After four council members shot down a controversial affordable multifamily housing project in San Antonio’s North Side last month, developers of other projects in the region scrambled to attention as $20 million in low-income housing tax credits came up for grabs.

Some elected officials and developers were concerned that the competitive and highly lucrative tax credits associated with the now-defunct project would be reallocated outside of Bexar County — but pending approval by a state agency, that may not be the case.

“We are next in line” to go after those credits, said Wallace Lee Reed V, a development consultant at Sonoma Housing Advisors.

Reed is working with Rise Residential, a Dallas-based developer that recently reignited its plans to build an 88-unit apartment complex for lower-income seniors in San Antonio’s far Northwest Side off Culebra Road in District 6.

The development as it is currently designed would need the tax credit known as the Competitive 9% Housing Tax Credit in order to be built.

If Culebra Apartments is awarded the tax credits, those credits will indeed stay in San Antonio and it will be a vindication for Councilman Marc Whyte (D10), who voted against the original tax credit project, Vista Park, planned in his district.

The developer’s tax credit application for Culebra Apartments was pulled from the waitlist and is currently undergoing a “rigorous” review by the Texas Department of Housing and Community Affairs (TDHCA). Officials confirmed that the project is, in fact, next in line.

“It’s the only eligible application remaining in the [San Antonio] subregion,” said Cody Campbell, director of multifamily programs at TDHCA. The agency’s review of the building plans and financing could take several more weeks, but Campbell anticipates knowing whether the tax credits will go to Culebra by mid-November, possibly this month.

If the Culebra project is not awarded, the tax credits would get swept up into the statewide allocation with other excess tax credits and reallocated later this year to “the most underserved regions of the state,” Campbell said, which may not be San Antonio.

Barring significant issues, Reed said, Culebra is “positioned to be awarded” the tax credits. In the meantime, he and Rise Residential are working to address questions the agency has about its application.

“They have to nitpick — and nitpicking is good,” he said. ‘You want them to review the application, and you like them to ask clarification questions because that means they’re working the deal.”

Rise Residential submitted two different applications for 9% tax credits this year. Culebra Apartments and Mission Road Apartments, another senior project that didn’t make it onto the waitlist even though it had the support of one of two area neighborhood groups on the South Side. The project on Culebra would be Rise Residential’s first in San Antonio.

Like Vista Park, the Culebra Apartments would also require a zoning change — and another vote by City Council later this year.

A $20 million gamble

Vista Park — a public-private partnership between OCI Development, the San Antonio Housing Trust, the local Essence Preparatory Public Schools and Florida-based Atlantic Pacific Companies — would have been the first subsidized housing complex in San Antonio to offer free, on-site pre-K for residents.

Though the vote on Sept. 19 was 7-4 in favor of the zoning change from commercial to residential, the change required a supermajority vote because of adjacent property owner opposition.

Without the necessary zoning change — which was critical to the purchase of the vacant property, Vista Park missed the deadline to secure the property in order to receive the tax credits.

Supporters said the project would further the city’s goals toward housing affordability as about 1 in 4 renters in the city are cost-burdened when it comes to rent. Whyte and others said they were against the project because that area of town is already too crowded and congested and the three-story structures would “tower” over the adjacent single-family homes.

Mayor Ron Nirenberg and others on the dais warned that voting against the critical zoning change would mean the tax credits could go elsewhere.

“$20 million … has been awarded to this project with zero guarantees that if this measure fails today we would have the ability to apply that $20 million [in San Antonio],” Nirenberg said ahead of the vote. “More than likely, it would leave San Antonio, based on all of the applications that are submitted.”

“Well, that’s not true,” Whyte told the San Antonio Report this week. “If that was true, I am not sure how I would have handled this.”

Whyte had been in communication with Reed ahead of the vote — on the dais he referenced an email he saw between Campbell and Reed — and knew there was at least one other project that might be able to keep the tax credits in San Antonio.

“I liked [Vista Park],” he said. “It was a good, if not great, project. The problem is, the particular tract of land that they selected was very, very [narrow].”

The Culebra project is still not guaranteed to get the credits, Nirenberg said this week. “The fact that the Culebra project is being reviewed by TDHCA for possible award does not take away the extremely bad judgment call made last [month].”

Nirenberg supports the Culebra project and he hopes it gets the award, but “if we had made the right call on zoning … we would have an ideal project under development now.”

Whyte rejects the suggestion by some of his colleagues that he’s adopted the not-in-my-backyard (NIMBY) attitude that neighborhoods across the city often deploy against subsidized housing.

“This had nothing to do [with] whether it was an affordable project or a market rate project,” he said. “When you are doing multifamily apartment complexes, you have to make sure that they’re not going in a spot which may negatively affect our neighbors.”

He would welcome a similar project to his district in the right spot, Whyte said, suggesting the Rolling Oaks area as a possibility.

