Philanthropy’s Role in Austin’s Affordable Housing Crisis
Affordable housing is a complicated and controversial issue in our community. On average about 150 people move to Austin each day while many current families are being pushed out to surrounding cities where housing is more affordable. Does Austin have the infrastructure, planning and will to keep up with the growth? What role can we play in assuring that our community is welcoming and accessible for everyone?
Austin Area Funders, a program of Austin Community Foundation, hosted Julian Huerta, deputy director, Foundation Communities; Greg Weaver, executive vice president, Catellus and the Mueller Foundation; and David Steinwedell, CEO Affordable Central Texas, for a cross-sector discussion about this major issue affecting our community.
Foundation Communities, an organization that provides affordable housing and supportive services for low-income families and single adutls transitioning out of homelessness, currently has 23 affordable housing communities consisting of nearly 3,000 units.
Families earning 60 percent or less than the median family income (MFI), as determined by the U.S. Department of Housing and Urban Development, are considered to be low income and can qualify for affordable housing assistance and other supportive benefits they might not otherwise be able to access.
Affordable Central Texas argues that families and individuals who earn more than 60 percent MFI but still cannot afford to live in Austin are crucial to Austin’s vibrancy and culture. “These are our teachers, our first responders and our musicians,” Steinwedell said.
Affordable Central Texas created its first investment fund to help multi-family housing stay in Austin. The Austin Housing Conservancy is a private equity open end fund that will invest equity from philanthropists, foundations and banks primarily in existing multi-family housing targeted at workforce individuals and families. The fund will limit rent increases for families to be more aligned with the wage growth in Austin.
"The Mueller has a unique, new strategy to keep affordable housing in our communities. We want to change people’s ideas of what affordable housing is,” Weaver said. “It used to be that development happened separately; there would be low-income families, high-income families, and middle-income families all living in developments made for specifically for them.”
The Mueller Foundation has implemented an innovative solution to both sustaining affordable housing and removing the stigma attached to it. When an income-qualified individual buys a home in an affluent neighborhood at an affordable price, they could sell the house in a year and get a huge return on their investment, but then the affordable unit is no longer affordable. Instead, the Mueller Foundation buys the home and gives the homeowner two percent appreciation per year of ownership, and is then able to sell the house again at an affordable rate, sustaining its affordability.
“Philanthropy closes the gaps,” Huerta said. “Some of the communities that we’ve built could not have been possible without private philanthropic investments.” What’s unique about Mueller is instead of having families of different incomes living separately, they’re now able to live in mixed-income communities. The results of the Mueller development have proven that mixed-income living is something Austinites desire.
Philanthropy can play a major role in its strategic investments in addressing affordable housing. To keep Austin vibrant and affordable for everyone it will take a cross-sector convening around the issues to come up with sustainable solutions.
“There are so many worthy causes, but it’s obvious that this should be at the top of our lists,” Weaver said. “The affordability crisis is growing every day, but we can come together to solve it.”