Austin will need nearly $101 million — about $33 million of which would come from community partners — next year to adequately fund emergency shelters and support services for the city's homeless population, according to the David Gray, the city's homeless strategy officer.
That money would help the nearly 5,000 people experiencing homelessness in Austin, according to data from ECHO. The population has grown over the last several years as the of cost of living has increased, making the city less affordable.
But the need for more money comes at a time when the city is already strapped for cash as it faces a $33 million budget deficit next year. The shortfall is being attributed to flat sales tax revenue, limited property tax revenue and an end to COVID-era funding from the American Rescue Plan Act.
Gray delivered his recommendation to Austin City Council members on Monday as they prepare for budget discussions this summer.
The cost of a solution
The council has said addressing homelessness is a top priority. Members passed a resolution in January aimed at finding a lasting funding source and other partnerships to prioritize solutions in the upcoming 2025-2026 fiscal year budget.
“We are at a pivotal time right now in looking at how do we address homelessness, how do we ensure that we have sustainable funding in our homelessness response system and how we navigate that,” Council Member Vanessa Fuentes said.
Last year, the city set aside more than $30 million to address homelessness, but Gray said it's going to take more than double that each year to enhance existing programs that provide assistance to people living on the street and increase the number of shelter beds and other permanent housing options.
The additional money would also replace the $15.65 million of COVID-era funds that will end this year. The COVID-era money is currently used to operate the emergency shelters, transitional housing programs, rehousing programs and street outreach initiatives.
Finding the money
With little wiggle room in the budget, and federal grants not guaranteed, the city will look to taxpayers for help make up the difference.
"There is only one method to get that money, which would be to ask taxpayers to foot that bill," Council Member Ryan Alter said. "We can't raise our sales tax rate, we can't raise fees to do that. We would have to ask taxpayers to invest in our community and in this priority."
But the city can't do it alone. Local nonprofits play a large role in addressing the homeless population, but they also benefit from city grants. Leaders of these nonprofits, including Jo Kathryn Quinn, president and CEO for Caritas of Austin spoke during Monday’s meeting, urging the city to invest more money for their programs so progress can continue.
“We recognize that without sustainable, predictable funding our community’s efforts to effectively strategize are hobbled,” Quinn said.
Over the last several years, Austin and Travis County have made strides around permanent supportive housing projects, opening and continuing to operate emergency shelters and fund other programs that help prevent homelessness, including rental assistance.
The city expects to add an additional 1,000 housing units to its overall capacity by the end of 2027.
But homelessness isn't the only issue the city is trying to solve. It is also focused on improving public safety, which takes up about 63% of the budget.
The city is set to start discussions in July with adoption of the final budget expected in August.
