Austin leaders are moving to create a housing fund aimed at preserving existing affordable apartments, a tool they hope can slow the pace of displacement in one of the nation’s hottest housing markets.
The Austin City Council is moving to establish a fund that would attract philanthropic contributions to keep naturally occurring affordable housing from being sold off and demolished, KXAN reported. Council Member Marc Duchen, who proposed the measure, said the effort is meant to counter the unintended consequences of incentive programs like DB 90, which lets developers build taller in exchange for affordable units but can still lead to a net loss of affordability when existing low-rent properties are torn down.
One flashpoint has been the Acacia Cliffs complex, where demolition of older affordable units made way for a taller building that technically met DB 90’s requirements but displaced longtime tenants.
City officials envision the fund offering property owners grants for repairs in exchange for affordability covenants. That model could preserve units without forcing owners to sell to developers.
“It’s not necessarily buying down the rent,” said Eric Johnson, assistant city manager. “It’s saying to an owner, without disrupting the market, ‘We have a grant source we could provide to you to do the capital improvements in exchange for a covenant on the property to guarantee affordability.’”
Johnson previously helped launch a similar fund in Dallas in 2021. That effort began with $6 million in seed funding and has since grown to more than $40 million, with another $60 million in the pipeline, backed by private and banking sector contributions. The Dallas Housing Opportunity Fund has a target of preserving or producing at least 1,500 affordable units by 2031.
In Austin, officials expect the money to flow toward three areas: grants for repairs, low-cost financing for new affordable development, and services for residents. But they acknowledge a looming challenge — competing with private developers who can move faster to acquire aging complexes and redevelop them.
It also might be difficult to make the math work for landlords struggling with keeping heads in beds. Oversupply of multifamily units has meant higher vacancies. Apartment occupancy dipped to 85 percent in August, with rents sliding 7.5 percent year-over-year to an average of $1,405, according to ApartmentData.com. In 2023, rent dipped 12.5 percent from its 2021-22 highmarks, but many renters still find the city unaffordable.
— Eric Weilbacher
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