AUSTIN, Texas – Austin Community Foundation announced today a $2.87 million impact investment in the form of a low-interest rate loan to SGI Ventures for Cady Lofts, a permanent supportive housing development in Central Austin. The loan allowed SGI Ventures to acquire the land before it was lost to market-rate development, and the 1.5% interest lending rate will help reduce overall costs. Without the loan from ACF, SGI Ventures would have likely turned to traditional sources of financing, potentially requiring multiple loans at 5-8% interest rates making the project much more expensive to develop.
Cady Lofts rendering (credit: SGI Ventures)
“Without this acquisition loan, it would have been very challenging to move this project forward, given the timeline for purchasing the land,” said Sally Gaskin, president, SGI Ventures. “The loan made it possible to meet our timing requirements without sacrificing the quality and design of the building and without taking funding away from services for future residents.”
Cady Lofts will be co-developed and owned through a partnership between SGI Ventures and the Austin Affordable Housing Corporation, the nonprofit affiliate of the Housing Authority of the City of Austin. Saigebrook Development and O-SDA Industries are consultants for the development. Construction is expected to begin in mid-2023.
The project will provide 100 rental units dedicated to permanent supportive housing, which targets chronically homeless individuals or those who have been homeless for more than a year and need services such as mental health, medical services, or substance abuse care. Onsite services will be coordinated by New Hope Housing and delivered by Endeavors to support residents transitioning from homelessness to stability. The anticipated opening for residents is in the winter of 2024.
“Austin Community Foundation’s investment in the Cady Lofts project continues to build the case that philanthropy has a powerful role to play in the acceleration of development and the reduction of cost in the housing ecosystem,” said Mike Nellis, president and CEO, Austin Community Foundation.
Austin Community Foundation highlighted the need for philanthropic investments to address the region’s affordable housing crisis by publishing a report last year outlining potential strategies to produce, protect and preserve affordable housing in Central Texas.
This announcement comes a few months after the Foundation announced a $4 million loan to Austin Habitat for Humanity to support the construction of 150 affordable homes for families earning between $58,000 and $118,000 a year.