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Tuesday, December 11, 2018 by Chad Swiatecki

Waller Creek taxes ID’d to possibly fund $30M in housing for homeless

City staff members have recommended that City Council consider using funds from the tax increment refinancing zone (TIRZ) created for the Waller Creek improvement project and system of parks as the biggest funding source for providing housing and services for the growing homeless population downtown.

In a memo issued last week, Interim Assistant City Manager Sara Hensley lays out a scenario in which City Council could opt to issue around $30 million in bond debt related to the Waller Creek TIRZ to pay for some combination of transitional and permanent supportive housing, respite care centers, emergency shelter space, and navigation centers to help the homeless.

That money for capital expenses would be in addition to what the city spends annually on contracts with a variety of social services contractors to address homelessness issues, most of which are related to the growing population outside downtown’s Austin Resource Center for the Homeless.
The city’s 2018-19 budget includes $26 million in homelessness funding, plus an additional $2.5 million that was allocated to pay for a variety of short-term programs to address health and other issues at the ARCH.

Hensley’s memo outlines a series of workshops held with community leaders involved in homelessness to determine how best to use the TIRZ-generated funds, which would be worked into the repayment schedule of the combined $216 million in bond debt for improvement of the Waller Creek district.

The memo recommends $30 million be taken out in three progressively smaller amounts, with an initial outlay of $12 million, with $10 million used for permanent supportive housing, $1.5 million for badly needed improvements at the ARCH and $500,000 for an initial set of navigation centers. Subsequent rounds of $10 million and $8 million would be focused mostly on providing housing options for the local homeless population, with other smaller issues eligible for funding based on needs that are most critical at the time.

Other possible uses for the TIRZ funds outlined in the memo include creating additional emergency shelter locations similar to the ARCH or bringing additional respite care for medical and social services online.

City staff members plan to prepare an agenda item for an upcoming City Council work session for leaders and staff to discuss the various options related to a possible TIRZ amendment from Council. If that process moves forward the city would start a request-for-information process from local service and homelessness organizations to gauge interest and begin gathering concepts next summer.

Those efforts would likely come after the expected selection of a contract for the long-term management and restructuring of services and operations at the ARCH. Front Steps, which is the current organization in charge of the facility, is still under consideration along with other applicants, with the decision expected to be made after a staff recommendation next month.

Hensley’s memo also makes note of other large-scale projects and programs underway in the community connected to providing relief for the homeless, with the Salvation Army moving ahead with an additional shelter that will provide another 200 beds in the spring. The countywide Pay for Success program is intended to provide housing for 250 of the community’s highest users of criminal justice and health care systems over a five-year span.

Related to the long-term prospects for the ARCH, Hensley notes that the property will be free of bond debt by 2023 (it currently has $1.6 million outstanding), providing context, “should Council be interested in exploring alternative options for this site at some future date.”

Photo by Earl McGehee made available through a Creative Commons license

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Key Players & Topics In This Article

homelessness

Tax Increment Reinvestment Zone: A tax increment reinvestment zone (TIRZ) is a political subdivision that allows property taxes above a certain amount to be funneled back into the area (or zone) in order to pay for things like infrastructure or improvements, in the hopes that reinvestment will encourage private development.

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