Austin housing staff outline $137.2M city investment and pipeline for permanent supportive housing

At the Feb. 5, 2025 Austin City Council Public Health Committee meeting, interim Housing Director Manny DiMaio briefed members on the city’s permanent supportive housing (PSH) pipeline, recent grant awards and the financing and timeline challenges for delivering units at scale.

DiMaio said the city was recently notified of two major funding items: approximately $14,000,000 in Continuum of Care (CoC) funding coordinated through ECHO and a one-time Pro Housing Grant award of about $6,700,000 to be administered by the Housing Department over six years. She also summarized the city’s recurring federal block grants—CDBG, HOME, HOPWA and ESG—totaling roughly $14,000,000 per year, which the Housing Department and Austin Public Health administer in different combinations.

DiMaio described three components required for site-based PSH—capital to build housing, wraparound services and an ongoing operating or rental subsidy—and said the city currently has about 300 operational PSH units and a pipeline that will yield roughly 1,107 PSH units overall. She told the committee the city’s direct capital investment in those projects totals about $137,200,000, an average city subsidy of roughly $140,000 per PSH unit; that capital total excludes service and operating dollars.

She outlined funding and program components that support housing for people experiencing chronic homelessness, including a tenant-based rental assistance (TBRA) contract funded with about $1,300,000 annually from the HOME block grant and a local housing voucher program funded from the housing trust fund at about $4,000,000 currently committed to 374 units across seven properties. DiMaio said the housing trust fund receives around $10,000,000 annually for such work.

Projects discussed included hotel conversions (Pecan Gardens — 78 units; Bungalows — 60 units; Balcones Terrace — 123 units, with 60 units dedicated to the Continuum of Care) and new construction or conversion projects in various stages, such as Sparrow at Rutland (operational), Katie Lofts (under construction, expected spring 2025), Libertad (198 units, 50 PSH units slated for summer 2025), Cairn Point Cameron (100 PSH units under construction), the RAS project, and five collaborative projects under the Travis County ARPA-funded collaborative (Seabrook Square 2, Safe Alliance project, Works 3 at Tillery for youth, Cairn Point Montopolis and the Urban Empowerment Zone project with the Urban League).

DiMaio said the city participates in collaborative capital stacks for five Travis County projects and that, for those five projects, the city contributed about $50,000,000 while partners contributed a similar amount; the $137.2 million figure represents direct city capital contributions across the pipeline. She cautioned that the capital figure does not include service dollars or ongoing operating subsidy; much of the operating support has historically come from project-based vouchers administered by the Housing Authority of the City of Austin (HACA), but federal voucher availability for new projects is uncertain.

On financing timelines, DiMaio said many PSH projects rely on low-income housing tax credits and bond financing. She estimated that a developer starting a 4% tax-credit PSH project today would likely open in late 2028 in a best-case schedule that includes a November 2025 lottery allocation, a financing close within 180 days and about two years of construction.

Committee members asked how the city could accelerate production to meet an ECHO model that calls for roughly 5,000 new PSH units over 10 years; DiMaio said a proactive solicitation that pairs capital dollars with committed operating and service support is a best-practice approach and that Austin Housing Finance Corporation (AHFC) land and an upcoming AHFC parcel-prioritization report could inform targeted solicitations. She told the committee the department has estimates on operating subsidy needs (about $15,000 per unit per year) and committed to returning to the committee in March with sample project estimates and operating-cost figures.

The committee asked staff to return with a March briefing that includes capital and operating estimates for an example project and parcel recommendations for solicitations.