Foundation Communities seeks emergency funds and eyes coming apartment surge

By Chad Swiatecki, the Austin Monitor | Monday, January 22nd 2024

This article was originally published by the Austin Monitor. To see the original post, click here.

Affordable housing nonprofit Foundation Communities has put out the call to raise an additional $50,000 to help cover emergency needs for low-income residents at risk of losing their homes.

The group, which provides a number of support services to help people stay in their homes, experienced a rush of requests over the holiday season and needs to complete the fundraising for the $200,000 in emergency expenses budgeted for 2024.

Walter Moreau, executive director of Foundation Communities, said the beginning of each year typically sees a number of financial hardships from families dealing with end-of-year expenses.

“Probably our roughest month is January because a lot of families maybe spent too much, or I think it maybe is the season too – if they’re working gig economy and busy during the holidays,” he said. “It’s mainly families that have a crisis. They have an emergency medical situation and ended up in the hospital … or something that causes them to lose work. Even one month of rent can make all the difference to holding on to their housing and not falling behind.”

Moreau said he’s confident the group will raise enough money to cover those costs, with philanthropic giving remaining consistent even with a drop-off in multiyear pledges.

Away from the fundraising push, Foundation Communities is continuing work on two new housing projects that will provide more than 250 housing units for low-income or chronically homeless residents.

The Balcones Terrace project – a former Marriott hotel purchased for conversion with city assistance – will open this spring with 123 units, 50 of which will be reserved to serve people who are homeless. And the Parker Lane apartments in Southeast Austin on the site of the former Parker Lane United Methodist Church will complete construction this summer and provide 135 units for families.

Those units add to a surge of roughly 60,000 apartments under construction and are expected to become available in the next 18 months, which Moreau said could begin to address the city’s long-growing housing costs. An uptick in supply has combined with a leveling off of in-migration throughout 2023, causing rents to drop 8 percent through the end of last year.

“There’s new apartments everywhere. A prime location downtown might be successful at getting close to the rents that they projected, but I think some of these other locations are far flung and they’re going to have to compete,” he said. “If most of the apartments are conventional Class A, high rent but they have to run specials, then folks who can afford a middle rent and a Class B apartment have the chance to move up.”

Robin Davis, manager of apartment research firm Austin Investor Interests, said many submarkets throughout the Austin area including the northwest and south central areas have seen rents drop 10 percent or more over the past 12 months. With occupancy rates throughout the area at 89 percent, Davis said the days of 25 percent rent increases are long gone.

“Occupancy has dropped all the way down to 89 percent. That’s huge for our market. Now, again, some areas haven’t fallen as much as others, but as occupancy falls, rents follow,” she said. “We had a great influx of migration to our area with everybody from the east and the west coast, the corporate buyers, you name it. That forced rents in an upward direction and they were rising above 25 percent in some cases anyway. The in-migration to our area has dissipated and as the economy kind of slows, the area has been in a position of kind of readjusting.”

To put the coming surge in apartment supply into context, Davis said in recent years the Austin market saw about 3,000 units added over a whole year. The 38,000 expected to complete construction this year means there will be between 6,000 and 10,000 units added each quarter.

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