Purchase of second motel for Austin homeless shelter on hold due to building restrictions


Austin (KXAN) — After much anticipation that the city of Austin would purchase a second motel to use as a homeless shelter, the council opted to put on hold the purchase because of building hurdles the property in question would present.

The property they were looking at was Microtel Inn and Suites on Metro Center Drive, near the intersection of State Highway 71 and U.S. Highway 183. It would have housed 71 people.

Austin Mayor Steve Adler expressed optimism that the council could resume the discussion about purchasing this property in January after staff has more time to look at the issues.

Matt Mollica, the executive director of Austin’s Ending Community Homelessness Coalition (ECHO) explained that the council made this decision because the property couldn’t be converted to permanent supportive housing because of building restrictions in the overlay near Austin’s airport.

The city has stated that its strategy for purchasing motels to turn into homeless shelters will be to move people into the buildings immediately and use them as bridge housing — meaning that people staying there won’t have to pick up and leave each morning as they do in other homeless shelters in the city. But in the long term, the city plans to turn these shelters into permanent supportive housing for people who have been experiencing homelessness.

Mollica said ECHO will be “on to the next one and try to find a new opportunity” for another motel that can be converted into a shelter.

Austin Mayor Adler noted that the council has “a sense of urgency” to move forward with acquiring motels to use as shelters.

“I think everybody is aligned on this and we need to get it,” Adler said. “But at this point, being as prudent as we can be, probably not best to move forward on this right now. “

This comes almost a month after the council agreed to purchase the first motel to be used as a homeless shelter: the Rodeway Inn off of I-35 and Oltorf Street. With the Rodeway Inn property, the city is allocating $6.4 million to pay for the building itself, plus an additional $1.6 million to get the building ready. In total, the city will spend $8 million on the acquisition and renovation. Those dollars will come from certificates of obligation.

ECHO plans to operate the motels-converted-to-shelters and fundraise to do so.

The decision to purchase these motels marked a shift in city approach from a previously-planned shelter on Ben White Boulevard. City officials said the hotels provided a quicker turnaround to actually get people into a shelter.

A city memo in late November shows the city plans to screen “all motels for sale within the City of Austin” to work with this strategy.

“City staff continue to emphasize homelessness as the City’s highest priority,” the memo said.

The Rodeway Inn will house more than 80 people and ECHO expects that as people transition out of the shelter, this operation could serve hundreds of people over the course of a year.

Ultimately, ECHO is willing to fundraise as many as 200 to 300 motel units as part of this effort.

Assistant City Manager Rodney Gonzalez explained at a previous meeting of the council that the city will purchase these motels and then carry out a long-term, below-market-rate lease of these properties to ECHO.

Matt Mollica, the executive director of ECHO, said last week that the cost associated with running a motel-converted-to-a-shelter with 85 to 100 housing units plus support services winds up being around $1 million per year. He said that breaks down to an operating cost of around $300,000-$400,000 per year and a cost for support services of around $600,000-$700,000.

This comes as the city continues to grapple with how to best address homelessness, with local policy efforts to do so amping up over the course of the past year.

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