Price tag could go up for north Austin hotel meant to house people who are homeless

AUSTIN (KXAN) -- Austin City Council could vote Thursday to nearly double the amount of money it will spend renovating a former hotel in north Austin which is intended to become permanent supportive housing for people who are disabled and have a "documented history of chronic homelessness."

The Bungalows at Century Park, formerly the Texas Bungalows Hotel and Suites, on Burnet Road will be run by Integral Care when opened. It is expected to provide 60 beds.

Of the more than $2.3 million additional dollars the city could spend on the project, $1.3 million of that would come from 2022 General Obligation bonds and the remaining $1 million would be American Rescue Plan Act (ARPA) funding, according to Jamey May, Austin's Housing and Community Development Officer.

With the additional funding, the City of Austin will spend roughly $4 million total on the renovation, according to council documents.

"The proposed renovation budget was sized to ensure that known challenges and costs for the conversion were captured. However, due to new information and exigent circumstances beyond the control of the City or the contractor, costs have increased. This is true for nearly every project currently under construction," May said.

According to council documents, those challenges that require additional funding include "exterior cracking of the façade, roof repair, previous damage from flooding, and construction price escalation."

"We want to emphasize that with the demand for Permanent Supportive Housing as acute as ever, the City has made substantial investments in the construction of new housing available to individuals exiting homelessness," May said.

According to KXAN's previous coverage, that hotel was purchased in January 2021, more than three years ago.

Pecan Gardens nearing completion

The other hotel purchased by Austin City Council in 2021 for permanent supportive housing is the former Candlewood Suites hotel, now called Pecan Gardens. That site will be operated by Family Eldercare when it opens.

As KXAN has previously reported, that project also ran into unexpected challenges and required additional funding from the city.

According to Dr. Aaron Alarcon, the CEO of Family Eldercare, that property is "very close to the grand opening."

Alarcon said they plan to move roughly 20 residents in first, which they hope to have done by the end of May. It plans to have its official grand opening in early June, if all goes to plan, Alarcon said.

Meanwhile, a group that has been vocal against the property becoming permanent supportive housing has maintained their opposition to the plan.

"We will continue to fight for our neighbors for as long as it takes," MOVE Candlewood recently said in a statement to KXAN about the property.

What is permanent supportive housing?

Unlike homeless shelters, such as the ARCH downtown or the Marshalling Yard, permanent supportive housing is intended to (as the name indicates) permanently house people by not only giving them a unit, but providing what are called "wrap around" services.

That will be true for the Bungalows at Century Park and Pecan Gardens.

"Integral Care will provide onsite support services, including case management, service coordination, living skills training, housing stability support, assistance accessing basic needs, and community building activities," council documents said of Bungalows at Century Park.

KXAN spoke with Matt Mollica, executive director of the Ending Community Homelessness Coalition (ECHO), about the need and history of permanent supportive housing in Austin while working on a longer-form piece on homelessness in Austin.

"In our community, permanent housing right now has too often looked like tenant-based housing in the private rental market and not look like enough dedicated permanent housing build by developers who have a long history in serving people experiencing homelessness," said Mollica then.

He explained that more options have come online in the last five or so years. According to data from ECHO, there were more than 1,700 permanent supportive housing units in our area as of the first quarter of 2023.

But as these city-purchased properties open up, and additional permanent supportive housing units are approved and built, it could create more opportunity for people who need those wrap around services to succeed in getting off the streets.

"That's going to really change that way that our system works. To have units that are just dedicated to this population makes a real difference in our efforts here to make homelessness rare, brief and non-recurring," Mollica said.