Longtime businesses see fewer regular customers

With Austin property values increasing by more than 14 percent this year compared with last year's values, business owners such as Jesse and Kevin Carpenter find themselves having to move beyond the heart of the city, similar to many homeowners who can no longer afford to live in Central Austin.

The Carpenters, who own The Omelettry on Burnet Road, announced in March they were being forced to move their restaurant this October to the Concorde Center at 4631 Airport Blvd.

The Omelettry has been on Burnet Road for 36 years, but in February the property owners decided against renewing its lease.

"Every time our lease was up, we would offer over market value to buy it because we wanted to secure that location," Jesse Carpenter said. "[The property owners] never wanted to sell."

Once the property was for sale, Jesse Carpenter said, the real estate boom skyrocketed its value.

"The Austin real estate market went crazy," he said. "In the past three years, the place doubled—maybe tripled—in value."

According to the Travis Central Appraisal District, The Omelettry's property value increased 40.86 percent this year.

Property value increases have been a trend for Austin in recent years. In 2013, the average residential market value in Travis County rose 4.9 percent from $270,805 to $284,149. The taxable value of the average Travis County home experienced a similar increase of 3.9 percent, from $214,176 to $222,486.

Escalations this year, however, were far steeper. The average Travis County property owner saw a jump of more than 12 percent in market value—the amount of property would sell for in the open market—to $320,032. The average taxable value—the amount taxed upon—went up nearly 8 percent to $240,139.

Bruce Elfant, Travis County tax assessor-collector, said because property sale prices are not disclosed in Texas, it makes the appraisal process more difficult.

"There's nothing more indicative of what fair market value is than what it sells for," Elfant said.

Residents and businesses alike had until June 2 to protest appraisals. Commercial businesses are more likely to succeed because of their legal resources, and residents are less likely to afford tax attorneys, Elfant said.

That is why Austin resident and Travis County Senior Planner Melissa Zone helped her neighbors protest their appraisals.

"We do it because there's no one to help them. There's no resources," said Zone, who is running for Austin City Council.

TCAD Chief Appraiser Marya Crigler said growing values were prompted by growth in construction and a strong apartment sector. Her office is expected to receive the same number of appraisal protests, approximately 78,000, as last year, Crigler said. Most appeals are resolved by late July, according to the TCAD.

Zone said she has seen neighbors relocate because they have been getting priced out of the area, making them move farther away and commute greater distances—thus contributing to sprawl.

"Our requirement is to appraise at market value," Crigler said. "The question of affordability is something that has to be addressed with the local governments."

The real estate boom also affects the customer base of neighborhood businesses such as The Omelettry and Vulcan Videos on North Loop Boulevard.

"As [the taxes] have gone up, that has changed our customer base because you have neighbors getting $13,000 a year property tax bills, and they can't afford to live there," said Kristen Ellisor, Vulcan Video general manager. "It'll be six months all of a sudden when we used to see them every week."

That's one of the reasons Vulcan Videos moved its Guadalupe Street store to North Loop Boulevard, Ellisor said.

"We definitely saw the campus area change," she said. "I know that we lost some customers through the rotation of students, but it's also that houses and smaller things were being replaced with giant things."

As local businesses move out, Central Austin residents have fewer locally owned businesses to choose from, Zone said.

"Those businesses are going, and we're having a harder time finding them," she said.

Still, there is a silver lining that comes with relocation. The Omelettry will be able to accept credit cards, have a bigger kitchen and relocate closer to its customer base, Jesse Carpenter said.

"A lot of regulars jokingly say, 'We got priced out of this neighborhood years ago.' I'd say two out of three customers would be closer to where we move," he said.