Housing Authority Won't Use Affordable-Housing Bond Money

HACA chooses to keep independent of city's $55 million in affordable housing bonds on November ballot

The Thurmond Heights affordable-housing community in North Austin is an obvious candidate for mixed-use redevelopment, but if it happens, the city's Housing Authority won't be doing it with city bond money.
The Thurmond Heights affordable-housing community in North Austin is an obvious candidate for mixed-use redevelopment, but if it happens, the city's Housing Authority won't be doing it with city bond money. (Photo By John Anderson)

The city's $55 million in affordable-housing bonds on the ballot in November has a lengthy list of high-profile supporters eager to use bonds for future housing projects, but conspicuously missing from that list is the first, and biggest, provider of affordable housing for Austin's lowest-income residents.

No one in Austin has put more low-income housing on the ground – or offered more rental assistance to the poor in the city – than the Housing Authority of the City of Austin. It would make sense if HACA – which currently has a waiting list of 6,000 – was the first in line to seize on the chance to use the proposed city bonds. But it's not going to happen. Executive Director James Hargrove says the federally subsidized housing authority, with an annual budget of $75 million, has plenty of plans for new housing; it simply doesn't involve using the city's money. And that's a good thing, Hargrove says.

"Had the Housing Authority been sitting by, idle, not generating new income, we might have considered it," he said. "Instead, we've been going about the business of creating business, of creating other revenue streams that we can leverage, so when we do step out there to borrow money for our projects, we've got the experience."

Federal funding for local housing authorities has been stagnant for almost a decade. Rental subsidies have been flat, and the money to build new housing has dried up. HACA bought its last property in 1979. To pick up the slack, the Republican administration has dictated that housing projects be self-sufficient and, a step beyond that, pursue their own public-private partnerships.

This is not taking tenants and parachuting them, with Section 8 vouchers, into market-income communities across the city. This is taking land that the Housing Authority owns – HACA has 19 communities across the city – and turning those into mixed-use multipurpose communities, not unlike the goals of city-driven projects such as Mueller.

The first, most obvious, target for redevelopment is Thurmond Heights, a 144-unit apartment complex that sits on 16 acres on North Lamar, just north of 183. The Housing Authority's board sees potential in the prime location and quality of the property. Ultimately, with HUD's approval, HACA would like to create a full community with commercial property, neighborhood retail on the frontage road, and a broader mix of housing.

This is not HACA's first brush with redevelopment. When Vignette's proposal for a headquarters on Town Lake was still in play, the company offered to buy Lakeside, the Housing Authority's senior community next to the Four Seasons. That deal fell through when the market cratered, but HACA commissioners such as Carl Richie still see potential in leasing the property and moving the senior community to Mueller.

"You have a great view at Lakeside, but that's about it," Richie said. "Back in the Sixties, when Lakeside was built, they thought it was a great thing, putting seniors in high-rises, but it's not a convenient location. There's no access to medical facilities, no retail, no parking spaces when family members visit. It would make a lot more sense to be out at Mueller, where you would have a full community with parks and medical offices."

Leasing Lakeside to generate the revenue to build a senior property at Mueller is one way to build revenue. But HACA already is generating revenue through its ownership of a couple of market-rate apartments in Austin, plus leases of an East Austin retail center. Richie says people would be surprised to know which properties HACA owns and how it leverages those properties, such as negotiating lease breaks with retail tenants who agree to employ residents of local housing projects.

It's that kind of innovation that will mark the HACA of the future, Richie says. And there's freedom in being able to pioneer your own innovation. "The interesting thing about us is that we have a quasi-public entity. We're not regulated by the city. It's HUD that provides our subsidy," he said. "That gives us the ability to do our deals. We're not relying on City Council. We don't have to do this deal on three readings. That's one of the beauties of being autonomous. We really want the Housing Authority to be its own agency and do its own deals."

Austin Housing Summit: Balancing Affordability and Healthy Neighborhoods

HousingWorks Austin gathers the community together Saturday to discuss the role of affordable housing in preserving healthy neighborhoods. Topics covered will include current Austin housing policies, the bond proposals you'll see in the upcoming November elections, and affordable-housing precedents set by other neighborhoods around the country. Coffee and breakfast provided.

E-mail cgauss@austin.rr.com to RSVP. 8:30am-noon. Ragsdale Center at St. Edward's University, 3001 S. Congress. Free.

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affordable housing, affordable housing bonds, Housing Authority of the City of Austin, James Hargrove, Thurman Heights, Lakeside, Carl Richie

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