The future of the old HealthSouth property in downtown Austin is up in the air as city officials mull over different development scenarios. In a recent city council work session, members discussed the potential of the site located on Red River and East 12th Streets for new development projects, having scrapped previous plans for affordable housing due to rising costs and market competition.
According to KVUE, four new possibilities were laid out during the Tuesday meeting. Including a hybrid scenario that might produce 445 affordable units. Alternatively, the pilot site scenario could yield 1719 units, all located off-site. Some attendees even pitched the idea of starting anew elsewhere in Austin, utilizing funds from the HealthSouth property.
Previously, the plan explored by the city was the transformation of the vacant structure into affordable living spaces, in particular for healthcare, hospitality, and service industry workers. This was supported by a city-conducted survey revealing strong public approval for more affordable housing in the downtown area. However, due to financial challenges, the city is considering postponing any decisions on the property until later in 2024, as per the information shared by KXAN.
A closer look at the discussed options reveals the hybrid model's promise of on-site and off-site affordable housing. In contrast, the downtown density bonus site wouldn't offer any on-site affordable units but could support about 1589 off-site ones. Other scenarios include a model similar to the Rainey Street bonus program, generating funds to support about 1331 off-site affordable housing units. Notably, the "pilot" option boasting the most substantial estimated public revenue of $330 million could bankroll up to 1719 off-site affordable units.
With the city's property market becoming increasingly competitive and construction costs on the rise, city staff is urging the council to pump the brakes. Taking time until the city is more informed about the fiscal 2024-25 budget and market conditions might be wise. No final decisions on the former HealthSouth building have been made, and discussions are set to continue into the summer or fall this year, thus adding another chapter to the site's ongoing redevelopment saga.
