Posting Language
Title
Approve the Final Amendment to the Project and Financial Plan for the Extension for the 10-year extension of Homestead Preservation Reinvestment Zone Number One. Funding: This item has no fiscal impact.
Body
Lead Department
Austin Housing.
Fiscal Note
This item has no fiscal impact. The proposed amendment increases the estimated revenues and associated project costs associated with Homestead Preservation Reinvestment Zone Number One in connection with the 10-year extension of the zone; however, it does not increase the amount of property tax increment captured by the zone.
Prior Council Action:
January 11, 2007 - Ordinance No. 20070111-053:
Council established Homestead Preservation District A, the City’s first HPD under Chapter 373A of the Texas Local Government Code.
December 17, 2015 - Ordinance No. 20151217-099:
Council established Homestead Preservation Reinvestment Zone Number One (HPRZ No. 1) with a 10 percent tax increment dedicated to affordable housing. Termination December 31, 2025.
January 31, 2019 - Resolution No. 20190131-045:
Council approved a resolution increasing the tax increment for HPRZ No. 1 from 10 percent to 20 percent
March 7, 2019 - Ordinance No. 20190307-042:
Council approved the final project and financing plan for HPRZ No. 1, confirming the 20 percent tax increment set-aside for affordable housing in Districts 1, 3, and 9.
March 28, 2019 - Ordinance No. 20190328-010:
Council created the Board of Directors for HPRZ No. 1 and appointed Council as its members.
April 11, 2019 - Ordinance No. 20190411-006:
Council approved the Final Project and Financing Plan for HPRZ No. 1.
September 11, 2025 - Resolution No. 20250911-046:
Council directed an ordinance to be brought to Council for consideration to extend the term of HPRZ No. 1 an additional 10 years and increase the portion of the tax increment from HPRZ No. 1 to fund affordable housing from 20 percent to 40 percent.
November 20, 2025 - Ordinance No. 20251120-063:
Council adopted an ordinance extending HPRZ No. 1 for an additional 10 years and increasing the tax increment to 40 percent. Termination December 31, 2035, unless extended.
For More Information:
Deletta Dean, Director, Austin Housing, (512) 978-1410.
Additional Information
Purpose and Background
A Final Amendment to the Project and Financing Plan is required before any funds from Homestead Preservation Reinvestment Zone (HPRZ) No. 1 extension may be spent. The 10-year extension is estimated to generate $173.7 million, averaging $17.4 million annually, based on the updated 2026 Tax Increment Financing study and revenue projections prepared by Hayat Brown and attached as Exhibit B. During its previous 10-year term, the Zone generated $33.48 million, which supported the creation or preservation of 547 affordable housing units, including developments such as The Rebekah, La Vista de Lopez, The Ivory, and Santa Rita Courts.
The plan includes a few updates from the previous term to strengthen the Zone’s ability to fund long-term affordability initiatives. These include revised revenue projections, updated project and cost assumptions, and the addition of eligible administrative expenses under Chapter 373A.
Financial Considerations
The financing method for all estimated project costs consists of tax increment revenue generated from growth in taxable real property value within the zone, supplemented as necessary by non HPRZ affordable housing funds available to Austin Housing. The City of Austin is the sole taxing unit contributing tax increment to Homestead Preservation Reinvestment Zone No. 1. No other taxing units contribute increments to the zone. No bonds shall be issued against expected future revenues from the zone.
This financing plan is found to be economically feasible. A Tax Increment Financing Study (Exhibit B) was conducted by Hayat Brown in 2026 for HPDs A, B, C, and D. Only the portion of the analysis conducted for HPD A was considered for the purpose of this Project and Financing Plan.
Strategic Alignment
This supports “Objective 21: Fully Utilize Homestead Preservation District Tools” in the Austin Strategic Housing Blueprint <https://www.austintexas.gov/housing/projects/austin-strategic-housing-blueprint> and meaningfully contributes to the goal of fostering equitable, integrated, and diverse communities. As the Austin Strategic Housing Blueprint approaches the end of its 10-year timeline, planning for the next 10 years will incorporate the opportunities supported by this funding, using HPRZ revenue as one component of the City’s broader affordability strategy.