AUSTIN (KXAN) — Just south of the river, Foundation Communities is nearly ready to open the doors of one of its latest affordable housing projects, Zilker Studios.

The seven-story building near Oltorf on South Lamar will soon be home to 110 single adults in need of housing and wrap around services. Many of its residents will be coming directly from homelessness.

Newly-built Zilker Studios on South Lamar. The Foundation Communities building will be home to more than 100 single adults, many coming from homelessness (KXAN photo/Grace Reader)

“The biggest source of funding for Zilker Studios came from low-income housing tax credits. They’re federal credits awarded by the Texas Department of Housing, a state agency,” said Walter Moreau, executive director of Foundation Communities.

While the building relied heavily on state-awarded funding, a brief put together by University of Texas researchers and policy experts shows Texas spends less than most states on housing, falling behind only Nebraska.

“We really haven’t had a real suite of state policy to really address these issues. So we’ve looked to our counties and our cities to say ‘Hey, y’all fix this and you manage the growth,'” said Steven Pedigo, director of the LBJ Urban Lab and professor of practice at the LBJ School of Public Affairs.   

The brief identified potential solutions for Texas lawmakers to consider ahead of the 88th Legislative Session.

Local land development, zoning codes

The UT brief recommends the state incentivize local municipalities to revise outdated or restrictive zoning requirements that hinder market-rate and affordable housing development. It’s something the Biden administration also wants to put money towards federally, according to his 2024 budget proposal.

While land development code, or LDC, challenges are an issue statewide, the City of Austin hasn’t seen a significant overhaul in its LDC since the early ’80s and has faced legal challenges in its attempts to make major adjustments.

Just a few years ago, a lawsuit by 19 Austin residents brought the council’s overhaul process to a halt.

Still, incoming members of council largely ran on changes to city zoning processes, including an overhaul of the LDC to get the city back on track with its affordable housing goals. The City’s Housing and Planning Department has nearly 20 land development changes in the works, Director Rosie Truelove told the Housing and Planning Committee last month.

Several bills have been filed by state lawmakers that could adjust Austin’s zoning rules, including one filed by Sen. Bryan Hughes, R-Mineola, that, if passed, would scrub some of the City of Austin’s compatibility laws. Those laws restrict how tall buildings can be when they’re built next to certain zoning, including single-family homes. That bill is still in committee.

Additional state funding

The brief recommended state lawmakers simply put more money towards affordable housing this legislative session “including state budgetary surpluses and relatively flexible one-time and ongoing federal funding.”

In that bucket, researchers also recommended both local municipalities and the state look at underutilized land — such as vacant buildings and parking lots — and repurpose it for affordable and mixed-use housing.

It has not yet been decided how the state’s surplus will be used, but Republican lawmakers have previously talked about using it for property tax relief. In a statement ahead of the legislative session, Lt. Gov. Dan Patrick said it’s “imperative” to “save a sizable portion for the future.”

Re-evaluate requirements for state programs

While Foundation Communities’ Zilker studios property was largely funded by Low-Income Housing Tax Credits, researchers found those credits are among some of the most difficult to qualify for.

The brief recommended the state re-evaluate its criteria for state affordable housing programs already in place. This was listed as a separate item in the brief.

It also recommended the state look at requirements for individuals to get help with housing, including the criteria for Housing Choice Vouchers, which help people pay for housing.

Property tax relief

One of the big talkers among Republican lawmakers this year is the homestead exemption and property tax relief. It’s also something UT policy experts recommended get another pair of eyes.

“Rising real estate market valuations create higher property tax bills, imposing a growing financial burden on homeowners, landlords, and renters. Increasing the homestead exemption would possibly help,” the brief said.

The homestead exemption allows some property owners to cut down on how much they’re taxed.

Senate Republicans introduced a bill this year they estimate would save an average homeowner nearly $800 for the next two years. For Texans older than 65 or who are disabled, those savings would increase to more than $1,000.

Senators’ estimates were based on the average homestead value of $331,000.

Travis County using one-time federal funding

While Texas has spent little on housing help, Travis County commissioners voted during the pandemic to delegate more than $100 million in one-time federal funding to addressing homelessness.

“We got over $200 million from the Biden administration to help the county recover from COVID and the effects of COVID. We immediately voted to invest about half of that, $110 million, into affordable housing,” Travis County Judge Andy Brown said.

The money will go to the following:

• Community First will get nearly half of the funding to build out its tiny home community off Burleson Road in southeast Austin. The funding will be enough for an additional 600 tiny homes, Brown said
• Money will also go to Foundation Communities, which will build an apartment complex near the tiny home village. The director of Foundation Communities said that will house an additional 100 people.
• The Other Ones Foundation will get $3 million in funding for a 200-bed transitional shelter.
• The rest of the money will go to a consortium of nonprofits and private developers, though the contract for that portion of the money has not gone before commissioners yet

“I am extremely happy with the commissioners’ will to invest such a huge percentage of our rescue act funding into supportive housing which I think is exactly what we need here in Travis County,” Brown said.

This story was produced as part of the inaugural KXAN Investigative Reporting Fellowship. KXAN City Reporter Grace Reader was one of two journalists selected to take part in the six-month training program in 2023. The following KXAN staff members contributed to that training or the development of this report: Data Reporter Christopher Adams, Senior Investigative Producer David Barer, Investigative Photojournalist Richie Bowes, News Director Haley Cihock, Graphic Artist Wendy Gonzalez, Graphic Artist Aileen Hernandez, Director of Investigations & Innovation Josh Hinkle, Investigative Producer Dalton Huey, Investigative Photojournalist Chris Nelson, Social Media Manager Jaclyn Ramkissoon, Digital Special Projects Developer Robert Sims, Digital Director Kate Winkle and Photojournalist Ed Zavala.