Council Recap: A Big Bucket of BidenBucks to Stitch Up the Safety Net

Homelessness response anchors $263.5 million spending plan

Photo by John Anderson

In what Mayor Steve Adler called a historic step toward ending homelessness in Austin, City Council voted to allocate $100 million in federal stimulus and relief funds (augmented by local reserves) toward services and plans to address the city’s shelter crisis.

The mayor and Council hope Austin’s ante of more than half of the city’s American Rescue Plan Act funding will motivate other public, private, and nonprofit investments to help those now living without shelter and to create sustainable long-term solutions. Adler, after the vote, called for help from “the partners we need to tackle challenges that are bigger than what the city, county, or [any] service organization can do by itself. It’s going to take us all working together and pitching in.”

The homelessness funding is part of the total $263.5 million spending plan that Council wants to spur creation of a stronger social safety net which can endure past the Dec. 31, 2024 deadline to use the federal funds. After much tinkering, as we reported on in this week’s issue, the final plan includes $188.4 million in ARPA funds, $46.7 million in other federal grants, and $28.4 million of surplus cash (above what's required by Council’s financial policies) in the city’s reserve funds.

A final framework for these funds was agreed to Wednesday night (after the Chronicle went to press) by Adler and CMs Alison Alter and Kathie Tovo. In addition to homelessness, its priorities for funding are child care ($15 million), workforce development ($21 million), rent relief ($42 million), and community resilience, a category that includes $12 million for relief in the non-profit and creative sectors, $3 million to address food insecurity, and another $3 million to establish pilot resilience hubs.

Relief for renters, a major goal of many CMs especially in light of Council’s move to double the city’s homestead exemption, got a significant boost from emergency grants made available by the U.S. Dept. of Housing and Urban Development. The HUD money brought the federal dollars allocated to tenant relief up to $35.3 million, to be combined with $6.7 million in local funds to meet an anticipated spike in demand as federal eviction protections expire and landlords begin to seek back rent.

A city ordinance approved in April requires landlords to apply for relief funds before moving to evict tenants who owe five or more months’ rent, so replenishing the available dollars was important to CMs and advocates. An amendment from CM Greg Casar directs City Manager Spencer Cronk to identify another $6 million in local dollars to use for rent relief if the $42 million is exhausted before the end of this year.

Council’s concurrence with Adler’s push to devote the largest piece of the ARPA pie to homelessness response was made without a detailed plan for spending what’s now a $100 million commitment. Staff now has the difficult task of producing such a plan, while coordinating with partner agencies and business leaders to make sure investments are made efficiently, and while also attempting to comply with Proposition B to its backers’ satisfaction.

In a June 7 post to the Council message board, CM Leslie Pool urged a more deliberate approach to allocating ARPA funds, one made in tandem with Council’s July and August work on the fiscal year 2022 budget. On Thursday, Mayor Pro Tem Natasha Harper-Madison expressed similar reservations about “not having a concrete plan for how to utilize [the funds], especially considering we’re going to need that additional help.”

Both Pool and Harper-Madison ultimately voted for the plan after Council provided more detailed direction to Cronk and city staff through several amendments. One of these, from Alter, requires that Cronk analyze and, if necessary, reallocate funds previously earmarked for homelessness services to align with how he decides to spend the ARPA dollars, which should be done to “maximize opportunities to leverage funding matches from private, philanthropic or other government funding sources.”

Council also gave its final approval to the homestead exemption increase, up to the maximum of 20% of taxable value allowed by state law. This follows its votes last week to raise the (flat-rate) exemption offered to homeowners over 65 or who live with a disability. How these tax breaks will manifest in the average homeowner’s tax bill is still to be seen; Council gave itself permission to set a higher property tax rate in the FY22 budget than the baseline allowed by state “revenue caps” without voter approval, and the city only accounts for around 25% of the typical tax bill (even less if you set aside the rate levied to fund Project Connect). Of course, home values in Austin continue to skyrocket; the April 2021 data from the Austin Board of Realtors pegs the median sales price for a single-family home within the city limits at $550,000, a 31% increase over 2020.(It's $460,000 for the metro area as a whole.)

Council likely won’t meet again as a full body (and potentially in person) until July 29, though its committees will continue to meet. Cronk is expected to present his proposed FY22 budget to Council and the community in early July.

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