The overview
The Austin Housing Finance Corp., the strategic nonprofit overseen by City Council, on June 27 announced the purchase of a series of existing multifamily properties. The update came after council members first signed off on the housing portfolio acquisition in late 2022.
The purchase includes an office and seven separate apartment complexes in Hyde Park and Brentwood each home to between 10 and 109 units. Overall, the grouping features a combined 234 apartments.
"This portfolio of properties demonstrates our commitment to preserving existing affordable—subsidized and naturally occurring—multifamily housing," Housing Department Director Rosie Truelove said in a statement.
The units are the first that the AHFC has bought in council districts 7 and 9, which cover much of Central and North Central Austin including downtown. The apartments are all located near the first proposed extension of the Project Connect light rail line.
The acquisition was made in partnership with the nonprofit Affordable Central Texas for $34.9 million in total, $14.9 million of which was funded by the AHFC through 2018 housing bond dollars.
“We are excited to continue to partner with AHFC to expand and preserve low and moderate-income rental housing in Austin,” ACT President Monica Medina said. “Acquiring smaller properties close to transit, schools and local amenities near Central Austin is vital to meeting the housing needs of essential Austinites.”
The details
Following the city-backed purchase, all of the included properties will be repaired and renovated over the next two years. The city said it will spend $2 million on those improvements for residents, funded as part of the AHFC and ACT's purchase financing.
Current tenants at the apartments will remain in place through the transition, and the city said The Tipton Group will handle property management and marketing for any vacant units going forward.
Council's December 2022 vote for the proposed acquisition accounted for two more complexes with three dozen apartments between them. However, those properties—located at 1037 E. 44th St. and 1100 E. 32nd St.—weren't featured in the final deal announced in June.
"The seller removed both properties from the portfolio before closing," Housing Department spokesperson Kasi Jackson said in an email.
The big picture
The acquisitions are the latest in an ongoing series of land deals and development support funded by the AHFC as part of the city's work with affordable housing. Through the AHFC, council most recently voted to spend millions in 2022 housing bond dollars on several more projects around Austin.
Affordable housing in Austin is based on local income levels with homes or apartments reserved for those earning a percentage of the regional median family income, or MFI. Austin's MFI has been increasing for years and now sits at $122,300 for a four-person household.
A majority of the newly purchased apartments will be targeted toward those who make below 80% MFI, including a selection available at 50% MFI or less. That more deeply affordable level is described by the Department of Housing and Urban Development as "very low income," and units in that bracket are often more difficult to build or fund given the need for increased subsidies.
Overall, 57% of the new units will be affordable in the 50%-60% MFI range, 35% will be available for 80%-120% MFI earners, and 8% will be rented at market rates.
While all the units will initially be for rent, some may eventually end up as affordable for-sale condominiums down the road.
"[I]n time ACT and AHFC do want to explore converting some of the properties to affordable Community Land Trust (CLT) ownership units, which would include outreach to the existing tenants of those units," Jackson said.
The city said buying the apartment portfolio furthers several of its housing objectives—maintaining existing affordable housing, spreading affordable units across town, offering spaces for lower-income residents—as Austin remains well behind its decade-long affordable housing goals overall.
