Despite winning unanimous approval from the City of San Antonio’s Zoning Commission in May, a plan to build an apartment complex that would have provided affordable housing for seniors on the South Side appears to be scrapped.
Dallas-based property development and management company Rise Residential, which has built at least two multifamily projects in San Antonio, did not receive the competitive tax credit it applied for from the state earlier this year. The company withdrew its zoning change request from the city on July 12 before City Council could grant final approval.
Rise Residential did not respond to a request for comment on the reason for the withdrawal. It’s unclear if the company will try again for funding, or if the project is over. Kenneth Brown, a land use attorney representing Rise Residential in its zoning case, told commissioners that the company’s purchase of the property was dependent on the zoning change.
The company’s apparent withdrawal from the project illustrates the complicated, tenuous path that affordable housing projects often face amid increased demand, construction and financing costs in San Antonio and across the country.
“Housing in general — and affordable housing is no exception — is expensive,” said Ian Benavidez, deputy director of the city’s Neighborhood and Housing Services Department. “The deeper affordability you want … the more expensive.”
Plans for Mission Road Apartments, located at 3400 Mission Rd. in the Hot Wells Mission Reach neighborhood, received support from that neighborhood association, but opposition from the adjacent Mission San José Neighborhood Association.
“Our neighborhood already has five low-income housing projects,” Jane Henry, president of the Mission San Jose Neighborhood Association told the Zoning Commission on May 21. “We have enough.”
The commission approved changing the zoning of the roughly 5.5-acre property from commercial (“C-3”) to multifamily residential (“MF-18”). A C-3 zoning district allows for various uses including a bar, nightclub, dance hall, auto repair and sales, hotel and tattoo parlor. An MF-18 zoning district allows for a maximum housing unit density of 18 per acre.
“I’m assuming you guys don’t want to see a bar or something like that go into that area,” said Commissioner George Hinojosa Jr., who represents District 3 on the commission.
Henry said she would rather see a boutique hotel or single-family homes, rather than apartments.
“We want quality … development near the mission and something that would stimulate our local economy,” she said.
Brown said he was surprised at the opposition.
“I don’t think I have ever worked on a senior housing project that anyone opposed,” he said.
Brady Alexander, president of the Hot Wells Mission Reach Neighborhood Association, has lobbied against large, high-density housing projects in the area before, but supported Mission Road Apartments.
“This is appropriate infill that does not displace existing residents and [that is] one of our requirements in our neighborhood as we strive for a verdant and cohesive, integrated society in our area,” Alexander told the commission. “Most developers do not work with us [and] ignore the community — and all they care about is their bottom line. [Rise Residential] have gone the extra mile on that.”
Ultimately, the commission’s role is not to decide who lives in the apartments, said Robert Sipes, who chairs the Zoning Commission. “We’re looking at only whether it is an appropriate use.”
‘Hyper-competitive’ credits
San Antonio has made significant progress toward its 10-year affordable housing goals, but still struggles to incentivize housing that is affordable to its poorest residents, according to the city’s housing dashboard.
Beyond the other challenges that affordable housing projects encounter, such as community opposition, securing financing is the most difficult to overcome, Benavidez said.
The Low Income Housing Tax Credit that Rise Residential sought from the state, known as the Competitive 9% Housing Tax Credit, is named that way for good reason.
“They’re hyper-competitive,” said Pete Alanis, executive director of the San Antonio Housing Trust, which often partners on projects awarded the 9% or non-competitive 4% tax credits. “It provides 60 to 70% of the cost to build these apartment communities.”
Texas Department of Housing and Community Affairs received hundreds of initial applications for the 2024 tax credits, which 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 initial requests statewide added up to more than $374 million. Last week, $95.5 million was formally allocated to 63 projects.
Half of the six projects proposed in the Bexar County region that made it through the meticulous application process received funding: FishPond at Buena Vista (West Side), Vista Park (Far North East Side) and Park at Dogwood (New Braunfels).
“You’ve got to have the money and be willing to take the risk, ultimately, to apply,” Benavidez said.
On top of application fees that can add up to roughly $8,000 to $10,000, he said, “there are additional costs associated with the application including environmental site assessments, market analysis, site design, scope and cost reviews, and establishing site control. The bulk of the cost is associated with these and any specialized consultants the developer might need to hire.”
The project scoring process takes months and many applicants drop off by the time awards are announced.
“It is common to not score well one year, but maybe do better the next year or not be able to proceed for some reason,” he said. “It can be frustrating, for sure.”
