The program is funded through the U.S. Treasury Department and is overseen by the IRS. The goal is to use private dollars to create affordable housing.[/caption]

The city’s Imagine Austin comprehensive plan outlines a concept of complete communities with a mixture of housing attainable for all income levels.

It is a vision Mandy De Mayo works to fulfill as executive director of HousingWorks Austin, an affordable housing research, education and advocacy group. One of the organization’s core values is ensuring access to opportunity, whether it be housing, education or economic. But west of MoPac in Northwest Austin, only five properties offer subsidized low-income housing, two of which have a combined 27 units set up for individuals with disabilities.

“When opportunity is closed off then [lower-income residents] don’t get to experience schools in District 6 or connect to educational opportunities or connect to jobs,” De Mayo said.

More opportunity for low-income housing is coming to Northwest Austin in 2015 through the housing tax credit program. Two subsidized housing developments are undergoing or nearing the start of construction, and four developments submitted to this year’s program are proposed for Northwest Austin, three of which are in District 6.

Subsidized vs. affordable

Compared with Northwest Austin, North Austin has a plethora of subsidized
low-income housing available. However, four Northwest Austin projects
are being considered for housing tax credits and two others are under
construction or will be soon, further opening the door to access to affordable
housing in the area.[/caption]

Subsidized housing differs from affordable housing in that subsidized projects use government assistance, such as housing tax credits. These credits are part of a federal program created through the U.S. Treasury Department to use private investment dollars to create affordable housing, said Gordon Anderson, senior communications adviser at the Texas Department of Housing and Community Affairs, which oversees the state’s housing tax credit program.

The process begins when a developer applies for the tax credits through the TDHCA. Applications for 2015 closed Feb. 27, and the TDHCA governing board will award credits in July. A developer will then sell credits to an investment partner who provides capital in exchange for equity in the project. Investors receive a dollar-for-dollar reduction on federal tax bills for 10 years during the lifetime of the credits.

Developers are able to cover 70 percent of low-income housing construction costs through the tax credit program. Anderson said funding construction through credits allows a developer to offer rent at less than market value. Tenants earning up to 60 percent of the area median family income are eligible to live in properties built using credits.

“Credits help make it financially feasible to allow the property to get cash flow but offer rents to fit federal guidelines,” he said.

Texas is split into 13 regions to allocate tax credits, and each region is further broken to rural and urban areas. Anderson said this allows the TDHCA to equitably disperse credits. However, Roland Broussard, vice president of Austin-based Realtex Development, said it has been difficult to secure tax credits in the Austin area because of how the state decides to allocate funding.

“[Allocation] is structured differently year to year, and Austin doesn’t score well,” he said. “We clearly see the need for affordable housing, and we have attempted many times to do a deal in Austin and it didn’t score well because of proximity or high cost of land and opposition [from a nearby neighborhood].”

During its Feb. 12 meeting City Council voted to provide loans using the 2013 housing bond funds for six proposed subsidized housing properties and submit letters of support for each development’s tax credit application to the TDHCA.

District 6 Councilman Don Zimmerman voted against the three projects in his district—Cardinal Point Apartments, Azul 620 and Monarch at Lakeline Station. Although Zimmerman supports affordable housing, he said he is against subsidizing development because such properties are not on the tax roll, resulting in higher taxes for nearby residents to sustain the additional burden on roads and other city services.

“Subsidized housing is unaffordable because it’s based on unsustainable taxation and government subsidies,” he said.

Instead, Zimmerman said the city should focus on reforming existing ordinances, reducing regulation and revamping management in the permitting department to make housing development more affordable.

“You could have market-affordable housing, small apartments and condos that people could buy without subsidies,” he said.

Opening access

This fall, Windy Ridge, the first of two low-income developments under or nearing the start of construction in Northwest Austin, will open. Affordable housing provider Foundation Communities will break ground this summer on a second site called Lakeline Station.

Realtex, in partnership with Generation Housing Development, broke ground in October on Windy Ridge. The property secured housing tax credits in 2013 and will have 120 units with one- through three-bedroom options. Amenities include a clubhouse, pool, dog park, covered parking and energy-efficient appliances.

“Realtex has a reputation of building the highest-quality product out there,” Broussard said. “You would think it’s a conventional property. We don’t compromise on quality just because of income restrictions.”

One of the four Northwest Austin–area projects submitted in 2015 for housing tax credits is Cardinal Point Apartments. It would provide 120 units. Walter Moreau, executive director of Foundation Communities, said Cardinal Point would offer rents between $600 and $700 per month. Market-rate rents in the Four Points area range from $848–$2,299.

With about 500 lower-wage jobs located within a half-mile of Cardinal Point, Moreau said residents could walk to H-E-B, Target and Walgreens. He estimates most residents will work with within 2 miles of the property.

“We believe there should be affordable opportunities in all parts of town,” he said. “Affordable housing is really limited in Northwest Austin.”

Residents from the nearby River Place neighborhood opposed the project because they believe it will increase traffic congestion and overcrowd schools. But Zimmerman does not buy the traffic argument.

“It’s not possible anymore to target a particular development or project and oppose that on the grounds of traffic congestion because the entire city is congested,” he said. “If you’re going to bring that principled rationale, no one is allowed to build anything anywhere for that reason.”

De Mayo said multifamily housing also contributes lower amounts of traffic than single-family homes or commercial developments. People who would qualify to live at Cardinal Point likely already work in the area and need housing closer to work, she said.

“You need to look at affordable housing as a traffic solution,” De Mayo said. “If you have jobs all over town and people can only afford to live in Buda, Kyle or Manor, then … they’re clogging the roadways.”

District 6 has two existing subsidized housing developments but has 609 very low-wage jobs that offer less than $1,250 per month, according to HousingWorks data. De Mayo said just like low- and moderate-wage jobs should be spread throughout the city, so should housing for people in those jobs.

“The only way to have a sustainable, robust community is if we tackle the racial and socio-economic segregation we have,” De Mayo said. “Unless we’re intentional in how we grow and how we plan for jobs, housing and transit, we’re just going to have further exacerbated racial and socio-economic segregation.”