‘Akin to banging my head against a wall’

Councilwoman Melissa Cabello Havrda (D6), who also voted against Vista Park, said she welcomes the Culebra Apartments to her district.

But if the adjacent single-family neighborhoods don’t — that would be a different story, Cabello Havrda said. She voted against Vista Park’s rezoning because she typically favors the opinions of neighbors.

“I made the choice that I made based on my consistent record of voting for the neighborhood, which is why I work so hard to get neighborhoods on board,” said Cabello Havrda, who is considering a run for mayor.

“We don’t move forward in my district zoning cases until everybody is on at least the same book,” she added. “Not everybody’s always going to agree on everything, but [we do] what we can to make the neighbors happy … and, of course, help the developer get what they want.”

Creekside Neighborhood Association President Annette Perez said the neighborhood welcomes the apartment project.

Currently, the barren property along Culebra Creek attracts groups of people on dirt bikes who kick up dirt when they do donuts, said Perez, who has lived in her home across Culebra Road from the potential building site for 27 years. “They’re always running around there and doing illegal stuff. And of course, by the time you call the police, they’re gone.”

An older couple in the neighborhood was even considering moving in if it’s built, she said.

All of the 88 units at Culebra would be income-restricted at an average of 54% of the area median income — roughly $33,400 for an individual — or less. The tenants would be 55 or older.

The project is outside the boundaries of the nearby Great Northwest Community Improvement Association, so the group doesn’t formally support or oppose it, said Brian Stives, chair of the association’s board.

“Something’s going to be built there,” Stives said. “I would just as soon have senior apartments as opposed to another shopping mall or a pawn shop.”

Reed said he reached out to Culebra neighbors earlier this year with information about the project while Rise Residential waited to hear whether it would be awarded the tax credits, he said. When it was placed on the waitlist this summer, that work was paused.

“We have done substantial neighborhood outreach and the common theme has been ‘can you build more units and can you build them faster?'” Reed said. “We met with anyone who had questions or if our councilwoman [or] state representative wanted us to meet with them. Our policy is to be open and transparent with our neighbors.”

But sometimes, as it seemed in the case of Vista Park, no amount of outreach, design adjustment or transparency could assuage opposition.

Land use attorney Kevin DeAnda, who was hired by the Vista Park developers, told zoning commissioners in August they had essentially reached an impasse with neighbors. He did not see a point in scheduling more meetings.

“Considering the emails and the voicemails, the telephone calls that I’ve taken from those individuals requesting that we not move forward with our zoning case, it would have been akin to banging my head against a wall,” DeAnda said.

The Zoning Commission recommended approval for the Culebra property’s zoning change in April, but it was withdrawn from council consideration by the developer when it was placed on the waitlist. Now, it has to go through that process again.

Cabello Havrda said she would assist in expediting the zoning approval, which could occur in November, if the project moves forward.

How 9% competitive tax credits work

The 9% tax credits are sold by developers to investors who can apply the credits toward their federal tax liability each year for 10 years in exchange for their investment in the property.

The credits originate from the federal government, but each state generally gets to decide how to allocate them.

Through TDHCA, Texas allocated about $95 million worth of credits in 2024, which includes some leftovers from last year. Because they’re so lucrative, they are highly sought after. The agency typically receives applications for four times as much funding is available.

The rules and scoring surrounding which project gets an award are strict and complicated — seemingly intentionally so — in order to pick the highest use of those tax credits.

“There is a clear intention in state statute to de-concentrate this housing and not congest it all in one certain part of town,” Campbell said.

Local resident and government support of projects is also considered in the scoring process. For instance, San Antonio City Council unanimously approved letters of support for both Vista Park and Culebra Apartments — as it typically does for 9% tax credit applications.

For large subregions like San Antonio, there cannot be two projects within two miles of each other that receive awards in the same year —the only other project on the waitlist was disqualified for this reason.

Only a certain percentage, roughly 40%, of a region’s allocation can go toward housing projects for elderly residents — which is the case for San Antonio.

However, state statute has an exception for situations where the only eligible applications in the area are senior projects, Campbell said. So the Culebra project is “not excluded from consideration because of the elderly cap.”

It’s not atypical for a project to fall through as in the case of Vista Park, he added.

“This happens every single year,” he said. “People can fail to get zoning, people can fail to secure the rest of the financing that they thought they were going to get — lots of things can happen.”

That’s why there’s a waitlist — and developers pay close attention when a 9% tax credit falls through, Campbell said.

“There’s somebody else sitting somewhere in an office in Texas looking at this [Culebra project] now and saying: ‘If that one doesn’t work out, those credits are coming to me.'”

TDHCA’s deadline to secure the property and finances for previously waitlisted projects is a bit more flexible, he said, but “as of January 1, everything turns back into a pumpkin. The credits are no longer valid. We can’t issue them at that point, and everything starts all over again next year.”