Development in Austin Creates Affordable Housing for Essential Workers

Development in Austin Creates Affordable Housing for Essential Workers

Opened in 2024, The Markson provides essential workers with affordable housing in the East Oak Hill neighborhood, just minutes from major employment centers in downtown Austin, Texas. Photo credit: NRP Group

As Austin, Texas, continues its rapid growth, the city is confronting a housing affordability challenge. Nearly one-third of the city's renters are cost burdened, spending more than 30 percent of their income on housing. The issue affects households across all income levels, and families and essential workers such as teachers, healthcare professionals, and first responders have struggled to find affordable housing without either enduring excessively long commutes or grappling with housing instability because of the expense of living near their jobs.

To address the city's need for affordable housing, Austin has implemented the Essential Worker Living Program to ensure that service workers can access stable housing near their workplaces. The program helps essential workers find affordable housing near their jobs, with participating developments offering favorable rents to workers meeting minimum and maximum income requirements. As part of this effort, developer The NRP Group (NRP) partnered with the Housing Authority of the City of Austin (HACA) to develop The Markson, a 330-unit, mixed-income community in South Austin's East Oak Hill neighborhood. The Markson opened in 2024 and is one of 8 planned developments under NRP and HACA's larger strategic initiative to create 2,300 affordable housing units across the city.

The Markson

The Markson consists of 4 four-story buildings with 330 one- to three-bedroom apartments. More than 50 percent of the units are reserved for residents earning no more than 80 percent of Austin's area median income (AMI), with the remainder being market-rate units. Each unit features modern finishes and keyless entry. The development offers residents a range of amenities, including fitness facilities, a conference room, a coworking lounge, and a game room. A fourth-floor skydeck offers residents panoramic views of downtown Austin.

Atop the 330-unit community, the skydeck provides residents with a space to relax and enjoy views of the East Oak Hill neighborhood. Photo credit: NRP Group

The site is strategically located in the East Oak Hill neighborhood, notable for its suburban character and access to green spaces, including a wilderness park and extensive trail networks. The Markson is just 5 miles southwest of downtown Austin and near major employment centers. Residents can commute to corporate campuses and mixed-use retail centers in less than 10 minutes using the Southwest Parkway.

Public-Private Partnership for the Essential Worker Living Program

The Markson was made feasible by NRP and HACA's public-private partnership, which became the mechanism for ensuring the property's long-term affordability for families and essential workers. The partnership allowed NRP and HACA to integrate the Essential Worker Living Program, which was established under the authority of a Texas statute that allows a public facility corporation (PFC), such as HACA, to partner with private developers to make constructing mixed-income housing financially viable. As a PFC, HACA ensures that at least 50 percent of the units are reserved for households earning no more than 80 percent of AMI, which allows the property to maintain its tax-exempt status and long-term affordability commitments. Overall, NRP's partnership with HACA helped reduce operating costs to allow for affordable rents in a high-opportunity area of Austin. NRP also offered 1 month of free rent to employees of the nearby St. Andrew's Episcopal School.

As the private developer leveraging the tax incentives, NRP financed and built the Markson and serves as the property manager. This financing structure and partnership made the $60 million development viable. Zions Bank provided most of the funds through a construction loan, and J.P. Morgan Asset Management and Amegy Bank were financing partners.

A Replicable Partnership

NRP seeks to build on the success of this public-private partnership model in future developments. NRP's experience in developing the Markson reinforces the importance of seeking invested partners such as HACA, the need to align local affordability priorities with state-level incentives, and the value of community engagement to ensure place-based solutions. NRP plans to apply these lessons as it moves forward with Vega II, the second phase of NRP and HACA's larger strategic housing initiative. For Vega II, NRP will collaborate with the Austin Affordable Housing Corporation to provide housing for households earning between 60 and 80 percent of AMI.