Affordable housing in Austin continues to be a topic of discussion for city officials, housing advocates and residents. To deal with the issue of affordable housing, the city is looking at a potential new bond and methods of long-term funding to meet the community's need.

A new bond

Mayor Pro Tem Sheryl Cole said the city is asking for another bond because previous bond money for affordable housing has already been allocated and spent. The new bond would supply immediate funding for projects during the next six years.

"The need is great," Cole said.

Austin City Council will discuss the language of a bond ordinance at its Aug. 8 meeting. The bond could be for an amount of up to $65 million and would not raise the city's tax rate. The last day to call a bond election for November is Aug. 26.

Elliott McFadden, campaign manager for Keep Austin Affordable, said Austin has been a "victim" of its own success during the economic downturn as the city grew while home development stalled. He said his organization supports a $65 million bond so affordable housing programs can continue to function and plan.

"Housing bonds are critical because that allows all these organizations to plan around knowing the funds are there for the foreseeable future," McFadden said.

KAA is a coalition of business, faith and community leaders working to get affordable housing bonds put back on the November ballot.

McFadden said he expects about 75 percent of the bond money would go to rental projects and the other 25 percent to home ownership projects. He expects more of a focus on projects for residents making 30 percent or below the area's average income. According to the U.S. Department of Housing and Urban Development, 30 percent of the area's average income is about $21,950 a year for a family of four.

Cole said making clearer to the public what the measure would fund is essential to having a successful bond. She highlighted that the bond would help build affordable housing that would be well-constructed and fit into existing neighborhoods. Furthermore, the people who would reside in the housing would pay for their housing.

City of Austin residents passed an affordable housing bond for $55 million in 2006. That money leveraged more than $196 million through sources such as tax credits, grants and private equity.

In 2012, the city went back to the voters with another affordable housing bond for about $73 million, and the proposition was voted down with 51.42 percent of the votes against the measure.

A long-term plan

In addition to a housing bond, Cole said she believes a separate long-term strategy for funding affordable housing should be on the table.

"We have to look at short-term and long-term needs and funding potential for both," Cole said.

Ed Van Eenoo, deputy chief financial officer with the city, presented to City Council on June 18 a potential long-term plan that would fund more affordable housing projects out of the general fund over about five years. Affordable housing funding currently comes from multiple sources, including the sustainability fund (SF), grants, the housing trust fund (HTF) and bonds. The SF is a reserve that helps fund environmental and economic equity projects, and the HTF is a reserve that allocates money to housing from property taxes on former city-owned land that has been developed.

Van Eenoo said projected funding needs for affordable housing in fiscal year 2014 are about $13 million in operating costs and about $10 million in capital improvement projects.

The plan Van Eenoo presented shifted much of the affordable housing funding to the city's general fund to provide a steadier funding source. The recommendation increases transfers from the general fund to the HTF by 2019 and supplements HTF funding with at least $27.1 million in bond funding during a four-year period. The plan also recommends a four-year transition to fund SF programs through the general fund.

"We're just saying we want a more sustainable, permanent funding source for housing programs, and if a council decides to add a bond election for affordable housing, than that's just an add-on and a bonus, if you will, if the citizens adopt that," Councilman Mike Martinez said at the June 18 work session.

Council is still working to establish the right balance for long-term funding sources.