Samsung-Adjacent Affordable Housing Complex Is Probably Not Cheap Enough for Factory Workers

A rendering of Parmer Gateway, a half market rate, half affordable complex right beside the Samsung chip factory (Courtesy of LDG)

A new affordable housing development adjacent to the massive Samsung chip factory will bring 537 units to Northeast Austin in the next two years.

It’s part of an attempt to soothe the burn of Austin’s scalding housing crisis. But as is often the case, the “affordable” units aren’t as cheap as you might expect, and most will likely be out of reach for Samsung factory workers.

Half of the Parmer Gateway development’s units will be priced at market rate. 10% of the units will be set aside for tenants making 60% (roughly $46,000) of Austin’s median family income (MFI) for one person. The final 40% will serve Austinites making 80% ($65,450) of the median for one person. That means units in the affordable portion of the complex will be priced from $1,601 for a one-bedroom to $2,310 for a three-bedroom apartment.

Locals might find it hard to believe those numbers are “affordable.” This is how the city does its math: A popular rule of thumb is rent should cost no more than 30% of your income. (That’s often mandated by landlords, as most rental applications require that tenants make three times rent.) Based on MFI and the third-of-your-income rule, a person making 80% MFI should generally look to pay no more than $1,818 in rent. By those metrics, a $1,601 apartment is technically affordable.

But is it for the Samsung Austin Semiconductor workers next door to the complex? The project seems positioned to serve those workers. The manufacturing facility employs more than 8,700 people. Parmer Gateway is also a 10-minute drive from Tech Ridge, a neighborhood that houses multiple major tech employers including Apple and Dell. But looking at job postings for Samsung, a factory worker (process technician) can expect to make anywhere from $37,000 to $58,000 a year, which is roughly 40% to 66% of the MFI. Only the top earners in that role would find units in the Parmer price range attainable.

Justin Hartz, the executive development director of the company behind the project, LDG Development, says the units are intended for the broader workforce community of Austin. “Workforce housing residents are really your first-time teacher, your firefighter, your EMS, somebody relocating from another state for a new job,” Hartz said.

New teachers in Austin ISD and starting EMS medics both make just over 60% MFI, making them ineligible for the cheapest units. Starting pay for fire cadets is $43,680, or roughly 50% MFI, making them eligible, though rent for a one bedroom apartment would be more than 30% of their income.

A spokesperson for the Housing Authority of the City of Austin (HACA) told the Chronicle that Parmer residents could get rental assistance through federally funded vouchers. HACA gives some Austinites Housing Choice Vouchers, which cover the cost of any rent that goes over 30-40% of their income. But, in general, a family's income may not exceed 50% MFI to receive those vouchers, according to HUD. We asked a HACA spokesperson how it is possible an individual could qualify for both Parmer (designed for those making 60%-80% MFI) and federal vouchers (which require 50% MFI or less income). They did not respond.

So, it seems that a very narrow band of Austinites will be able to afford these “affordable” units. Those who can will get some services in addition to housing. LDG plans to work with Austin nonprofits to provide tenants access to supportive services like free health screenings, food pantries, and after-school programs, depending on the assessed need of the tenants. They also plan to provide residents with free wireless internet, a swimming pool, a clubhouse, and a gym.

For those interested, the process to apply will look similar to most rental applications: Once the website goes live and pre-leasing opens, you may apply online. Units are expected to be available for pre-leasing two to three months before construction ends.

* Editor's note Saturday, Oct. 18, 6:40pm: A previous version of the story incorrectly stated the percentage of MFI required to live in Parmer two affordable unit types would be 60% or more than MFI, or 80% or more than MFI, respectively. It is 60% or less, and 80% or less than MFI respectively. The Chronicle regrets the errors.