$2.6M of Austin’s unused federal dollars proposed to go to homeless supportive housing

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The city of Austin agreed in November 2019 to purchase the Rodeway Inn off of I-35 near Oltorf to be used as a homeless shelter and eventually as permanent supportive housing for people experiencing homelessness. (KXAN/Alyssa Goard)

Austin (KXAN) — During the COVID-19 pandemic, some City of Austin departments aren’t just facing challenges with not having enough money to spend, the pandemic may also mean certain funds don’t get fully used.

Austin’s Neighborhood Housing and Community Development (NHCD) said that as a result of the pandemic, their team members have not been able to meet with residents who are trying to get help through the city’s home repairs program, leaving some grant dollars unspent.

The delays to the program during COVID-19, combined with additional unspent dollars from the program over the past two or three years, resulted in over $2.6 million that had been unused, explained Rebecca Giello, the deputy director for NHCD.

Those unspent dollars came to Austin through the federal Community Development Block Grant program (CDBG).

Giello’s department is now proposing allocating those unspent millions on acquiring another facility in Austin to offer permanent supportive housing for people experiencing homelessness.

Since November 2019, Austin has used a strategy of converting hotels and motels into places where people experiencing homelessness can stay. Giello noted these reallocated dollars could go to any facility which can offer permanent supportive housing, even if it’s not a hotel or a motel.

In November 2019, Austin City Council approved the purchase of the Rodeway Inn to be used as a homeless shelter. Giello said the spending of these reallocated dollars would work similarly.

Giello said the city has been “incredibly successful deploying our federal dollars in these larger sums to acquire facilities that can then be rehabbed into permanent supportive housing, which as you know is a high community and high council priority.”

Austin’s council has continually identified addressing homelessness as a top priority.

Austin’s Ending Community Homelessness Coalition (ECHO) has urged the community to scale up permanent supportive housing at this time and city leaders, including City Manager Spencer Cronk, have expressed their intent to find ways to do just that.

“We do believe that this will be successful in increasing the number of housing opportunities for individuals who currently right now do not have homes,” Giello said of NHCD’s effort to reallocate dollars into the hotel-motel conversion strategy.

This reallocation is part of the department’s action plan to apply for federal housing dollars, which will go before Austin City Council on July 30. Public comment on the action plan is open through that date.

NHCD explained that the council will have the final say in whether this is approved and that the department intends to submit the plan to HUD by August 15.

Giello noted that the budget for the home repair program is not proposed to see any decreases in the 2020-21 fiscal year or the year after.

This reallocation of $2.6 million in unspent dollars is a one-time allocation, she added.

She emphasized that the reallocation is, “just making sure because our federal funds do require that we move the dollars in a certain amount of time, to be very fiduciarily responsible with those dollars.”

“So we’re going to still do housing with them, just another activity,” she added.

The city’s housing repair program typically works with seniors and those who need technical assistance, Giello said, and the home repairs team has not been able to do their work, which often requires sitting down with clients in their homes and helping them to fill out paperwork.

“Because we’ve not been able to do that, we have seen a delay in being able to move the money,” she said.

Discussion at Community Development Commission

The City’s Community Development Commission approved recommending the NHCD action plan last week in a 9-2 vote.

But that approval came with a request that the commission receives a presentation next month on the home repairs program. The commission spent most of its time on July 15 discussing this action plan and the reallocation of dollars.

Commissioner Amit Motwani said that while he was disappointed that this carryover of funds from home repairs seemed “reactive,” he understands the city is at risk of losing the federal dollars if they don’t reallocate the unspent dollars.

“We don’t want to give money back to the feds just because we couldn’t spent it because of COVID,” Motwani said.

Commissioner Bertha Delgado, who did not vote in favor of the action plan, said she had a problem with the dollars being reallocated to address homelessness.

“I am a neighborhood president of my neighborhood that houses 5,000 residents [in] homes, a big percentage of them have been on waiting lists to get home repairs,” she said.

Delgado suggested the city should find other funds to fuel its hotel/motel conversion program.

Giello, who was also present at this virtual commission meeting, explained that the home repair program relies more heavily on local dollars than federal ones, with the bulk of all its money coming from local general obligation bonds.

She added in an interview with KXAN on Monday that funds for contractors the city uses for the home repairs program are not decreasing in the proposed budget for the upcoming fiscal year either.

Giello explained that her department does regular evaluations of where unspent funds might exist and then reallocates those to make sure it leaves “no dollars on the table.”

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