Espero in Rutland offers hope to the homeless

At next week’s meeting, city council, acting as the board of directors for the Austin Housing Finance Corporation, is expected to approve funding for a 171 supportive housing development at 1934 Rutland Drive.

In building and operating Espero in Rutland, AHFC will partner with Austin’s Caritas and the Vecino Group, a national developer of low-income tax credits that is described in city documents as having development, design, engineering, construction and asset management capabilities.

Overall, the project and its programs are expected to cost around $ 40 million. Mandy De Mayo, community development administrator for the city’s housing and planning department, expects the project to launch in July and rental to begin in the winter of 2022 or 23.

De Mayo described the Espero project as similar to the Terrace at Oak Springs, a 50 housing complex for the homeless operated by Integral Care.

Caritas’ Jo Kathryn Quinn and housing consultant Jennifer Hicks met with De Mayo three years ago to introduce the Vecino group, which has expertise in ‘ultra low barrier supportive housing’, she said. declared. It is often very difficult for homeless people to find accommodation, not only because they cannot afford it, but because of the criteria for selecting tenants. Many are excluded because of their criminal history or deportations, while others are disqualified for not being sober. With the Housing First concept, people get housing and then they work on the other issues, De Mayo said. “It’s one of the solutions we know we need at the local level.”

Espero will offer 101 dedicated units for people receiving a continuum of care – effectively getting off the streets. According to the city’s safeguard documents, 96 of the units will be rented to people earning 50 percent of the median family income; 48 to those earning 30 percent of median family income; and 27 units for people earning 60 percent of median family income.

However, as De Mayo explains, people who come off the streets often have no income. The city will provide an operating grant for 50 of the units.

“We pay the difference between what (tenants) can pay and the market rate,” she said. “A lot of people will not have any kind of income and Caritas will help them to apply” for whatever they are entitled to. She described the city’s payments as “an ongoing subsidy (which) allows the operator to keep the lights on.”

The city will also provide two different types of bond financing. Last summer, the AHFC’s board of directors approved $ 8.5 million in general bonds and the city launched its local housing business.

In addition to GO bonds, which are backed by the city, the AHFC will issue what are known as private activity bonds. As a general partner, AHFC is able to share its tax-free status with the company. These are not created by the city and the city has no obligation to reimburse them.

De Mayo said one of the housing finance company’s unique powers is its ability to issue debt. Typically, a bank buys this debt and it is paid off with rent. Even though they’re called private activity bonds, these bonds are still issued for public benefit and typically cover 50 to 70 percent of the cost of development, De Mayo said.

Although the developer claimed 9% tax credits from the Texas Department of Housing and Community Affairs in 2020, the claim was denied. TDHCA describes these tax credits as “highly competitive”. However, the agency also offers 4% tax credits for low-income people and these are not awarded on a competitive basis. AHFC is counting on these tax credits to help make Espero in Rutland a reality.

In its 2020 TDHCA application, Caritas said: “Austin suffers from a severe shortage of very affordable housing with only 21 affordable rental units available for 100 very low income tenants. This lack of very affordable housing leaves many workers unable to afford housing. People living in poverty are at a higher risk than most of losing their homes and becoming homeless. “

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