“That’s part of the value here, is that we’re able to take a minimum amount of city resources and build on that over a period of time to create a large program to basically prevent displacement," said council member Marc Duchen, who proposed the program.
The setup
Since the 2000s, Austin has spent hundreds of millions of public dollars on developing income-restricted housing available at lower rents or purchase prices. Some city housing funds have also been spent on land for future construction or the acquisition of residential properties with cheaper housing.
In part given the wide cost difference between developing a project from scratch and buying or maintaining existing sites, City Council voted Sept. 11 to pursue new programs centered around the preservation of naturally occurring affordable housing in Austin. Duchen said he drafted his proposal based on concerns about local cost of living and displacement pressures.
“There’s definitely, I think, in recent years been a push to do more new-build affordable housing, and the challenge with that is it’s really expensive compared to preservation," he said in an interview. "This would be a far more economical way to stretch every dollar that we have that can be applied towards affordable housing. And we’ve seen other cities do it successfully, and so it felt like a tool that we could easily emulate."
The approach
Austin's new housing preservation programs will be aimed at serving lower-income residents earning at or below 50% of the local median family income, or MFI, that's now $133,800 for a four-person household.
The city could begin offering grants, low-interest loans or other options for property owners to improve and maintain housing—often aging units that lack amenities and need repairs—while keeping it below market rates. That support would ensure they aren't redevelopment with replacement units that often are far costlier than the original, older spaces.
Duchen said he was partially inspired by a controversial rezoning in his West Austin District 10 this year that'll allow for the demolition of hundreds of lower-cost apartments. That process and others sparked a revision of a local building program that's enabled redevelopments around the city, and Duchen said many such zoning cases could've been handled differently before consideration at City Hall.
"The moment that this developer flagged that he was interested in doing something with this [naturally occurring affordable housing] property, we should have reached out to him and said, ‘Hey, is there a different way we can approach this that would meet your needs but also help keep the housing affordable?’" he said. "I don’t think those conversations ever happen because there’s not the tool in place to leverage that."
City staff will now move to map out relevant properties around Austin to determine where natural affordable housing is today, what issues those properties face, and which neighborhoods have the highest risk of redevelopment and displacement. Duchen said it'll be critical to step up the city's efforts within a "brief window" for more effective preservation as Austin's housing costs decline while new apartment construction continues.
To start, less than $10 million from housing bonds and the Project Connect transit program's anti-displacement funds could be set aside for new preservation work. While mainly a local government initiative, Duchen said he the fund is intended to be open to outside companies, investors or philanthropists to expand the program over the years.
Zooming in
The startup of an affordable housing preservation program in Austin would follow similar initiatives from across the country, including Dallas. There, an initial $6 million investment approved by City Council has grown to a more than $40 million fund thanks to several private sources. Assistant City Manager Eric Johnson, a former Dallas official who'd worked on that effort, told council members it'll now be critical to quickly scale up in Austin.
“Every American city should have a [naturally occurring affordable housing] strategy. If they do not, I don’t believe they are functioning appropriately in the space of affordable housing," he said Sept. 9.
"If we’re losing potentially hundreds of units a year to demolition or redevelopment to luxury units or market-rate units, we’re way behind in the problem. So my hope is that this helps give us more arrows in our quiver to go address this problem," Duchen said.
Officials credited the Texas Housing Conservancy, a private equity affordable housing fund, for its widespread preservations efforts so far. But looking ahead, local investment will be sought to build off the city's initial funding baseline and keep pace with the market. Duchen also said he expects to see successful private partnerships—despite lacking recent support for other civic efforts—given the results of housing fund programs elsewhere.
“I think those dollars will come. They’ve come for those other cities, and I think in this case we’ve got a very powerful argument," he said. "We’ve got a lot of evidence to suggest that this model works, and that’s been I think the challenge for philanthropy in the civic space."
What's next
The funding program's unanimous approval by council in September kicked off an evaluation of Austin's affordable housing landscape, and potential approaches for new preservation programs.
No formal timeline for the housing fund's launch is set, but both Duchen and Johnson said they'd hope to see progress within a matter of months. Once it's created, the city will set goals for its growth through outside contributions over time.
"The swifter we can move on this, the more displacement we can prevent," Duchen said. "Given how urgent this issue is and how critical housing pricing and affordability is—you know we’ve got a tax rate election coming up that’s going to magnify this problem—I think the sooner we can move on this ... is going to help everybody involved.”
