/austin/stories/2009/03/30/daily44.html

[HOT: We include this series of articles to show a pattern of volume builders (and associations representing them).]

Pflugerville changes standards for homes

Builders' group says codes may be illegal

by Jenny Robertson (jarobertson@bizjournals.com, 512-494-2523), Austin Business Journal, 1/13/2006
http://austin.bizjournals.com/austin/stories/2006/01/16/story5.html

Residential building requirements approved by the City of Pflugerville have raised the hackles of a local homebuilders group already engaged in a court fight against another Central Texas suburb over similar issues.

The Home Builders Association of Greater Austin says the design standards might price minorities out of Pflugerville's housing market, which could violate the federal Fair Housing Act. In a lawsuit filed against the City of Kyle in November, the association cited the same concerns.

Specifically, the group protests rules that would require front-yard sprinklers and a 100-square-foot, covered back patio on new homes in Pflugerville. The association also criticizes new landscaping and architectural standards.

"Should the city be in the business of mandating ... covered patios?" asks Harry Savio, executive vice president of the association. "What does that have to do with the health, safety and welfare of a community?"

Savio says an estimate by one of the association's members suggested the requirements could add $21,000 to the price of a house. If that increase disproportionately affects minority homebuyers, it could violate federal laws that prohibit discrimination in housing-related transactions, Savio says.

[HOT: $21,000? That obsurd is at least 3 times too high. Maybe the builders are just upset that these are two options they can't charge high-margin fees for.]

Pflugerville Mayor Cat Callen says the codes were drafted by a committee comprising representatives of homebuilders, neighborhoods, the City Council, and the Planning and Zoning Commission. The council gave initial approval to the codes at its Jan. 10 meeting.

Callen says the rules do not violate fair housing because they don't mandate minimum housing sizes or costs. Plus, she says, they provide more housing flexibility.

"We were actually trying to make it easier for homebuilders to come to Pflugerville and offer more diversity," Callen says.

Although the Home Builders Association hasn't threatened to file suit against Pflugerville, the group is in a legal joust with the City of Kyle. The National Association of Home Builders and the National Association for the Advancement of Colored People joined the local association in the Kyle suit.

The suit centers on Kyle zoning ordinances passed about two years ago, including increased minimum lot sizes, masonry requirements and landscaping rules. The plaintiffs want the U.S. District Court in Austin to invalidate the zoning ordinances and to prohibit Kyle from enforcing similar laws.

Home Builders file suit against City of Kyle

Austin Business Journal, 11/29/2005
http://austin.bizjournals.com/austin/stories/2005/11/28/daily8.html

The Home Builders Association of Greater Austin has filed suit against the City of Kyle alleging that the city's zoning ordinances unfairly raise home prices and force minority buyers out of the market.

The suit was filed Nov. 22 in the Austin division of U.S. District Court. The National Association for the Advancement of Colored People and the National Association of Home Builders joined the local association in its complaint.

Harry Savio, executive vice president of the local home builders association, referred comment to attorneys representing the group and the NAACP. Those attorneys could not immediately be reached.

The complaint asks the court to declare the zoning ordinances invalid and to enter a permanent injunction against Kyle from enforcing similar laws.

The disagreement stems from zoning ordinances passed by Kyle about two years ago. Specifically, the association cites the city's increased minimum lot size, masonry requirements and landscaping stipulations as measures that increase housing prices.

The group says the higher costs violate the Fair Housing Act, which prohibits discrimination in housing-related transactions.

Michael Klein, an Austin-based lawyer representing the National Association of Home Builders, says he expects the city to file a response in about 20 days.

Klein says his clients have not alleged that the city intentionally discriminated against minorities. But he adds that, under the Fair Housing Act, even unintentional discrimination is unlawful.

"Even if a city says they want [zoning laws] for aesthetic purposes -- we want a nicer, cleaner, better-looking city -- you need to thinkg about what they're really saying," Klein says. "What they're really saying is they want to keep out lower income residences.

"It's a fine line between whether it's intentional or not."

Tom Mattis, Kyle's city manager, says he can't comment on specifics of the suit, but calls the claims "completely unfounded and borderline frivolous."

"If their claims were valid, I think it would bring into question some of the most basic enforcement of zoning laws," Mattis says.

In October, Kyle raised its residential building permit fees by more than 25 percent, a move the city says will help fill its coffers in anticipation of what it expects to be a pricey lawsuit. City officials estimated at the time that the suit could cost $250,000 to defend.

When the zoning requirements were passed, the city grandfathered about 10,000 homes under the old zoning regulations, Mattis says. No new homes have yet to be built under the new guidelines in Kyle, he adds.

Homebuilders decry Kyle's permit fee hike

City says possible lawsuit creates need

by Jenny Robertson Austin Business Journal, 11/04/2005
http://austin.bizjournals.com/austin/stories/2005/11/07/story5.html

An ongoing disagreement between the City of Kyle and a group representing local homebuilders has taken a somewhat ironic twist.

Last month, Kyle raised its residential building permit fees by more than 25 percent, a move the city says will help fill its coffers in anticipation of what could be a pricey lawsuit threatened by the Home Builders Association of Greater Austin.

For its part, the association has considered suing Kyle over the city's zoning laws, which the group says drive up home costs and push low-income buyers -- particularly minorities -- out of the market.

The average building permit for a single-family home cost about $713 last year, says Tom Mattis, Kyle's city manager. Under the new fee structure, the average permit will cost about $900.

Mattis says the city made a commitment to its residents several years ago to ensure they wouldn't bear the costs for future development. Fees were set to cover services necessary for housing, such as building inspections.

When examining costs for next year, the city included the potential price of legal defense against the association's lawsuit, he says.

"It's very expensive litigation," Mattis says. "We expect the cost to be in the neighborhood of $250,000 to defend ourselves, which we fully intend to do."

But Harry Savio, executive vice president of the Home Builders Association, says the fee increase itself might be illegal because it will go toward litigation and not toward building inspections. Case law in Texas has established that city fees should be roughly proportional to the cost of service, he says, to prevent municipalities from profiting from fees.

In a September letter to city officials, Savio said the increased fees will serve as a barrier to affordable housing.

"The big losers will be the people you need to run your city, like teachers, firemen, police officers and so on," he wrote.

The city and the association have sparred over zoning ordinances passed about two years ago. Specifically, the association cites the city's increased minimum lot size, masonry requirements and landscaping stipulations as measures that increase housing prices.

Savio says the higher costs violate the Fair Housing Act, which prohibits discrimination in housing-related transactions. But Mattis called that "a ridiculous claim."

"It goes right to the heart of every city's ability to regulate any kind of development," he says.

From January 2002 through the end of 2005, Kyle will have issued more than 4,000 single family residence permits, Mattis says. Peter French, president of the Kyle Chamber of Commerce & Visitors Bureau and a developer in the Plum Creek subdivision, says the rise in permit fees won't affect those numbers.

"I don't really see any serious negative consequence of bumping this fee," French says. "It's a pretty insignificant amount of money compared to the purchase price of the home or the lot."

Mattis says the city's homebuilders never raised complaints over the zoning changes.

"We invited them to the table, and many came and gave their input," he says.

But Savio says developers might feel pressured to keep quiet.

"It's hard to be in a regulatory environment -- where people have significant control over your ability to do business -- and be extremely critical," he says.

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