As federal funds decrease, Council to consider future funding for homelessness

With the city nearly exhausted of the federal money dedicated to providing housing for people who are homeless, City Council will likely direct staff to adjust and improve processes, in coordination with Travis County, for short-term assistance and long-term housing and services.

A recent joint meeting of the Public Health and Housing & Planning committees saw the passage of a recommendation for Council to consider a number of steps related to both rapid rehousing assistance and permanent supportive housing.

The steps include finding ways to optimize the waitlist process for both forms of housing, improving the path to permanent supportive housing units and services for those currently receiving temporary housing assistance, and working with relevant agencies and philanthropic groups to evaluate the current and future state of homelessness in the area.

The meeting included a joint presentation from the Homeless Strategy Office, the Housing Department and representatives from Travis County’s recently formed Supportive Housing Initiative, which showed that the city has spent more than $94 million of the $95.3 million from the American Rescue Plan Act (ARPA) that Council allocated toward homelessness programs.

David Gray, head of HSO, said the city will need to stop enrolling federally funded rapid rehousing clients at the end of this year because of guidelines that call for at least 24 months of assistance, with a requirement that all of the funds be spent by the end of 2026.

Gray said that in the 2023 budget year the city had 2,226 people enrolled in rapid rehousing via 13 contracted vendors, with many of those clients coming from the city program to disperse homeless encampments throughout the area. With ARPA money accounting for $18 million of the $23 million spent for rapid rehousing, Gray said city staff is looking at how to restructure the programs and find other means of funding.

“We’re preparing for our system to somewhat right-size once those ARPA dollars eventually fade away. A lot of people are concerned about what happens when the ARPA dollars run out, and so we are are not blind to that,” he said. “When the ARPA dollars were allocated to rapid rehousing, it was specifically intended to address a backlog that existed at the time. … In many ways, we’ve been able to successfully work through that backlog.”

Gray said a reduction in rapid rehousing funds likely would result in the reemergence of encampments around the city because there would be no way to move those inhabitants into temporary housing subsidized by the city.

Related to permanent supportive housing, Jamie May, housing and community development officer for the Housing Department, said the city is on track to have more than 1,300 such units at the end of 2027, with a variety of new construction underway.

With that representing about 25 percent of the 6,000 people estimated to be unhoused in the area over the course of a year, he said the community needs to think five-plus years ahead about how to fund additional permanent supportive housing units.

“We invested a lot of capital starting in 2022, and we are seeing the result of that and it is really impressive,” he said. “We don’t have another ARPA coming in a few years or even right now – and so what are we going to do in order to plan for the next four, five, six, seven years? These are very expensive projects and there are only so many 9 percent (federal subsidy) tax credits out there.”

Council Member Ryan Alter said the city and county need to collaborate on a plan for how to leverage funding from both bodies to meet the future needs of unhoused people.

“What is our target for 2027? Do we think we need 300 units, 400 units, 500 units? It would be really helpful for us to look out over the next few years beyond what we know is coming and help us understand not only what the target is, but what then the funding needed.”

Photo made available through a Creative Commons license.

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.