The entity that works to boost affordable housing in Bexar County made a move Tuesday to secure three projects ahead of changes that state lawmakers have proposed to the incentive program.
Bexar County commissioners who serve as directors of the county’s public facility corporation (PFC) passed resolutions to approve several deals made between it and private developers seeking to build affordable housing in San Antonio.
The resolutions are meant to ensure that the agreements will be governed by existing law rather than any future changes to the law, said Andy Cohen, an attorney for the PFC.
Under Texas law, a PFC allows developers to partner with a public entity to build multi-family “workforce” housing.
Developers receive full property tax exemption for the duration of the 75-year lease in exchange for committing to rent half the units to people who make up to 80% of the area median income, or AMI, which for a family of four is $57,600.
But critics have argued PFC programs are used more to line the pockets of developers and several bills have been introduced to limit them.
Bexar County’s first such PFC agreement was approved in June 2021.
Developer Weston Urban’s Continental Hotel project is a 290-unit multifamily development situated between the Continental Hotel and the Arana building along the San Pedro Creek Culture Park. Construction is set to begin later this year.
When complete, it will offer half of the units at affordable rates outlined by the PFC. Up to 20% of those will be available to people making 60% of the AMI, and all affordable units will not exceed 30% of a renter’s income.
Other PFC agreements approved last year include a deal made with the developers of the Tower Life Building, 310 S. St. Mary’s St., and San Jose Village, located at South Laredo and West Commerce streets.
But a bill now making its way through the state Legislature could change some of the terms and provisions of PFC agreements, including increasing affordability requirements and reducing the tax exemption period.
PFC developments would be required to offer 40% of the units be at 80% of the area median income, with an adjustment for family size, and that 10% of the units be offered at 60% of area median income.
The bill also proposes to limit the full property tax exemption period to 60 years instead of 75.
In addition, it would require PFC deals to be approved by each of the property’s taxing authorities, including school districts.
But House Bill 2071 also has a provision that allows for agreements made prior to the effective date of the new law to be governed by the existing provisions in the law, Cohen said.
The purpose of the resolutions was to say, “they’ve been working on these deals for two years so they would be operating under that existing set of rules,” he said.
“Because when [developers] try to put together a pro forma and try to get financing and equity lined up, you have to have all your expectations clearer on what the affordability would be.”
The legislative session ends Monday, however, and the terms in the PFC reform bill could still change as both chambers work to come up with a final version.
With little discussion, commissioners unanimously approved each of the resolutions authorizing the PFC to finalize the agreements.
At the start of the PFC meeting, Bexar County Judge Peter Sakai asked for a moment of silence to remember the victims of the May 24, 2022, shooting at Robb Elementary School in Uvalde.
Also during the meeting, Sakai was elected president of the PFC to replace former County Judge Nelson Wolff.
