Could old medical building become new affordable housing complex?


Austin recently bought former HealthSouth building in northeastern corner of downtown.

Proposal by Council Member Ora Houston asks for options to convert building to affordable housing.

On the northeastern edge of downtown sits an empty four-story building that could help meet Austin’s growing demand for affordable housing.

The city recently bought the HealthSouth building at Red River and 12th streets, a facility that previously housed a physical rehabilitation center. Now some City Council members want to investigate the possibility of converting the nearly 88,000-square-foot building into apartments for low-income families.

“It, to me, was what we have talked about in this city for a long time and what this council has talked about for a long time: How do we provide income accessible housing in the center of the city?” said Council Member Ora Houston, whose East Austin District 1 includes the site. “It was like a no-brainer to me.”

Houston’s resolution, scheduled for a vote Thursday, calls on the city’s staff to investigate what sort of work would be required to transform the building from its current hospital-like layout into apartments — and to bring back possible plans, price tags and funding sources for the City Council to consider. The goal would be to provide housing for those making 60 percent or less of the average income in Austin, nearly $47,000 for a family of four in 2016.

Three council members are co-sponsoring the measure: Council Member Kathie Tovo, whose District 9 represents the rest of downtown and many surrounding neighborhoods; Council Member Sabino “Pio” Renteria, whose East Austin District 3 abuts Houston’s and Tovo’s; and Council Member Jimmy Flannigan, who represents far Northwest Austin’s District 6.

The call for the study comes three months after the City Council approved buying the former HealthSouth building and its parking garage, which sit on land the city already owns. The $6.5 million sale closed earlier this month.

“The building is adaptable to a number of uses and the land is highly attractive in the market,” according to the city staff’s analysis of the facility when it asked the council to approve the purchase. “Acquiring the property will allow the City to repurpose or redevelop the combined site and shape the future development of the Northeast District of Downtown.”

The property sits between the site of the proposed 33-story Hotel Mirabeau and University Medical Center Brackenridge, which Travis County’s hospital district plans to redevelop after hospital operations move to the new Dell Seton Medical Center at the University of Texas.

Houston’s request comes as the council faces mounting pressure to address the soaring cost of living in Austin, where the average rent hit $1,224 last year.

Fights over how to tackle the problem have become show-stopping moments on the dais. Earlier this month, council members debated and narrowly rejected a Greater Austin Chamber of Commerce-backed “affordability agenda” that included a property tax cap proposal, which critics charged would lead to cuts in city services helping the poor. Months earlier, the council narrowly approved expanding the city’s homestead exemption — but also backed a budget that increased overall property tax bills.

The council approved a resolution last year that called for dedicating property taxes from future redevelopment of formerly government-owned land to affordable housing. It also directed city staffers to study what city-owned buildings could be converted into affordable housing. A preliminary report outlining those properties was due in January, but city staffers now expect to deliver it March 31, said city spokesman Bryce Bencivengo.

In the case of the HealthSouth property, Houston’s resolution notes the site could provide affordable housing for support staff at the Dell Seton Medical Center and other nearby facilities. However, uncertainties about redeveloping the HealthSouth site remain, which supporters hope the study will clear up.

“How can we make affordable housing downtown?” asked Tovo. “This offers a lot of opportunity.”

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