City of Austin Purchases Hotel to House Homeless for $6.7 Million

The Austin City Council agreed to purchase the Texas Bungalow Hotel & Suites in northwest Austin for $6.7 million. The hotel will be used to house homeless individuals.

It sits in council District 5, represented by Councilwoman Ann Kitchen. The hotel provides the city with 65 units of “permanent” housing for currently homeless individuals.

The funding for the purchase will come from 2018 Housing and Planning Department general obligation bonds.

Officials estimated the city has about 2,500 homeless residents in Austin on any given night in 2020. From 2019 to 2020, the city found an 11 percent increase in the total homeless population along with a 45 percent increase in its unsheltered count and a concurrent 20 percent decrease in its sheltered count.

The city’s July 2019 recission of its camping and laying on public ground prohibition provided an incentive for homeless individuals to move out of shelters and onto the streets. 

The council partially walked the move back a few months later, but the bulk of the policy change remains in effect. Mayor Steve Adler acknowledged the strategy is failing last week, but, he maintained that going back to the original policy will not work either.

Just before Adler’s epiphany, a petition effort by Austinites to place the camping and laying ban reinstatement on the May ballot for voters to decide announced it had secured enough signatures to meet the mark. A similar effort last year failed narrowly after the city clerk rejected a number of petitions that were below the necessary 20,000 signatures.

The final decision on the latest effort will likely be made next week.

“Going back years to where we were sending people to hiding in our woods and our streams — it is absolutely the worst thing we can do,” Mayor Steve Adler said after the council meeting.

He added, “We’re going to work with great urgency to get people off our street corners, out of tents, and into homes.”

Governor Greg Abbott has indicated his hopes to pass a statewide camping and laying ban should the City of Austin not reinstate its own.

The council also considered purchasing another hotel for the same purpose up in north Austin, in District 6. But newly elected Councilwoman Mackenzie Kelly requested the postponement of that decision to gather more community input.

“The city in a lot of ways has lost the trust of the community regarding the homeless situation,” said Kelly at the meeting “And we as leaders in our city deserve to provide them with transparency.”

Adler added Wednesday night that he expects the purchase of the second hotel to be completed in a week’s time, citing the “[clear] sentiment of what people said.”

That purchase will cost the city $9.5 million.

Back in November of 2019, the city purchased an abandoned motel to use for the same purpose.

The city’s strategy continues to be housing-focused, but that incentive to move out of shelters and into the streets remains an obstacle.

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