2015 – The Year in Affordable Housing, Austin, TX

Austin, Texas is on many desirable “Top 10 Lists.”  However, in 2015, the Martin Prosperity Institute rated Austin as one of the most economically segregated cities in the country.  Much of the segregation that occurs in Austin is due in large part to the lack of affordable housing across the city.

 

Affordable homes at Westgate Grove.

In 2015, housing builders and developers have reported finishing or closing a total of 725 affordable rental and homeownership units.  This number is significant because it falls short of the supply needed to keep up with the demand.

In the City of Austin’s Housing Market Study of 2014, it was reported that a gap of almost 48,000 rental units for low-income residents.  Austin Mayor Steve Adler has called for building 100,000 new housing units by 2025 to affordably house the residents of Austin.  At the current production rate, it will be a long time before the gap will be filled.  And as Austin continues to grow in population, the gap could only get wider.

Some bright spots for last year included the establishment of the Community Land Trusts, HACA’s acquisition of The Bridges, Foundation Communities’ opening of Capital Studios, and the passing of the Accessory Dwelling Unit ordinance.

With the purchase of The Bridges of Center Ridge and The Bridges of Tech Ridge, The Housing Authority of the City of Austin (HACA) was able to preserve over 300 units for affordable housing.  In January, Foundation Communities opened Capital Studios, downtown and in December opened Homestead Oaks, in Southwest Austin.  These projects contain 275 new residential units.

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Highlights for the year include:

Austin Habitat homeowner getting the keys to her home.

·         Community Land Trust – The City of Austin closed on the first 7 units in their Community Land Trust in 2015.  A Community Land Trust is a new form of homeownership for Austin and Texas.  This type of housing allows the buyer to own the home at an affordable price, and build equity while owning the home.  Under this model the buyer, usually making 80% of Austin’s Median Family Income or lower, purchases the unit through taking out a home loan.  The buyer owns the housing unit, but not the land on which it is built.  The land is held by the CLT agent, which is usually the government or a non-profit organization.  Because the buyer is not buying the land, the price for the housing unit is affordable.  The buyer will pay a monthly lease for the land, but this is usually a nominal amount.  Future CLT projects in Austin will allow for more homeownership across the entire city, especially in high opportunity neighborhoods.  In addition to the City’s effort Guadalupe CDC also operates a CLT.

·         Accessory Dwelling Units – In November, the Austin City Council passed an ordinance making it easier to build accessory dwelling units (ADUs), also known as granny flats or garage apartments.  The ordinance allows garage apartments on SF-3 (and some SF-2) lots , between 5,750 and 7,000 square feet, which encompasses roughly 56,000* lots in Austin.  This change allows for potentially more affordable housing units to be built across the city, but especially in central neighborhoods.

·         HACA – The Austin Affordable Housing Corp., the nonprofit subsidiary of Housing Authority of the City of Austin, and the Community Development Trust, a national lender and investor in affordable housing collaborated to purchase The Bridges at Tech Ridge and Center Ridge.  This purchase ensures that 321 apartments in Northeast Austin will have affordable rents for income-qualified tenants for forty years.

As we look forward, for Austin to fill the gap of affordable housing units more will need to be done at the policy, financing, development and regulatory levels to meet the ever increasing demand.  However, the most important driver will be the building of affordable homeownership and rental units now, as we continue to grow.

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About J. Michael Willard

J. Michael Willard – Principle, Willard Consulting, has been involved with affordable housing for more than 20 years.  In his work with Habitat for Humanity he has built homes in Austin, TX and around the world.  Currently he is consulting with non-profit organizations on affordable housing and other strategic and operational issues.

willardconsulting@gmail.com

Call/Text 512-426-5004

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* Council Member Greg Casar contacted me to correct this number.  Earlier I had reported only 9,000 lots were available.