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  • Writer's pictureAndy Hogue

Police Cuts and ‘the PSH Push:’ The Near-Forgotten Story of Candlewood and the Texas Bungalows

Updated: Oct 19, 2023

A follow-up to a KVUE News report (6/21/22)

Two hotels undergoing renovations into permanent apartments for the homeless came under the lens of the Austin local media this week while Texas state troopers announced their return to patrol the Austin streets.

The former Candlewood Suites (10811 Pecan Park Blvd., Austin) and the Texas Bungalows (13311 Burnet Road, Austin) were the subjects of a KVUE News story by reporter Ford Sanders, following renewed concerns of graffiti and crime at the properties.

But the near-forgotten story is how the city came about finding the money to sustain the conversion of the Candlewood and the Bungalows into PSH hotels: By using funds originally set aside for law enforcement after the police budget was slashed by a third and now with the state troopers left picking up the slack.

According to the story which aired on the 10 o’clock news June 21, the City Council approved buying the Texas Bungalows property for $6.7 million in early 2021 (at three times the county appraised value) to turn it into a 60-unit permanent supportive housing (or PSH) development.

Compare to the Candlewood: the Council voted to purchase it for $9.55 million (also well-over the county appraised value) plus another $3.9 million for the contract with Family Eldercare to repurpose the building into PSH and additional expenditures for repairs following extensive damage following break-ins and vandalism. That’s nearly $15 million in all to house an estimated 70-80 residents.

Another under-reported angle is the crime the Candlewood has attracted and that the Texas Bungalows may soon begin attracting as criminal activity is on the rise in the Austin area. Wiring was stripped, flat-screen TVs were stolen, and walls were demolished as vagrants looted the vacant Candlewood, before the city paid for a security guard and set up a temporary fence. Due to law enforcement and public safety cuts, Candlewood neighbors resorted to Twitter when 9-1-1 and 3-1-1 calls were unfruitful. A nearby homeless camp grew from a handful of persons to over 80 around this time before being dispersed.

"We were seeing people throwing bikes off the fence, and they damaged our fence. There was so much going on. It took four days for the City to respond," said Rupal Chaudhari, founder of MOVE Candlewood whose family owns two adjacent hotels which share a parking lot with the Candlewood, in the KVUE story. "They [city leaders] don't talk about anything – like, who are the people [who will be living there]? Will there be any background checks? They don't talk about any of those [things], and they don't involve the community in this conversation."

Response times became so slow after the police budget cuts that Gov. Greg Abbott stepped in by dedicating State Troopers to patrol Austin’s streets. After a months-long hiatus to respond to the Texas/Mexico border, Abbott announced the troopers will return this July.


According to then-Councilman Greg Casar, the hotel purchases were made possible by the immediate availability of funds previously dedicated to law enforcement and public safety:

“This solution is only possible because of the transformation of Austin’s police budget. Although I’m disappointed that one of the two hotels was postponed today, I’m confident we can get the second one across the finish line next week. The community is calling on us to show real urgency in addressing homelessness."

While the overall homeless shelter funding picture is much wider and involves a $16.25 million bond from 2018, Casar was referencing the operations of the two hotels which indeed came from the sliced-and-diced APD budget. According to an earlier investigation from KVUE:

In August [2021], the city council approved pulling up to $150 million from APD's budget, much of which to re-allocate to other programs. More than $23 million went to "immediate reinvestment," according to a city Google [D]oc. Within that $23 million, the document shows $6.5 million would go to "Permanent Supportive Housing and Services."


The secretive selection of the hotel to purchase for PSH apartments generated immediate outrage from the public when discovered. With the Candlewood situation in particular, neighbors did not find out that the city had plans to purchase the property until it appeared on the front of the Austin American-Statesman. The owners of a hotel – and another that was then under construction in the same parking lot as the Candlewood – were shocked at not only the lack of communication but the covert nature of the plans. Proposed plans would change four times before a contract in 2023 became public.

Stop Candlewood (later MOVE Candlewood) grew out of immediate protests by residential and business neighbors, and has hosted numerous protests, forums, and panels.

