City Council on Thursday approved a six-month moratorium on some development incentives aimed at urban-core housing. Mayor Ron Nirenberg initiated the pause in December 2017; Council’s approval makes it official.

The Center City Housing Incentive Policy (CCHIP) was initiated in 2012 to encourage housing developments through tax reimbursements and rebates. While the incentives succeeded in adding more housing stock downtown, Nirenberg said it created some unintended affordability issues.

“There have been some unhealthy consequences of the Housing First model in its current form, which is the subsidization of housing that the general public can’t afford,” Nirenberg said. “We want a downtown for all people, and so the benching of the CCHIP is intended to help us refine the policy.”

The moratorium isn’t absolute, said John Jacks, director of City’s Center City Development and Operations department, but any incentives awarded to CCHIP during the next six months will need City Council approval.

The City set a goal in 2010 to introduce 7,500 new living units into the downtown area, Jacks said.

That goal has nearly been meant, due in part to several large apartment complexes along Broadway and the Museum Reach of the San Antonio River. The Can Plant and Cellars at the Pearl projects received more than $13 million through CCHIP, but have rental rates starting at more than $2 per square foot. 

Credit Human Federal Credit Union received a nearly $6 million incentive package to build its 10-story headquarters near the Pearl. Inspired by this and other projects, Councilman Greg Brockhouse (D6) requested a review of all City development incentive programs in October 2017. He questioned whether the City needed to incentivize more growth around the successful mixed-used development just north of downtown.

Center City Development and Operations Department Interim Director John Jacks explains how the Virtual Valet app works.
John Jacks, director of the Center City Development and Operations Department Credit: Bonnie Arbittier / San Antonio Report

“It’s good to take a step back and think,” Jacks said, adding that his department will look at which projects CCHIP incentivized and analyze its overall performance. The review comes at a good time, he added, because the program was scheduled to end in June.

On Thursday, Nirenberg acknowledged that the incentives should have been halted earlier. The review period will give Council members time to figure out if the policy can be used to create more affordable housing, if it should be moved to a different area of town, or if it should continue at all.

The Mayor’s Housing Policy Task Force, which was established in August last year to formulate policy recommendations for issues like affordable housing, neighborhood revitalization, and gentrification, will also discuss the incentive program.

City Council also accepted a $200,000 grant from the San Antonio Housing Trust to fund some of the task force’s functions on Thursday. The trust aims to provide affordable housing to revitalize neighborhoods in the downtown area.

According to the City’s grant ordinance, the funding will be used for three primary purposes: $36,000 for organizing the task force meetings, $25,500 for community workshops, and $135,000 for consultant services.

During a task force meeting on Tuesday, chairwoman Lourdes Castro-Ramirez said five technical working groups would begin their work on Jan. 23. Each of the groups has a different focus: housing for all, barriers to housing development, financing mechanisms, integrated housing systems, and building and maintaining identity in neighborhoods.

“We’ve invited well over 100 people to be involved in this process,” Castro-Ramirez said. “We have about 80 people that are eager and ready to be part of these discussions in helping us come up with recommendations.”

The task force is expected to present a formal policy recommendation to the Council in May, and Nirenberg believes its work will help determine whether or not incentives in programs like CCHIP are right for the City’s housing needs.

“The housing policy task force was created expressly to provide guidance on these issues,” Nirenberg said. “It won’t be directed by politics. It will be directed by data.”

Jeffrey Sullivan

Jeffrey Sullivan is a Rivard Report reporter. He graduated from Trinity University with a degree in Political Science.