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Austin To Buy Second Hotel That Will Become Permanent Supportive Housing

The city will use funds diverted from its police budget to set up wraparound services for the people who will live at the hotel.

(Screenshot from Google Maps)

Austin To Buy Second Hotel That Will Become Permanent Supportive Housing

The city will use funds diverted from its police budget to set up wraparound services for the people who will live at the hotel.


The Austin City Council voted today to purchase a second hotel and turn it into about 80 units of permanent supportive housing for people experiencing chronic homelessness. Austin purchased the first hotel last week but delayed the vote on purchasing the second one after a city council member asked for more time to gather feedback from her constituents, as the hotel would be in her district.

Under the measure, the city will spend approximately $9.5 million from its Housing and Planning Department’s general obligation bonds to acquire one hotel and use some money from a recurring $6.5 million fund taken from the police department’s budget to provide services to the residents of the hotel. At full occupancy (which wouldn’t happen this year), services and operating costs for the hotel are expected to be about $2.2 million annually. 

“In the wake of Black Lives Matter protests this summer, we made a significant cut to policing dollars and reinvested that in things like this,” said Council Member Gregorio Casar, who led the effort to cut police funding and sponsored an amendment last August that set aside $6.5 million in recurring funding to be used for permanent supportive housing and services. “That’s how we’re paying for this. That’s the only reason we’re able to do this.”

In August, the City Council voted to immediately cut over $20 million from the police department’s budget, with most of that money coming from cancelling cadet classes, reducing overtime spending, and eliminating contracts for things like license plate readers. Another almost $80 million will be taken from the police department’s budget by moving certain civilian functions out, like dispatch and the forensics lab—though that money will still be spent on those functions, just not within the department.

The council also voted to separate the forensics lab from the police department on Thursday. About $12 million will be moved out of the police budget and will be used instead to create an independent forensics lab that is separate from the police department. The move does not eliminate any of the functions of the lab, but it does ensure that the lab is not run by the police department. Under the leadership of the Austin Police Department, the forensics lab had a decades-long rape kit backlog and was shut down after auditors found employees were mishandling evidence.

Austin will now move ahead with negotiations to buy a hotel from Candlewood Suites in District 6 for $9.5 million. The hotel was built in 2018 and has 83 rooms, all with full kitchenettes and air conditioners. The property also includes amenities like a computer room, onsite laundry, a fitness room, and outdoor patio space. Some of the current guest rooms may be converted into additional common areas or office space. The property will still provide roughly 80 units of permanent supportive housing once it’s complete.

Last week, the council agreed to buy the Texas Bungalows Hotel & Suites in District 7 for $6.7 million. The property was built in 2018 and has 65 rooms (41 with kitchenettes), onsite laundry, and a front desk with controlled entry. Some of the rooms will be converted to add more office and common space, like a community kitchen, leaving the building with about 60 permanent supportive housing units. 

The city’s Homeless Services Division will contract with nonprofit service providers to cover operating costs and set up wraparound services for residents, like case management, support for mental health or substance use issues, workforce development programs, and job placement services.

In total, the purchases will create about 140 units of low barrier permanent supportive housing with these kinds of wraparound services.

“The city’s goal has traditionally been 100 permanent supportive housing units a year, and sometimes wouldn’t even reach that. And here we are in January and we’ll blast through the goal,” Casar previously told The Appeal. “This is funding that was previously going to over-policing every single year and will now go to getting folks off the street.”

The vote on purchasing the second hotel was delayed to allow the council’s newest member, Mackenzie Kelly, to spend more time hearing from community members and businesses near the hotel, which is in her district. 

“We have a homelessness crisis, but treating every proposal as an out-of-context emergency is not great policy and silences stakeholders,” Kelly said at last week’s council meeting. “We need to provide housing to the unhoused, but we can do so in a way that creates good feelings throughout the community. … We want to educate the community on this important project and continue to get feedback.”

Kelly replaced former city council member and public safety chair Jimmy Flannigan after winning a runoff election in December. Kelly is the president of Take Back Austin, a pro-law enforcement group and has denounced the council’s move to decriminalize homelessness and pledged to bring back a ban on public camping.

Some constituents in Kelly’s district protested the hotel purchase and signed a petition voicing their opposition to the proposal, citing concerns over “safety” and that the location wouldn’t provide people with “opportunities for employment, case management, medical and mental health treatment, and access to transportation,” despite the fact that the proposal very clearly states that all of those things will be provided onsite by providers the city will contract with. A comment on the petition is more candid: “I for one don’t want any of this riff raff in my zip code.” 

About 2,500 people were experiencing homelessness in Austin at the start of last year, according to the 2020 Point-in-Time Count. Nearly 1,600 of those people were unsheltered.

“Cities that have stepped up and tried to reallocate police budgets have faced backlash usually driven by misinformation for the past few months, but I believe in the next few months cities that reallocated police funds can start showing results, can start showing what cities can do when we reduce police overspending,” Casar previously told The Appeal. “It’s only possible if we keep rethinking our priorities instead of continuing to over-invest in policing.”