Incentives to bring affordable housing
Initial developers in revised CCHIP plan pony up units
The first few developers seeking incentives under a recently revamped city incentive program will set aside more than half of their residential units for affordable housing, officials said Wednesday.
The city has received four applications for incentives from the Center City Housing Incentive Policy (CCHIP) — which now funds downtown housing with property tax rebates, utility fee waivers and grants for infrastructure improvements — since City Council members voted to retool the program in December.
The previous policy came under fire for subsidizing pricey condos and apartments in downtown San Antonio.
About 50 percent of the four projects’ combined 528 multifamily housing units and townhomes would be set aside as affordable housing if the developers receive incentives.
In exchange, the projects’ developers are eligible for more than $1.9 million in city and utility fee waivers and tax rebates for up to 15 years upon final approval.
“Each of these projects will bring much-needed affordable housing to our center city,” District 1 Councilman Roberto C. Treviño said in a statement. “They are great examples of how the layering of incentives can provide housing that is attractive and affordable to residents.”
CCHIP and another city housing incentive program, the Inner City Reinvestment and Infill Policy, or ICRIP, sprang from thenMayor Julián Castro’s push for a “Decade of Downtown” earlier this decade. The idea was to encourage developers to build market-rate housing in the hotel-dominated downtown in the hope that residents would move there — and retailers and companies would
follow.
The programs’ supporters say the incentives worked. Since 2012, CCHIP and ICRIP encouraged at least $4.4 billion worth of investments and led to the construction of at least 6,500 housing units, 230,000 square feet of retail space and 28,000 square feet of office space. In that time, city officials handed almost $102 million in incentives to developers through CCHIP.
But the programs came under fire in the last two years from council members and community activists who questioned whether the city needed to subsidize market-rate housing projects downtown, especially while the region is suffering a shortage of affordable housing.
About 60 percent of all city housing incentives, or $80.7 million, helped fund market-rate projects downtown, at the Pearl, in the Broadway corridor and in the River North area, according to a 2017 San Antonio Express-News analysis.
One of the projects was the Cellars at Pearl apartment complex, where the average rent was $3.14 a square foot when it opened in 2017 — well above the average area rent of $1.16 a square foot. The city awarded the developer $3.7 million in CCHIP incentives.
Officials also awarded more than $10 million in incentives to the Arts Residences and Thompson San Antonio hotel under construction at 123 Lexington Ave. near the Tobin Center for the Performing Arts, the largest grant in the program’s history. The highrise will have more than 60 condos costing between $400,000 and $4.5 million.
After hitting the pause button on the programs last year, City Council reworked the programs in December to encourage developers to produce more affordable housing units in and around downtown.
Now, developers who receive incentives under CCHIP must set aside a certain amount of units for households making 80 percent of the area median income or less, depending on where they build. The program has a three-tiered system tailoring incentives for areas in the downtown area as well as 13 employment centers around the city.
Also, a quarter of property tax revenue from projects that receive CCHIP incentives — estimated at $1.1 million annually — will fund affordable housing projects.
Overall, the four housing projects that have applied for CCHIP incentives since December — two of which are spearheaded by San Antonio affordable-housing nonprofit Alamo Community Group — would add 515 multifamily housing units and 13 townhomes in and around downtown.
Of the multifamily units, 259 will be set aside for families making 80 percent or less than the San Antonio’s area median income.
The median income for the San Antonio-New Braunfels metropolitan area sits at around $61,000, according to U.S. Census Bureau. Alamo Community Group plans to reserve 77 units at its $17.5 million Museum Reach Lofts development for households making less than 60 percent of area median income, calculated at $40,080 for a family of four, and nine for households making less than 30 percent, about $20,040.
The remaining nine units at the 95-unit project — which will sit at the intersection of North St. Mary’s Street and West Jones Avenue near the San Antonio Museum of Art — will be priced at market-rate. The Texas Department of Housing and Community Affairs Board awarded the Museum Reach Lofts project more than $1.2 million in low-income housing tax credits last year. The development won approval from the city Historic Design and Review Commission in December. Construction on the lofts is expected to finish by the end of 2020.
Another Alamo Community Group project — the 160-unit Cattleman Square Lofts at 811 W. Houston, near UTSA’s downtown campus — would set aside 136 units for households making less than 60 percent of the area’s median income, the city said.
“We pride ourselves on providing quality affordable housing that can be a catalyst for change,” the group’s executive director, Jennifer Gonzalez, said in a statement. “The CCHIP incentives, along with the other city and state tools, are vital to the financing of these projects.”
Dallas-based real-estate firm Stillwater Capital has applied for incentives for its 260-unit Augusta Apartments development at 819 Augusta St., pledging to reserve 13 units for households making less than 80 percent of area median income — around $53,440 for a family of four, according to the city.
A limited liability corporation called MGS Museum Reach would set aside four of the 13 for-sale townhomes it plans to build on Dallas Street for households making 120 percent of area median income — a threshold the city deems affordable for for-sale housing units.