Austin could help meet its shortage of workforce housing with new townhouses, but only if the city is able to secure the necessary tax funding.

The Austin City Council passed a motion to reaffirm its approval of using tax increment funding (TIF) funding. It is scheduled to be on the next meeting’s agenda for an official decision. The Austin Housing and Redevelopment Authority will handle the application of the project, which uses tax credits.

If the city is awarded the project, Austin could see a new townhouse addition in 2017 in the Fox Point area north of Wal-Mart and east of the Village Co-op on an area of about 18 acres.

HRA Executive Director Jon Erichson and partnered with Three Rivers Community Action and previously discussed a similar option in spring 2015, but were not awarded the tax credits. If they get the tax credits this year, the area could be purchased and used for a workforce housing project in 2017, with 38 units instead of 30 as proposed last year.

Applications are due June 19, with a decision being made in October. The Hormel Foundation is providing 50 percent of the price, up to $350,000 for the purchase of the property, which Erichson said they reaffirmed they would do that again if the tax credits came through.

The HRA is asking the council to approve the use of TIF funding, depending on the following items:

• City council approval of pay-as-you-go tax increment financing district

• Purchase agreement by the Austin HRA for the Fox Point Development

• Development of about 38 town home rental units (phase 1)

• City council approval of land use changes

• Development of partners for the project

The application for the tax credits would be submitted in June and a decision would be made in October of this year.

Erichson said the process is extremely competitive and there are many things that have to come together for the project to move forward.

“About one in four get selected,” Erichson said. “We were very close last year. They’re encouraging us to apply again.”

No final decisions can be made until they know how many tax credits they are awarded.