Austin City Council approves a 5-cent Tax Rate Election to be on November Ballot.

After extensive debate, the Austin City Council approved a 5-cent tax rate election (TRE) for the November ballot.

This decision followed significant community input and advocacy efforts from the Austin Apartment Association (AAA) and other business groups urging fiscal restraint. Mayor Watson, who initially proposed a 3.5-cent increase, ultimately supported the 5-cent compromise but stated he would not go any higher.

AAA’s Advocacy Efforts

In meetings with nearly every council member, AAA highlighted the severe financial pressures on the multifamily housing industry. We emphasized that operators are facing a challenging market with:

• Historically low occupancy at 85%, a stark contrast to the typical 95-97%.

• Soaring insurance rates and mortgage costs.

• Low and even sometimes negative net operating revenue.

On behalf of our members, AAA submitted a letter asking the council to approve the lowest tax rate possible. Knowing that the council was determined to approve a tax rate election of some kind, we chose to advocate for the lowest possible rate.

“We are calling on the Austin City Council to emphasize financial restraint and call for the lowest possible tax rate election. We encourage you to prioritize financial prudence.

While homeowners can claim a homestead exemption and receive some tax relief, there is no comparable benefit for multifamily properties or the renters living in them.

These tax increases on multifamily housing will raise the cost of living in the coming years and undermine the City Council's progress in increasing housing supply and positively affecting housing affordability over the past three years.”

- Letter from AAA to Mayor and City Council 

Our message was similarly echoed by the Austin Board of Realtors, RECA, the Austin Chamber of Commerce, and Opportunity Austin.

Over 400 members of the public signed up to speak on the proposed tax rate election.

AAA Advocacy Committee member and vice president of the North Austin Civic Association (NACA), Allen Vaughn, spoke at the hearing, stressing that tax hikes ultimately harm residents.

“The proposed rate increases will do harm to the very people that the council professes they want to help, Focus on the fundamentals and significantly reduce discretionary spending that produce little to no results.

Over the past couple of years, we faced a challenging rental market with declining rents, increased delinquencies, and higher turnover. Despite these headwinds, we remain committed to providing high-quality, affordable housing and work tirelessly to maintain occupancy and manage expenses.”

- Allen Vaughn, AAA Advocacy Committee Member and NACA Vice President 

If the TRE Fails

If voters reject the TRE in November, the Council will face the difficult task of cutting the adopted budget. City Manager Broadnax and financial staff are already preparing for this possibility.

In that case, the Council would decide how to reduce the adopted budget in a fair, responsible way.

Progress on Development Fee Review

Separately, AAA supported a successful resolution from Council Member Chito Vela. This directs the City Manager to review all development and permitting fees with a new stakeholder group. The goal is to analyze the impact of full cost recovery and recommend changes to the fee structure, a key issue for our industry. Full Resolution Here

As we have previously reported, the fees for development services have increased exponentially. This is because the department is an enterprise fund, and the costs are associated with the construction and permitting process.

AAA will continue to engage with elected officials as the process unfolds and will monitor the pending Tax Rate Election and any City of Austin FY25-26 budget implications. 

Read more of our budget coverage:

• Austin Apartment Association Calls for Reconsideration of Proposed City Budget Fees - Austin Apartment Association (8/8/2025)
• Advocating for the Multifamily Housing Industry – City of Austin FY 25-26 Budget - Austin Apartment Association (7/24/2025)
• City of Austin Proposed Tax Rate Election Effect on Multifamily Rental Properties - Austin Apartment Association (7/18/2025)