On Feb. 10, 2021, Williamson County leaders (the Candlewood sits a mile or so across the Travis County line in Austin) including County Judge Bill Gravell and Commissioner Cynthia Long joined Sen. Charles Schwertner, District 6 Council Member Mackenzie Kelly (who would later change her tune and voice support for the Candlewood shelter), and deputy state Attorney General Aaron Reitz, called on the City of Austin to back off on the "bamboozle" during a press conference.

Two lawsuits were soon filed: one by Williamson County and the other by the Chaudhari Partnership which owns hotels adjacent to the Candlewood. Both lawsuits are still awaiting a hearing at the time of writing.


According to the growing number of local critics, the hotels earmarked for PSH shelters were not only far away from homelessness services but located near minority and working-class neighborhoods. So how did these sub-optimal location selections come about?

The "PSH push" in Austin dates back to a mandate from then-Mayor Steve Adler to place a PSH shelter in each of the 10 (2014-2021) Council districts. Then-District 6 Council member Jimmy Flannigan announced his selection of the Candlewood during a closed-door meeting of the Austin City Council with scant discussion of the pros and cons of his selection. It would appear not every district had a suitable property for sale for Adler’s hobbled-together proposal.

Nationally, the push for PSH hotels hails back to 2013, when the U.S. Department of Housing and Urban Development (HUD) greatly expanded the "Housing First," model. Defined as “permanent housing without preconditions and barriers to entry, such as sobriety, treatment or service participation requirements,” the PSH approach became the nation’s one-size-fits-all response to homelessness, with treatment for those experiencing homelessness a lower priority. But ample evidence has since shown that housing, in and of itself, is not the answer homeless advocates claim.


According to a 2022 study on PSH housing, in California, homelessness rose despite increases in the number of housing units dedicated to the homeless and significant state funding. Providing potentially life-long, subsidized housing is inappropriate for the majority of people who enter the homelessness system, who often deal with severe trauma and drug addiction. It ensures that nearly everyone who enters will not exit it. The approach has, in turn, fueled the affordable housing backlog in many regions throughout the country.

Perhaps this is why current Austin Mayor Kirk Watson was less than enthusiastic about PSH housing in a recent campaign email:

"Austin’s unhoused population has increased significantly in these past few years, with an estimated 5,000 people experiencing homelessness as of February [Note: estimates vary between 3,000 and 10,000]. But fewer than 900 of those individuals currently receive some form of shelter.

"The narrow approach we inherited has been to create more permanent supportive housing, almost to the exclusion of anything else. Now, more permanent supportive housing is absolutely essential. But it takes a long time to get it built and to house people in it. It can’t be all-or-nothing.

"We need to do more to address the emergency shelter needs of our neighbors living on the street right now while also ensuring they have access to connective services and housing support – and we will."

Travis County recently partnered with a nonprofit to purchase land in the southeastern portion of the county for 200 tiny homes for a modest $3 million, which is a better and reasonable solution than the Hotels.

An emphasis on PSH housing, like Mayor Watson said, may have been part of the narrow array of options Austin inherited from Mayor Adler (who, by the way, admitted his homelessness policies were designed to "disrupt" the life of Austin residents for political goals). But that does not mean the City of Austin is stuck with the Candlewood or the Bungalows.

There is still plenty of time for the Council to revoke the contracts and sell or lease the renovated properties. The revenue could be dedicated toward restoring law enforcement and emergency response staffing to a sustainable level. Revenue from selling or leasing the Candlewood and the Bungalows could also support programs that work, such as the emergency shelters favored by Watson, or to develop a Haven for Hope-model community that works well for San Antonio.

Even if PSH is still preferred by city leaders, there are alternative locations away from family residences and schools but closer to necessary services and transit lines. MOVE Candlewood previously identified the Airport HIlton, which is owned by the city, is located near many services, is away from neighborhoods and schools, and could potentially house hundreds more than the Candlewood and the Bungalows combined.

“All we ask for is consideration by the Council in coming up with an actual plan to offer long-term support to those who need it the most,” Chaudhari said. “Two-and-a-half years after the Candlewood purchase announcement, neighbors still do not want a PSH apartment near their homes and school walking paths. The facts are overwhelmingly clear that PSH is an outdated, expensive, and piecemeal solution. Rather than fight, let’s put our heads together and go back to the drawing board to come up with a better way forward.”

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