Austin will have to wait a little longer before moving forward with a second hotel/motel purchase to house the homeless after City Council said it would pause its pursuit of a 71-room hotel near the airport because of a zoning issue.

To more rapidly address its homelessness challenges, the city has teamed up with the Ending Community Homelessness Coalition to purchase hotels and motels for conversion into low-barrier homeless shelters. After greenlighting negotiations for the Rodeway Inn at 2711 S. I-35 on Nov. 14, the city set its eyes on the 71-room Microtel Inn and Suites at 7705 Metro Center Drive in Southeast Austin.

Instead of directing staff to negotiate the $6.8 million purchase of the hotel, City Council announced it was pausing its plans for the hotel. City staff and others close to the issue said the problem was zoning related and due to the hotel’s proximity to the airport.

The hotel is situated in the airport overlay, a zoning category that prohibits all residential uses in the area, according to the city code. Although the overlay allows for hotels and transitional housing, the restriction on residential uses is problematic for the city’s future plans with its hotel shelters, ECHO board member Mark Littlefield said.

City staff, Austin City Council and members of ECHO have said down the line, they plan to convert the homeless shelters into permanent supportive housing—deeply subsidized housing with services reserved for those who have difficulty finding homes. Littlefield said although a shelter may have worked, the city would not have been able to convert the project into permanent housing.

“Council was ready to approve but the airport overlay was a red light,” Littlefield told Community Impact Newspaper in a text message. “Good news is that city staff and ECHO worked overtime the past few days education and answering council questions. [The] next hotel will be easier to get done ... I think.”

City spokesperson David Green said City Council’s delay does not mean the deal is over. Rather, the city’s legal team, he said, is working on interpreting the restrictions. Littlefield said he is sure the city and ECHO will try to find workarounds, but ECHO is in the process of vetting other hotels.

Talking to reporters Dec. 10, Mayor Steve Adler said he did not want to go into detail over the airport overlay issue. However, he said there is an urgency around the hotel/motel strategy, and City Council will likely be holding special-called meetings in January to move forward with more hotel/motel purchases. Adler said the goal is to bring on 300 hotel/motel rooms onto its homeless shelter roster.

Although City Council greenlit negotiations on the Rodeway Inn in November, Adler and city staff said the purchase has not been finalized yet. In a presentation to City Council on Dec. 10, Assistant City Manager Rodney Gonzales, who is leading the city’s homelessness efforts, said the operation and maintenance of these hotel/motels will be funded through philanthropic channels headed by ECHO.

Gonzales said the city would hold off on a making a third hotel/motel purchase until ECHO hit 25% of its $6 million fundraising goal, equal to $1.5 million. Gonzales said there is not a timeline associated with the fundraising goals, and the city will act as goals were met.