Council OKs first use of Project Connect money for housing

With little fanfare Thursday, City Council, acting as the board of the Austin Housing Finance Corporation, approved using Project Connect anti-displacement dollars for the first time to purchase apartment complexes for low-income residents. The two complexes AHFC will acquire are at 615 W. St. Johns Ave. and 2000 Woodward St.

In order to purchase the two complexes, Council authorized the creation of two nonprofit corporations to serve as the board of directors for Midtown Flats on St. Johns Avenue and City View on Woodward.

Midtown Flats, which sold for $7.78 million, offers 20 one-bedroom units and 20 two-bedroom units. Housing and Planning Deputy Director Mandy De Mayo said the property is considered “naturally occurring” affordable housing because units are part of a tax credit property and are currently renting at affordable to those making around 60 percent of the median family income. AHFC has a goal of driving those rents down so they are affordable for families earning 50 percent or less MFI. She said AHFC is asking for about $400,000 for minor rehabilitation and improvements. “And then we will be stabilizing the rents and ensuring the long-term affordability,” she said.

As for the City View apartments, seven are currently renting to families at 30 percent MFI, while 61 are renting to families earning up to 60 percent MFI. Two of the apartments are not restricted. The complex offers 52 one-bedroom units and 18 two-bedroom units.

Council also authorized purchase of the Retreat at North Bluff, in partnership with Affordable Central Texas, a nonprofit equity fund operating as the Austin Housing Conservancy. AHFC purchased that property using $7 million in 2018 general obligation bonds.

According to documentation from AHFC, “The property is mixed-income and currently encumbered by a ground lease and restrictive covenant with AHFC. The development’s importance will only grow given the slated Orange Line light rail from Project Connect.” The project includes 68 units that are currently rented at market rate, 62 to families earning 120 percent MFI, 54 to families earning 80 percent MFI, 26 to families earning 50 percent MFI and 30 units to families earning at or below 30 percent MFI.

De Mayo said, “We’re actually decreasing the market rate units there to 80 percent median family income and driving down the affordability at all the different levels. That’s always our goal. It may not happen immediately, but it’s always our goal.”

Mayor Steve Adler said he recalled Council “talking about this as the ‘strike fund’ eight years ago. We talked about trying to put together something that would be market-driven and maybe meet some workforce housing. And it’s been developed and picked up and they’re out raising millions of dollars for it right now to that end.”

Later, during citizen communication, Susana Almanza of PODER warned Council that decisions around Project Connect could result in the displacement of current residents. She said 60 percent MFI for rental units and 80 percent MFI for ownership units was simply too high a bar for many in the Montopolis neighborhood. She said the city’s efforts, along with Capital Metro, “would just exacerbate the displacement and gentrification. This is a very, very serious issue because when residents and people from the city pass a bond for anti-displacement, we did not say further gentrify our communities.”

Almanza argued that the city should be considering a much smaller area or neighborhood for quantifying the median family income, instead of using Travis County, which has higher incomes than the people being displaced.

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Posted In: Housing, District 3, District 4