Budget work session on homelessness spending shows gaps in funding

City Council Member Vanessa Fuentes requested a briefing to help her and other Council members understand the intricacies of funding shelter for Austin’s homeless population. She said it was clear from town hall meetings and budget hearings that Austinites are concerned about people without reliable places to stay and the city’s response to the problem.

At the end of Tuesday’s nearly two-hour work session, it was clear that the city has not yet allocated the funding that would be needed to house all of the city’s unsheltered people and those on the verge of becoming homeless. It was also clear that would be a very expensive proposition.

Budget Officer Kerri Lang explained to Council that the projected overall budget for the Homeless Strategy Office for Fiscal Year 2025 is $30.3 million. Operating several homeless shelters, including some for periods of cold weather, is projected to cost the city $13.8 million. The Rapid Rehousing program, which quickly moves people experiencing homelessness into housing while providing time-limited support, is projected to cost the city $4.5 million. Fuentes, Council Member Ryan Alter and Mayor Kirk Watson have all suggested budget amendments to increase the funding for that program.

The Homeless Strategy Office projects spending $6.3 million for permanent supportive housing and lesser amounts for funding services such as child care vouchers, support for the Ending Community Homelessness Coalition, or ECHO, and general operating funds for the office.

Lang pointed out that the budget does not include $2.8 million necessary for funding the Northbridge and Southbridge shelters for unhoused people. In addition, she said the city would need an additional $2.6 million to continue funding permanent supportive housing services at the current level. As for Rapid Rehousing, Lang said the city would be using $2.5 million in federal American Rescue Plan Act funds for 2025.

In response to questions from Fuentes, Gary Pollock of the Homeless Strategy Office said the program currently has the capacity to serve 1,369 clients. He said Rapid Rehousing costs the city about $35,000 per person and said there is a gap of 1,731 rapid rehousing units in the system. Lang told Fuentes that in order to fully fund that program, the city would need to spend $60.6 million over 12 months.

“We can’t do all this,” Fuentes responded, noting that was one of the reasons for her recent post about adding funds to the Homeless Strategy Office budget.

On the City Council Message Board, Watson said he would be offering four budget amendments, including $4.2 million for Permanent Supportive Housing support services and more than $2.8 million for bridge/emergency shelter. Alter said he would support those two amendments. Watson also will introduce an amendment for the EMS downtown area command, which is projected to cost about $1.8 million, and to add animal services adoption and foster coordinators for about $200,000.

Alter posted a lengthy list of budget amendments he would like to see, including several related to services for people without homes. One of those amendments would add $1,176,865 for homelessness prevention. His co-sponsors include Fuentes and Council members José Velásquez, Chito Vela and Zo Qadri.

He wrote, “Prevention is the most effective and cheapest way to serve individuals who experience homelessness. Last year, 681 households received prevention services from 11 different agencies, and the successes were on the level of permanent supportive housing – with 97% of households staying housed – at less than a tenth of the cost. These services include temporary direct financial assistance (rent, mortgage, utilities), landlord mediation, and problem-solving case management (housing stabilization plans, financial literacy, debt reduction, legal services, and behavioral health assistance). This amendment would provide this assistance to 500 additional households in Fiscal Year 2024-25, to keep them in their homes and avoid more harmful and costly results of falling into homelessness.”

Council Member Alison Alter said the city is falling behind in taking care of people who lack reliable housing, partially because community philanthropists have not stepped up to the challenge. Alter said, “Every time we step in, it becomes more on the city and less of a community effort.” She said if the city is not careful, this item could “take over our entire budget and we need to be mindful of that.”

Council Member Mackenzie Kelly did not attend Tuesday’s work session. The mayor said she was absent because of a family medical emergency. Unlike her colleagues, Kelly has called for eliminating any property tax increase. In her detailed proposal, she suggests increasing city revenues from its properties, eliminating raises for Council members and giving only lower-paid employees the recommended 4 percent raise. She says the latter idea could save the city more than $1 million. Her news release says, “With growth in revenue from new development, sales tax, transfers, and other revenue sources, the city’s General Fund has more than $45 million in revenues for increases to department budgets without having to raise property taxes. The budget from the city manager proposes to increase property taxes by an additional 5.7%.”

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