Type: Affordable housing fund
Date Founded: 2016
First Property Purchased: 2018
Units Acquired in First Five Years: 2,150
Value of Those Units: $400 million
In 2015, Austin, Texas’ mayor at the time, Steve Adler, brought together business leaders, real estate professionals, and housing experts to take on the rental housing affordability crisis threatening the city’s workforce stability and economic sustainability. With insights and research from a ULI Technical Advisory Panel and ULI’s Terwilliger Center, the Austin Housing Conservancy fund, a revolutionary approach to preserving workforce housing, was born. Now known as the Texas Housing Conservancy, the fund became the nation’s first to combine a nonprofit investment manager, Affordable Central Texas, with an open-end private equity fund.
Unlike traditional private workforce housing funds, which are closed-end and typically require that properties be sold within five years to provide investor returns—usually at market rate—the Conservancy’s open-end structure allows for continuous capital raising and property acquisition while offering investor liquidity without forcing property sales. The ownership structure focuses on long-term (10- to 20-year) affordability, which provides steady, low-risk returns. Rent increases are limited to the U.S. Department of Housing and Urban Development’s annual regional median family income adjustments.
In its first five years, the Conservancy preserved 2,150 units across 14 properties, representing more than $400 million in value. The portfolio serves nurses, teachers, musicians, and other households earning 80 percent and below of median family income. Beyond providing affordable housing, the Conservancy offers comprehensive resident support through its ACT Together Program, which provides financial literacy training, health care services, and educational opportunities. A partnership with Financial Health Pathways even offers residents one-on-one financial coaching with matched savings of up to $200 for a six-month period.
The financial performance has validated the model’s viability: the fund has outperformed both the NCREIF and NAREIT Residential indexes on a five-year annualized basis, returning more than 7.2 percent annually since inception. Its 67 investors include banks, foundations, family offices, institutional capital, and high-net-worth individuals, with PNC recently committing $10 million—the largest investment to date.
The Conservancy’s successes have shown that combining an open-end fund with a nonprofit manager can result in a self-sustaining financial model. Profits are shared equally between the nonprofit manager and investors. The Conservancy’s approach has earned numerous accolades, including the 2019 CommunityWINS Grant Program Outstanding Achievement award from the United States Conference of Mayors and the 2023 ULI Austin Impact Award for Next Big Idea.
Ultimately, the Conservancy aims to preserve 10,000 strategically located apartment homes within 10 years in Central Texas. Because of strong investor interest and housing needs in other metropolitan areas, the fund is expanding into such cities as San Antonio, Dallas, and Houston. The model’s success in Austin has already attracted attention from cities throughout the country, including Washington, D.C., Philadelphia, Atlanta, Charlotte, and San Francisco., which suggests a potential blueprint for addressing America’s workforce housing crisis.
