Some San Antonio City Council members said Wednesday they had reservations about proposed changes to two of the City’s development incentive programs, but most agreed that – while not “perfect” – the changes struck a balance between incentivizing economic growth and supporting the city’s affordable housing goals.
The changes include restructuring and expanding tax rebates and fee waivers for housing and commercial developments outside the city’s urban core and exclude the most expensive housing projects from incentives. The policies, aimed at increasing downtown housing stock, have been on pause since December 2017, when Mayor Ron Nirenberg called for a review amid community concerns about the affordability of housing being built downtown.
Nirenberg said he doesn’t want to see the vote delayed.
“[Approval on Thursday means San Antonio can] continue to see the revitalization of the urban core but provides for a more clearly defined policy that prevents displacement and where displacement occurs provides programming and relief,” he said.
Councilman Rey Saldaña (D4) called for a delay of Council’s vote on the changes, slated for Thursday morning, to give the community a chance to fully understand what’s being proposed and perhaps make tweaks to incentive requirements. Councilwoman Ana Sandoval (D7) echoed that concern and Councilman John Courage (D9) said he doubted the proposal would effectively promote affordability.
“We’re pretty close to a policy that meets our objectives,” Saldaña said. “I’m understanding it and I think that’s important, but I think the gold standard is for the public to get a good understanding of what we’re voting on, too.”
Luxury units, those for sale at a price above the Federal Housing Administration’s loan limit (currently $359,950) or rental housing with average rents above $2.75 per square foot, would not be eligible for incentives under the new rules. Roughly $360,000 doesn’t sound like anything less than luxurious, Saldaña said.
Other Council members shared some concern but ultimately said it was time to move forward on enhancing the incentives that were created to spark economic development – not cure the affordable housing problem in San Antonio.
“It’s not a perfect policy, but it’s a step forward,” said Councilman Roberto Treviño (D1), whose district includes downtown. “We have to tackle [affordable housing] from different perspectives.”
He noted that this is the second time Council has been briefed on possible changes to the incentives and that there have been enough public meetings.
But there has yet to be a public input meeting that’s completely dedicated to the topic, Sandoval said. “[I’d like to see] at least one more public meeting … where we can actually have dialogue.”
The Center City Housing Incentive Policy provides fee waivers, tax abatements, and low interest/forgivable loans for multifamily projects in the urban core. The new rules would place three tiers of requirements for affordability of those projects in certain areas and allow projects outside the urban core to take advantage.
Twenty-five percent of the increased tax increment paid by the developer of a CCHIP project will be put in an affordable housing fund that will support the City’s home loan gap financing program, said Lori Houston, assistant city manager. The City’s Neighborhood and Housing Services Department will research and monitor the incentive’s impact on surrounding neighborhoods and issues of resident displacement – direct or indirect.
“A project that directly displaces residents will not be eligible for incentives,” Houston said.
Properties within 0.91 miles of the Central Business District fall into Tier 1. More incentives would be given to projects including an affordability component, but affordability is not required to receive CCHIP incentives, Houston said.
A completely market-rate project could also receive incentives in Tier 2, she said, but it must be more than five-stories tall or have 10 percent of housing units that are for families making 60 percent of area median income (AMI) and 10 percent committed to families making 80 percent of AMI.
Tier 3 would require 20 percent of units committed to families making 60 percent of AMI and be limited to 13 regional centers and VIA transportation corridors.
The new Inner City Reinvestment Infill Policy would be renamed the City of San Antonio Fee Waiver Program and be available for projects citywide as long as they are used for affordable housing, owner occupied rehabilitation, historic rehabilitation, or small or legacy businesses.
COPS/Metro Alliance, a community advocacy group, held a press conference Wednesday before Council was briefed on the proposed changes by City staff to call for a delay of the vote It also sent a list of actions that leaders believe should be taken before the policy goes to a vote including: an impact study on rent and property taxes in areas surrounding CCHIP projects, a clearer definition of the affordable housing fund and programs that 25 percent of CCHIP tax would be used for, focusing on housing for families that make 60 percent AMI rather than 80 percent, and removing the building height criteria.
“The [latter] provision allows developers to receive generous tax rebates while creating zero affordable housing units in vulnerable neighborhoods,” according to a COPS/Metro Alliance press release.