Austin apartments get some bailout money

From the Austin City Council that is.

The Austin City Council agreed to use $710,350 in bond money to lower some rents at an apartment project planned for South Austin. The city has invested about $800,000 into the project. They also gave the developer, Post Properties, a public street, valued at close to $300,000.

In April 2007, the council agreed to use bond money (and $397,000 in waived fees for infrastructure and engineering costs) to "buy down" the rent of 30 apartments to about $666 . The council said they wanted to see lower-cost housing dispersed citywide and not just relegated to East Austin.

Then this summer, Post asked for $800,000 more, saying it couldn't lower the rents without it. In negotiations, Post backed off that request and asked instead that the city waive provisions about tenants' rights and Section 8 clients, city Housing Director Margaret Shaw said.

The apartment project will replace the older, low-rent Stoneridge apartment complex on South Lamar Boulevard. It used to cost about $600 per month to live at the Stoneridge Apartments, what many consider the last affordable apartment complex near downtown.

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All in all, seems like a good deal for the developers. If the waivers are permanent, I don't think there is anything stopping them from asking for more money later and saying they will have to raise rents if they don't get it.

It is not known when the project will be completed. So at the end of the day, the city has spent a million dollars to get 30 lower than market apartments at some undefined time in the future. Good deal if you can get it.