For the first time in San Antonio’s history, the city is slated to directly fund affordable housing projects through its five-year bond program.
When city officials floated a $250 million housing portion of the $1.2 billion 2022 municipal bond to City Council on Wednesday, most elected officials were generally supportive.
There are about 95,000 households in Bexar County that spend more than 30% of their income on housing, which is considered an unsustainable burden, Assistant City Manager Lori Houston told the council on Thursday.
“We can help them, and there are two ways we can help them,” Houston said. “One, we can increase their income, or two, we can facilitate the production [and preservation] of more affordable housing in this community.”
The ability for the city to directly fund the construction of affordable housing with bonds comes from a recent change in the city’s charter, approved by voters in May. That charter change and the city’s proposed investment of $500 million over ten years, split between the 2022 bond and the 2027 bond, follows the housing strategy Council approved in 2018.
The city included $20 million in its 2017 bond, but that money could be used only to purchase property and facilitate private sector development. Now, the city can directly pay a developer or a housing provider to produce affordable housing, as well as pay for home and apartment repairs.
Nearly 600 units, four separate multifamily projects, are expected to be completed through that bond program starting in 2022, according to the city.
Ultimately, it will be voters who decide whether to fund hundreds of capital projects — including housing, streets, drainage, and other infrastructure — on the May ballot next year.
Housing strategies in the bond and beyond
The city has proposed several strategies to increase incomes and the area’s housing stock to help those 95,000 households. Some are outside of the bond process, such as connecting residents to job training as well as state and federal benefits.
With coronavirus relief funds, the city established the job training and education program Train for Jobs SA, and a voter-approved sales tax will broaden that initiative under the moniker SA Ready to Work.
The city would like to enroll as many as 24,000 of its target 95,000 households in Ready to Work, but that effort may not be a slam dunk; enrollment in the city’s initial effort has fallen short of its enrollment goals, while the taxpayer-funded effort has been delayed.
Another strategy is to make it easier for developers to create naturally occurring affordable housing without incentives or subsidies by removing construction barriers through the Unified Development Code. That amendment process is currently underway.
Through private-sector production, assistance programs, and job training, the city estimates that nearly two-thirds of its target population could be helped.
The preservation and construction of affordable housing could help the remaining households. Preservation is just as important as production and can be less costly, Houston said.
Using bond funding, the city proposes preserving low rents and affordable homeownership for households that earn less than 50% of the average median income (AMI) by financing improvements in affordable housing units and extending federal affordability agreements that keep rents low, Houston said.
Bond money also could be used for owner-occupied home rehab, with an agreement that the home couldn’t be sold or must remain affordable for a certain time period.
Over 10 years, the city wants to produce or preserve — by working with private developers and nonprofit groups — nearly 13,000 affordable homes and more than 15,000 rental units.
The city also wants to use bond funding to hire developers to build rental units for households below 50% AMI and produce homes for residents earning between 80% and 120% AMI to purchase. The AMI for one person is $51,900, making the 50% AMI $25,950.
The priority should be to meet housing goals for lower-income residents, but San Antonio needs market-rate housing as well, Houston said. “If we do not continue to keep up with the demand for market-rate, … we’re going to have our affordable housing supply convert into market rate to meet that demand.”
Housing 1,000 homeless
Another first-of-its-kind initiative proposed in the bond is to use some of the money for site-based permanent supportive housing, meaning housing that has on-site medical care and other assistance for people who have experienced homelessness. This could include on-site physical and mental health, employment, addiction, and nutrition services to build independent living skills.
A study performed by the Local Initiatives Support Corp. in San Antonio demonstrated a need for 1,000 such units, which is included in the goal of 28,000 total units preserved and produced, Houston said.
There is an “incredible” need for this kind of housing in San Antonio, said Katie Vela, executive director of the South Alamo Regional Alliance for the Homeless.
The only example in San Antonio right now is under construction on the East Side. The Towne Twin Village will house more than 200 people 50 years or older who have been homeless.
There are roughly 500 people throughout the year who experiencing chronic homelessness in Bexar County, while thousands more find themselves more temporarily without a home of their own, Vela said.
The term “permanent” can be a misnomer, Vela said.
“It may be that some people only need two or three years,” she said. “But the important part is that you’re not just arbitrarily saying, ‘On this certain date, you no longer have a place to live.’ It’s something that feels permanent and gives that sense of safety and security so that you can truly work on the other things that you need.”
An amenable City Council, for the most part
While what ultimately makes it into the bond likely will change based on council and community input, most council members expressed support for this first $250 million investment in affordable housing.
“Investing in our neighborhoods is going to be critical,” said Councilwoman Adriana Rocha Garcia (D4).
Councilman Mario Bravo (D1), also voiced his support but said the city should make sure it’s spending that money wisely, and he called for a review of how the city has used incentives and other funding mechanisms in the past.
Councilwoman Teri Castillo (D5), said she would like to add homeownership opportunities for residents who earn less than 80% AMI to the bond. As proposed, the bond would fund housing construction only for residents who make 80%-120% AMI, or $41,550 to $62,250 for an individual.
“If we look at the role of property ownership and wealth building, we need to ensure that our most vulnerable families and those at 80% and below also have that opportunity” to buy a home, Castillo said.
Councilman Clayton Perry (D10) was the only council member opposed to the proposed housing bond. He would rather see more money used for street maintenance, he said, because that’s what his constituents want.
Councilman Jalen McKee-Rodriguez (D2) said affordable housing emerged as a top priority for his constituents who participated in a recent budget survey.
“I feel like the bond is our opportunity to build what is currently not being built,” McKee-Rodriguez said. He echoed Castillo’s concerns over the higher income threshold for homeownership opportunities.
Councilman John Courage (D9) said the council and community must understand the specifics of what the money will fund: how many houses, apartments, rehabilitations, etc., so everyone understand the money won’t be going “down a black hole.”
How the bond sausage is made
This month, Mayor Ron Nirenberg will appoint three tri-chairs to oversee five bond committees (streets and sidewalks, drainage, parks, municipal/public safety facilities, and housing) and two co-chairs for each of those committees. Each council member will appoint three residents to each committee by Oct. 13.
Most committees will begin hosting public meetings, during which the public can comment, starting in late October to fine-tune the project list.
The housing committee, however, will have a November start date, after the Strategic Housing and Implementation Plan has been approved by stakeholder groups, said Assistant City Manager Rod Sanchez.
The SHIP, as it’s called, is the implementation plan for the housing strategy that was approved by the City Council in 2018. It outlines timelines, partners, specific action steps, and funding approaches to achieve the city’s affordable housing goals.
Council will have another opportunity in January to make changes to each bond section before it votes to send the package to local voters in May.
“I’m looking forward to getting into the heart of this with my colleagues and with the community,” Nirenberg said after council’s discussion. He urged residents interested in sitting on a bond committee to reach out to their council member.