KUT's Audrey McGlinchy reports that rents have gone up at apartments recently acquired by a partnership between the city of Austin and the Austin Housing Conservancy, an investment fund that former Mayor Steve Adler and a bunch of other local luminaries kick-started with the goal of preserving affordable multifamily housing. The fund is mission-driven and overseen by a nonprofit, but it's funded by investors seeking a return (albeit probably a relatively modest one).
The seven properties cost $35 million –– the city contributed $15 million.
“No one will be displaced,” James May, who works for Austin’s housing department, told community members at a meeting in July. “We are not going to raise their rent … and we are not going to make them leave.”
But the reality is quite different. At each of the apartment buildings the city and its partner purchased, residents confirmed rent went up as much as 25%, and they now owe additional fees. While tenants received notice of higher rents from the previous owner, it happened just weeks before the city and its partner finalized the purchase of the buildings. One source said the buyers told former owners to raise the rent.
I recommend you read the whole story. It shines a light on a number of issues. It's not clear to me that the rent increase itself was wrong, but certainly something is wrong.
For starters, it was wrong for a city official to say that rent wouldn't go up. Because it will have to eventually! Even a mission-driven landlord will have to raise rent simply to pay for repairs and upkeep. Furthermore, the organization's commitment is to serve tenants at a certain percentage of the area median income (AMI). For better or worse, the median income in this town is rapidly increasing.