City Council Postpones Plan To Buy Another Hotel To House Homeless Austinites

Dec 10, 2019

The Austin City Council delayed a $7.8-million plan to buy and renovate a Montopolis-area hotel and retrofit it to house Austinites transitioning out of homelessness. Council members are expected to take up the proposal at a meeting in January.

The 71-room hotel off Riverside Drive near U.S. Highway 183 would be run by Ending Community Homelessness Coalition, which would also fund services and operations. At their meeting Tuesday, council members expressed concern over the nonprofit's ability to raise money for the project, as well as a similar one at Oltorf Street and I-35.

The two projects would provide what's called bridge housing, meaning residents would not be required to participate in case management or substance abuse or mental health treatment – though services would be provided on-site. ECHO would be responsible for raising money to run the sites and contract for services, while the city would pay for the properties. 

The purchase of hotels is part of a larger strategy to house people more rapidly. The city wants to ultimately convert the properties into permanent housing.

ECHO Executive Director Matt Mollica told KUT the Montopolis property's proximity to Austin-Bergstrom International Airport could complicate that plan, however, because city rules limit residential properties around the airport.

"My understanding is that it doesn't allow for residential [zoning], which if we were ever to turn this into permanent supportive housing, which is our goal," he said. "It can be used for bridge housing, but it can't be used for permanent supportive housing." 

A city spokesperson said that snag likely would have come up whether the project was approved or not.

The city estimates it would cost roughly $2.2 million a year to run both properties. Before the decision to postpone, Assistant City Manager Rodney Gonzales suggested the city hold off until ECHO raises at least a quarter of the money needed to operate the sites through next year.

He said if that fundraising fell through, however, the city could use money from the $250 million bond passed in 2018 to convert the two hotels into affordable housing.