AUSTIN, Texas - The Bridge at Terracina is more than 20 years old, but the apartment complex located near Steck and MoPac could play a big role in Austin’s future. Wednesday it was portrayed as a solution to Austin’s affordable housing problem.
"I really want to impress on how unique and groundbreaking this is,” said Austin Mayor Steve Adler.
During a news conference at City Hall, it was announced that Texas Capital Bank is investing a half-million dollars into the Austin Housing Conservancy Fund. The Fund is managed by a quasi-public-private organization called Affordable Central Texas.
"It feels like philanthropy, but actually it works like an investment. So it’s the best of both worlds,” said Affordable Central Texas CEO David Steinwedell.
Three apartment complexes have already been purchased through the fund. They provide almost 800 units for about 12-hundred residents who qualify based on how much money they make.
"If the majority of our tenants are earning between 60 and 65% of median family income, we will be charging a rent in that range. It will differ by property and differ by parts of the city, but we will be maintaining rents within a band of 60 to 120% of median income so that they are always affordable,” said Steinwedell.
The plan is to buy more properties by getting more investors like Texas Capital Bank to buy into the strategy. Those who invest in the fund are locked in for 3 years and cannot cash out before then.
"We believe it is time for us to give back to the community, and to help support affordable housing by making this investment, and frankly a 5% return to a bank, that's meaningful, right,” said Kelly Hall, Texas Capital bank Executive Managing Director.
The concept is similar to what's already done by Foundation Communities, which has 23 properties. The Foundation apartments target low-income families, unlike the moderate-income working-class group the Fund is trying to help.
This new program does not address the affordability of homeownership in Austin. A neighborhood located near Ben White and South Congress is an example of the challenge many homeowners are facing. According to the Travis Central Appraisal District, the modest homes in the neighborhood are valued at or more than $300,000.
"I say that affordability is a huge challenge in this city, it’s a crisis, and no one solution is going to fix it, and there is no one solution that is going to fix it for everybody in our city which is why we have to be doing a thousand different things,” said Adler.
The goal for Affordable Central Texas is to create 10,000 rental units for 15,000 people in 10 years. However, in order for the fund to accomplish that, it will have to grow from its current level of $10 million in cash and assets to $200 million.