Editor's note: This story has been updated to include a comment from Caritas of Austin.

Tens of millions of dollars in state funding could be used to expand Austin's homeless shelter system, representing a significant infusion in the local push to boost shelter capacity as the city contends with a widening gap in resources for those in need.

What happened

Nearly $60 million for shelter development in Austin was set aside by the Texas Department of Housing and Community Affairs board on July 27. Many details have yet to be finalized, but the funding could eventually be used for a partnership led by The Other Ones Foundation and the Downtown Austin Alliance to create more spaces for those experiencing homelessness across the Austin community.

The multimillion funding plan from the TDHCA's HOME-American Rescue Plan Act allocation—federal relief funds reserved for homelessness and housing stabilization—came together in part through collaboration between Gov. Greg Abbott and Austin Mayor Kirk Watson.

The update comes as Austin officials are working to cement shelter options for the thousands of people living without shelter in the area.

Recent updates from the city include a $9.14 million plan to stand up a 300-bed temporary shelter on the east side, the reopening of a downtown shelter formerly operated by The Salvation Army and doubling up capacity at two city-owned shelters linked to Austin's encampment clearing program.

In his July 27 newsletter, Watson said the update could lead to the creation of up to 700 new shelter beds.

"The creation of more permanent supportive housing remains an important long-term goal, but progress is incremental and slow. ​​While we work toward that goal, our unhoused neighbors need shelter now, and we need to follow the law regarding camping," Watson wrote. "Securing the state investment complements recent city investments at the [Austin Convention Center] Marshalling Yard and what used to be the Salvation Army as well as two bridge shelters that are part of the City’s HEAL initiative."

The details

TDHCA officials voted to:
  • Reserve up to $56.51 million for developing shelter "in one or more locations" in the Austin area through an initiative led by TOOF and the Downtown Alliance
  • Award $3.32 million to both groups for related capacity building and operations, pending further negotiations
The state funding was set aside for areas with higher, rapidly rising local rent costs and with larger homeless populations needing more shelter. The Austin area qualified for those benchmarks.

As the TDHCA-backed process moves forward, TOOF and the Downtown Alliance would be tasked with finalizing a plan for shelter development over the coming months. A TOOF spokesperson said the plan will come together based on community needs and stakeholder feedback, particularly from those experiencing homelessness.

TOOF offers homeless assistance, job programs and case management, and since 2020 has managed the Esperanza Community off US 183. That complex on state-owned land accommodates dozens of residents in a growing transitional shelter community.

The Downtown Alliance plans and advocates for issues relevant to downtown property owners, such as transportation, economic development and public safety, including homelessness.

Quotes of note

“In order for our community to achieve housing equilibrium, we must increase access to supportive and deeply affordable permanent housing options, but also dignified and low-barrier shelter. We are grateful to Mayor Watson and the state for working together to bring much needed funding into our community’s homeless response system to accomplish both," TOOF Executive Director Chris Baker said in a statement. "The most important thing is that these new resources are stewarded by our community and used in response to what our community needs. That’s why all of TOOF’s programming is designed in partnership with a variety of community stakeholders—most importantly, those who are unhoused."

"The city is in dire need of additional shelter beds, as identified by the homelessness strategy office, with the current capacity at only one bed for every five people in need," Dewitt Peart, president and CEO of the Downtown Austin Alliance, said in a statement. “We applaud Mayor Watson, TDHCA and the Governor’s office for working together to provide much-needed funding to address homelessness in Austin. We look forward to partnering with TOOF in the mission to create additional non-congregate shelter in Austin using their innovative work at the Esperanza Community as a model."

Also on the agenda

In addition to the shelter planning, TDHCA officials voted to send about $5 million more to local homeless nonprofits LifeWorks and Caritas of Austin to help low-income Austinites stabilize their housing situations. That work would be backed by federal Emergency Rental Assistance funds.

“Through this collaborative partnership with the city and state, we continue to champion the belief that every young person in our community deserves a safe and secure path in pursuit of a life they are going to love,” LifeWorks CEO Susan McDowell said in Watson's newsletter.

Cate Tracz, the TDHCA's director of ERA housing stability services, said the move will help with programs like Caritas' financial assistance options for vulnerable and low-income clients, and support more staff working directly with those households on topics such as health care and education.

“Caritas of Austin has been committed to improving the lives of people experiencing homelessness for nearly six decades, and we are thrilled to receive this significant financial support for client services. The funds made available by the Texas Department of Housing and Community Affairs will provide critical housing stability assistance to more of our unhoused neighbors,” Caritas President and CEO Jo Kathryn Quinn said in a statement. “Pairing an expansion of shelter availability and permanent housing stability resources, creates a more sustainable homeless response system, to benefit all Austinites. Eliminating homelessness requires employing multiple strategies. Specifically, this funding will facilitate our clients’ transition from shelter to permanent housing; allowing them to build well-being and reach their full potential.”

Separately, the TDHCA board sent hundreds of thousands of dollars directly to Austin for homeless services as part of annual state allocations to large Texas cities previously authorized by state lawmakers. Those awards for homeless housing and related services total $860,465.