Ambitious, multimillion-dollar plans to renovate and expand San Antonio’s oldest public housing complex are now on hold due to a lack of funding, according to local officials.
Opportunity Home San Antonio, the local federally funded housing authority, will not be getting a planned $8.2 million from the city’s housing bond to build an additional 88 apartments at Alazán-Apache Courts, officials told the San Antonio Report this week.
The expansion was a key part of the $112 million master plan to renovate the 87-year-old housing complex, which is now paused, said Gabriel Lopez, chair of Opportunity Home’s board.
The housing authority missed a May 31 deadline to start construction on the expansion project and failed to secure financing for the remaining $18 million required to receive the municipal bond funding, leading to the forfeiture of the housing bond dollars.
The project will remain paused “until we can figure out how to pay for it,” Lopez said, adding that discussions with local stakeholders, including Councilwoman Teri Castilo (D5), about possible federal funding mechanisms have stalled.
The city plans to re-open the $8.2 million in funds originally allocated to the Alazán expansion to new bids to build affordable rental homes later this year, Veronica Garcia, director of the Neighborhood and Housing Services Department, said in a statement.
An additional $850,000 for the Alazán expansion in federal funds secured by Congressman Greg Casar was also forfeited, said Michael Reyes, Opportunity Home’s acting president and CEO, who took over the troubled agency in June.
Despite the setback for Alazán, the housing authority is focused on turning its attention to other worthy projects, he said.
“We’re going to try to preserve as much affordable housing as possible,” Reyes said. The agency will start to work on other redevelopment plans across its public housing inventory. “If there’s no political support for Alazán, we can’t just let the others wait in line. So we’re going to move on.”
Even if the construction deadline to secure the city bond funds was reached, which he said would have been nearly impossible, the housing authority could not have afforded the expansion’s remaining $18 million cost.
Previous CEO Ed Hinojosa had said that money would come from a specialized federal fund, but the U.S. Department of Housing and Urban Development told Opportunity Home that money could not be used for the Alazán expansion because it would further concentrate poverty in the West Side, Reyes said.
“It was only Ed who believed that there was a way to go around it, but we all knew that there was no way that we can use [that] money for construction,” he said.
Besides that, those funds need to be used to cover the organization’s operating deficit for public housing — which grew under Hinojosa’s leadership, Lopez noted. The agency is still facing a more than $18 million deficit, he said.
But Castillo, whose district includes the West Side apartments, and other public housing advocates said the project was intentionally “defunded” in order to benefit private developers.
The $18 million to fill in the Alazán funding gaps was approved by the agency’s board as part of its operating and capital budget earlier this year, Castillo said.
“The Alazán expansion has been de-prioritized and is now being defunded by the current CEO and board,” Castillo said, “which is not surprising based off of the rhetoric I’ve heard from the CEO, but disappointing that there’s not a serious commitment to address the City of San Antonio’s housing issue.”
Lopez and Reyes rejected that perspective.
“There is no defunding when you never received the funding,” Lopez said. The project was “a non-starter before it even started.”
Reyes, who grew up in Alazán, said the agency has to make decisions considering the entire system of public housing in San Antonio, not just one project.
“If we were to move that money from public housing [to Alazán], the entire department would not be funded,” he said. “It’s clear that would be irresponsible.”
501 units affected
Housing advocates criticized former CEO David Nisivoccia, Hinojosa’s predecessor, for using public-private partnerships to produce mixed-income housing while reducing the public housing stock. They then praised Hinojosa for canceling the agency’s plan to do just that at Alazán-Apache Courts.
There are 501 units in the historic cinder block complex. Because the apartments, built in 1939, are much smaller than modern standards, Opportunity Home planned to increase square footage per unit, upgrade appliances and construct taller buildings.
This summer, the agency started looking into the logistics of using a financial tool offered by HUD to fill budget holes across its public housing portfolio. The Rental Assistance Demonstration (RAD) program allows housing authorities to leverage public and private debt and equity to reinvest in the public housing stock, according to HUD.
Under RAD, housing authorities can turn a public housing unit into a Housing Choice Voucher (commonly known as Section 8) property and take out loans to renovate and modernize those units while keeping rents at just 30% of a tenant’s income — just as they are at Alazán and other public housing projects across the U.S.
The agency could also blend RAD with other voucher programs, Reyes said.
“Are they perfect? Absolutely not,” he said. “But those are the remaining options. There’s no magic bullet here.”
But Castillo and housing advocates are dubious of RAD and other HUD-recommended funding tools that aim to decentralize poverty.
“RAD is the worst,” said Kayla Miranda, who lives at Alazán and is a housing justice advocate with the Esperanza Peace and Justice Center.
Miranda said tenants may not have the same protections under RAD and could be subject to additional fees. Castillo is concerned that a move to RAD would put current tenants at risk of displacement — one of the reasons why community was opposed to demolishing Alazán in the first place.
Reyes said there are some valid concerns about how a new funding model could be implemented, but wants to work with the community to find a solution.
“That’s where we can be creative,” he said.
Castillo suggested that the city work with the San Antonio Housing Trust and develop a tax increment redevelopment zone to fund Alazán’s renovations.
Those alternatives aren’t feasible, Lopez said, because they wouldn’t generate enough revenue to maintain public housing long-term.
“We gave options to Councilwoman Castillo,” he said. “She said no.”
Meanwhile, Opportunity Home still has $16.7 million in bond funding, Garcia said, for “seven active projects dedicated to rehabilitating existing rental housing communities and creating homeownership opportunities for San Antonio individuals and families.”
The agency has been “working non-stop” over the last few months to secure financing for those, Reyes said. “We are caught up with most of them. But Alazán … there was no way.”
