City needs up to eight permanent supportive housing projects per year to solve homeless housing

The city’s housing staff members acknowledge a need to accelerate the pace of new permanent supportive housing projects in the coming years to meet the long-term goal of 5,000 additional units over the next decade to address the long-term needs of people experiencing homelessness.

At its latest meeting, City Council’s Public Health Committee reviewed the city’s pipeline for permanent supportive housing and ongoing efforts to address housing needs, following last week’s resolution directing the city manager to develop policy and investment strategies to construct and operate PSH units in Austin.

Mandy DeMayo, interim director of the Housing Department, discussed recent funding the city has been awarded, including $14 million through the Continuum of Care program, coordinated through the Ending Community Homelessness Coalition, as well as a $6.7 million Pro Housing Grant, a one-time award administered over six years. Also playing into the PSH funding mix, Austin receives approximately $14 million annually in federal block grants, including Community Development Block Grants, HOME Investment Partnerships, Housing Opportunities for Persons With AIDS, and Emergency Solutions Grants.

As of now, Austin has 480 PSH units in operation, with an additional 338 units expected to come online this year. Looking further ahead, 527 more units are planned for 2026 and beyond, bringing the total PSH inventory to over 1,345 units.

ECHO’s latest modeling suggests that Austin needs nearly 5,000 additional PSH units over the next decade, averaging 500 new units per year. The committee discussed how to meet this ambitious target, acknowledging that while the city has invested approximately $137.2 million into PSH projects so far, additional funding and strategic planning will be required to sustain long-term efforts.

DeMayo noted that on average, the city’s subsidy per PSH unit is around $140,000. Funding has come primarily from general obligation bonds, with some contributions from Project Connect and downtown density bonus programs. However, significant gaps remain in service and operating subsidies, which are crucial to ensuring the long-term viability of these units.

“That goal is certainly ambitious and challenging,” she said before clarifying that all new PSH units will require additional funds for operational expenses and supportive services, with the federal government not expected to provide much in the way of additional support funding. “This $137 million is strictly capital to build and so when we go back to the three-legged stool … we can’t just have two legs of the stool.”

At next week’s meeting, City Council will consider approvals for a handful of projects to receive 4 percent tax credits to help support their funding stack.

Looking at the expected timeline for new PSH projects, Council Member Ryan Alter questioned DeMayo on what the city is doing to prepare new proposals and potential partners for the roughly half dozen projects needed per year to meet the goal of 5,000 units.

“If we want to deliver on these goals three, four or five years out, we have to start doing that stuff, doing the pre-development today and … nothing in the 9 percent applications are PSH, so that means you’re looking at six to eight 4 percent deals to meet that 600 to 650 per year,” he said. “How do we get six to eight per year?”

DeMayo explained that the Austin Housing Finance Corporation owns more than 60 acres of land across the city and is currently reviewing a consultant’s report to determine how best to use these parcels. Some sites are better suited for ownership housing, while others could support PSH.

She emphasized that proximity to high-frequency transit is a key factor in selecting sites for PSH, as accessibility is crucial for residents. The portfolio analysis will help prioritize which parcels will be put out for solicitation first.

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