Easing the rent burden
In a 2019 survey commissioned by the City of Austin, local residents cited affordable housing as one of the city’s most pressing needs. That need comes against the backdrop of rental rates and home prices that remain the highest among the state’s four biggest metro areas.
A newly formed real estate development and investment firm based in New York City hopes to put a dent in Austin’s demand for affordable housing.
Alicia Glen, founder and managing principal of MSquared, says her firm wants to get a mixed-income, mixed-use project underway in Austin sometime in 2021. The development — with apartments available across a range of rental rates — would be aimed at tenants like nurses, police officers, teachers, retail employees, service workers, and musicians.
“Austin strikes me as a place that’s incredibly cool and has so much going on, and it’s such an interesting, diverse population, but it’s also exploding,” Glen tells CultureMap. “So building more housing and building housing for a variety of incomes and for businesses … is really key for Austin to continue to be such a cool, progressive city.”
Glen hopes MSquared’s Austin project can help “future-proof” the city.
“The more folks who flood into the city, the more it’s going to jack up the rents unless you figure out how to build more [housing] supply and build it in a way that serves a diverse population,” she says. “Already, a huge number of people in Austin are rent-burdened, but unless the city actively invests and developers and investors actively invest [in affordable housing], it’s only going to get worse.”
A site for MSquared’s first local project hasn’t been picked, but Glen says the firm is considering potential spots in East Austin and South Austin. If Austin voters approve a proposed ballot initiative that would set up three new light-rail lines throughout the city, MSquared would look at sites along those transit corridors, she says.
MSquared plans to work with government officials, developers, and investors in Austin to get the firm’s mixed-income, mixed-use project here off the ground. Glen says the project — envisioned as roughly seven to nine stories — would feature at least 100 apartments but ideally would contain at least 200.
The firm also is targeting cities like Dallas, Atlanta, Boston, and Charlotte, North Carolina, for mixed-use, mixed-income developments.
Aside from apartment renters, MSquared’s mixed-use projects would include affordable space for small businesses, manufacturers, artists, and nonprofit organizations. Each project will seek to capitalize on transit-oriented development strategies and green building practices.
“Austin in many ways exhibits a lot of the challenges and opportunities of what our business is really focusing on,” says Glen, former deputy mayor of New York City in charge of housing and former head of the Urban Investment Group at investment giant Goldman Sachs.
Austin and other cities around the country “are fundamentally transforming” from what had been affordable places for people and businesses, she adds, into places that are experiencing “a sense of dislocation and lack of affordability that could fundamentally undermine” what makes them great.