06 Aug Early efforts under way for Austin’s affordable housing ‘strike fund’
Austin Mayor Steve Adler has been meeting with potential investors for a so-called Urban Land Conservancy Strike Fund to preserve affordable housing in Austin, after getting initial startup money last year.
But what the strike fund will look like remains a $100 million question.
That number has been swirling around the music community after at least a couple of references in public, most recently from Frank Rodriguez, an Adler policy adviser who has been working on the fund.
“The mayor’s in Asia raising money for this fund, and we’re talking about — I may as well say a number — it’s over $100 million,” Rodriguez told a Music Commission meeting last month. “The idea for the fund is it will raise private equity, combined with financing that will, in turn, buy properties that can be converted into affordable spaces.”
But Adler denied there’s any set goal for the fund, or money pledged so far, saying it’s far too early. Rodriguez, asked whether the $100 million he referenced was a goal or an indication of private investment available, said it was neither.
“I spoke out of turn, because I was mentally calculating the need for affordable housing overall,” he said.
The idea for the fund is to create a private entity with its own board and group of investors to buy and maintain affordable housing. Adler’s trip to Asia last month, which officially focused on business networking, included meetings the mayor characterized as promising with “high wealth” potential investors. There is no written prospectus yet to begin formally fundraising.
Nor is it determined how the fund would be structured or how it would maintain affordably priced units. But the goal is for it to manage properties in a way that creates a return on investment, even though it would be mission-driven, like a nonprofit, Adler said. It’s not a model expected to help the lowest-income Austinites, but those slightly below median income who are being driven out of the city, he said.
He characterized the focus of the fund as preserving existing affordable housing, but he didn’t rule out the possibility of building additional housing.
“When you look at cities that are even more unaffordable than Austin — like San Francisco — they are cities that have lost that housing stock,” Adler said. “When it’s lost, it’s hard to get back.”
And there’s the idea — exciting to many in the music industry — that the fund would also be used to preserve venues from being pushed out for other development.
Musicians, artists and venue owners turned out in droves to a standing-room-only meeting of the Arts Commission last week to deplore what one man described as an “apocalyptic” potential to lose music venues. After hearing from venue owners talking of difficulty paying rent, Commissioner Matt Stillwell said he would like to ask the City Council for $350,000 in emergency venue assistance money while other ideas to help venues are in the planning stages.
Adler expects to have organizational documents and a board in place for the strike fund within the next few months, in order to begin fundraising by the end of the year.
“It’s still at a really early stage,” he said.
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