How Austin Cultural Trust is protecting the cultural community from unaffordable rents
Project: establishing the Austin Development Corporation
The Purpose
Cultural space in Austin has faced increasing pressure as new development, gentrification and growing unaffordability threaten the medium and long-term sustainability of the City’s cultural infrastructure. There is a need to secure permanently affordable cultural spaces.
The Challenge
Introducing a new city-backed real estate programme to secure permanently affordable cultural space in Austin. One of the primary challenges was navigating the dynamic real estate market in Austin, which has seen escalating prices and high demand for commercial and residential properties. The City must compete with market forces to acquire and preserve cultural spaces.
By mitigating the risk of displacement through reduced exposure to market-rate rent increases, the City is anchoring its cultural spaces firmly within the community.
The Solution
In October 2020, recognising the mounting challenges posed by escalating real estate prices, the City of Austin established the Austin Economic Development Corporation (AEDC). The AEDC’s primary focus is on implementing inclusive growth policies, functioning as a public real estate developer with a commitment to community benefit rather than profit.
Taking inspiration from models like San Francisco’s CAST and London’s Creative Land Trust, a new Cultural Trust has been established as a component of the AEDC. This Cultural Trust is dedicated to the acquisition and preservation of arts, cultural and music spaces. It can accept philanthropic donations, utilise revenue bond financing, manage private investments, and engage in public real estate and public/private partnerships on behalf of the City. These capabilities enable the Cultural Trust to respond effectively to real estate transactions in a way that aligns with market dynamics.
The Cultural Trust assumes responsibility for negotiating transactions, coordinating fundraising efforts, overseeing development projects, and managing assets related to affordable cultural and music spaces. Through acquisitions and long-term leases, the trust creates affordable venues that support artists and arts organisations while preserving historically significant and iconic cultural structures and spaces for creative and cultural purposes.
The Impact
The first round of the Cultural Trust Program Investments took place in April 2022, through a Request For Proposals (RFP) process that invited applications. The City has allocated an initial budget of $16.9 million for this pilot round. This funding comprises $12 million from the Creative Facilities Bond (2018), $2.4 million from Hotel Occupancy Tax Funds (HOT) designated for the Iconic Venue Fund, and $2.5 million from a $15 million City of Austin General Fund allocation.
The program is open to both existing spaces facing the risk of displacement and projects involving the acquisition or construction of new creative facilities. The management of these spaces will be overseen by the Cultural Trust. Eligible projects encompass live music venues, performing arts spaces, visual arts studios and galleries, non-profit arts organisations, iconic venues, and other locations where creative activities thrive.
The Cultural Trust and AEDC are pioneering a novel approach to City-led initiatives aimed at preserving existing cultural venues and establishing new, permanently affordable ones. By mitigating the risk of displacement through reduced exposure to market-rate rent increases, the City is anchoring its cultural spaces firmly within the community.
Source: World Cities Culture Report 2022
Images Courtesy @ Getty/Canva
