San Antonio Express-News (Sunday)
QUESTIONING THE COST
Skyline: Trust’s goal is to boost affordable housing, but critics say the deals aren’t worth it.
Rebecca Flores arrived at the protest in downtown San Antonio on March 27 with a cardboard sign asking “Why are property taxes rising?” and a fistful of solicitations she’d received about buying her house.
Flores, a community activist, said she is frustrated that some of the apartment complexes in the area are exempt from property taxes, depriving the city, Bexar County, local school districts and other agencies of revenue.
“We need affordable housing, but do not do it at the price of eliminating money” for those taxing entities, she said.
“Who’s picking up that gap?” Flores added as she stood at the corner of César E. Chávez Boulevard and South Flores Street, about 2 miles north of her house. “It falls on us.”
Land values and property taxes are rising in her neighborhood, she said, and investors are calling and sending flyers about purchasing her house. She plans to pass it on to her daughter but worries about the tax bill.
Flores and a handful of others at the busy downtown intersection were protesting deals approved by the San Antonio Housing Trust Public Facility Corp., a powerful entity that most area residents have never heard of.
The public facility corporation is the most active arm of the San Antonio Housing Trust, a nonprofit created to generate and preserve affordable housing. Five City Council members appointed by the mayor sit on its board.
Through the trust’s partnerships with developers, more than $1.4 billion worth of apartments have been built, are under construction or are in the planning stages, according to a 2020 analysis by the Express-News.
Here’s how the deals work:
The trust buys the land, exempting it from property tax under state law, and the developer doesn’t have to pay sales taxes on purchases made for the projects’ construction. In exchange, the developer must rent at least half the units to tenants making up to 80 percent of San Antonio’s median household income.
That’s $46,100 a year for a couple or $57,600 for a family of four, according to the U.S. Department of Housing and Urban Development.
The tax breaks that developers are set to receive through these deals are worth more than $39 million annually, the newspaper’s analysis showed.
School districts can recover much of the lost revenue from the state through a provision that reimburses districts for property tax exemptions on low-income housing. But property owners bear a bigger share of the tax burden because of the exemptions, Michael Amezquita, chief appraiser for the Bexar Appraisal District, told the Express-News last year.
Proponents of the trust say it’s succeeding in producing affordable apartments. Nearly half the units built or planned as of the Express-News analysis last year are for families making up to 60 percent of the area median income.
The units also wouldn’t be financially viable without the tax breaks, they say, and are sparking investment in neighborhoods where developers usually would not build. Revenue that the trust gains through the deals can be used to fund other housing.
Thirty complexes with nearly 7,500 apartments are complete or under construction, including 4,389 units for residents earning between 30 percent and 60 percent of the area median income, said Pete Alanis, the trust’s executive director.
But the nonprofit’s critics contend that the public facility corporation board often approves units out of reach of San Antonio’s poorest residents — those the organization was created to help. They also question whether the threshold of 80 percent of the area median income should be considered affordable.
The NRP Group, a Clevelandbased company involved in a number of deals with the trust, came up frequently at last month’s protest.
Critics say property owners are bearing the brunt of the exemptions.
Developers are using “the affordability crisis to meet their goals, not the needs that have been documented in our city,” said Sofia Lopez, a former San Antonio Housing Authority board member who organized the protest.
“I want (the board) to reject these deals, say that they’re not good enough, set the actual terms that they want to achieve based on input from impacted people, and then if the developers want to go for it, they can,” Lopez said.
A 2019 report commissioned by the city showed the trust and its affiliates operated for years with little supervision and frequently approved projects with few apartments for the city’s lowest-income residents.
Another study published last fall by the University of Texas School of Law also revealed that the housing produced through these deals is often just as pricey as market-rate units. A number of Texas cities have public facility corporations, but the local trust entity has facilitated more deals than any other.
The trust and developers have built some of the projects within the San Antonio Independent School District.
“The affordable housing definition that many of these developments use is completely out of the range of the families that we serve,” said Alejandra Lopez, president of the San Antonio Alliance of Teachers and Support Personnel, which represents SAISD employees. “It’s not my students that are living in these new housing developments.”