By Carson Bolding & Ben Olivo
When you hear someone talk about “workforce housing,” what image do you conjure? What do workforce apartments, or renters, even look like?
It’s been described as housing for nurses and teachers, and for people who work in the hospitality industry. Workforce housing is not deeply subsidized housing, for low-income tenants, nor is it market-rate. It’s the upper echelon of subsidized housing—which is housing built with the help from some sort of government incentive—for people making somewhere at or below 80% of the area median income, or AMI. For a single person in the San Antonio-New Braunfels region, that’s $40,310. Workforce housing is also close to where people work, which lends itself to shorter, cheaper commutes.
This is workforce housing.
Of course, it’s not that simple.
Lately, projected “workforce” rents at apartments either under construction or in development seem to be unaffordable for the San Antonians they’re supposed to serve. At the Friedrich Lofts on the East Side, which is anticipated to begin construction early next year, an 80% AMI or below rent for a studio is projected to be $1,100, and around $1,400 for a one-bedroom. You don’t need to be a housing expert to understand that most San Antonians can’t afford to pay that much for an apartment. How can subsidized housing be so expensive? Two reasons: 1) It has to do with how federal rent limits are applied (or not) in San Antonio, and 2) how rent limits are inflated by the federal government’s definition of area median income locally—two topics we took big swings at recently.
It’s not just that certain subsidized rents are high. Here, we’re exploring the term “workforce housing” as jargon and why it’s misleading. Developers and housing officials eager to redevelop the downtown area often pitch “workforce housing” as housing for downtown hospitality workers when seeking approval from various boards and commissions. We’d like to know: What hotel housekeeper can afford $1,100 for an efficiency, or $1,400 for a one-bedroom? Or, what restaurant server?
“Working a little over minimum wage, that would be impossible,” said Ashanti Williams, a bartender at Boxcar Bar on the near East Side.
The term has become so ambiguous, it’s hard to tell if anyone really knows what they’re talking about when they talk about workforce housing.
The words we use
On May 27, when the Planning Commission heard a proposal to change the property at 538 Everest Street near Alamo Heights from a mixed-use land use to high density, residents of nearby neighborhoods called in to express their opposition to “low-income housing” being built in their backyard. But a representative with developer Vickrey & Associates was adamant that this development was not low-income housing, but workforce housing. Confused, R. Joy McGhee, who serves on the Planning Commission, asked the question that seemed to hang over the teleconference: What’s the difference between low-income and workforce housing?
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The City of San Antonio defines workforce housing as housing reserved for people making between 61% and 80% AMI, which is roughly between $30,240 and $40,310 for a single person, respectively. “Affordable housing” is housing for people making anything up to 60% AMI, according to the city.
Two years ago, the Mayor’s Housing Policy Task Force defined workforce housing as housing in the price range for those earning between 80% and 120% AMI.
[ Scroll down for a chart showing 2020 AMI levels. ]
The biggest problem with using “workforce housing” is that it implies people earning less than the threshold being used don’t work. But people who are in those lower income ranges are often exactly who you think about when describing the workforce.
Of the $48.8 million the City of San Antonio doled out to people under its emergency housing assistance program, from late April to the end of September, 59% of renters made less than 30% AMI, which is $15,120 for a single person. Recipients had to prove their incomes were impacted by the loss of a job, or reduced hours, due to Covid-19.
“Let’s just use a different term: let’s call it middle-income housing, but don’t call it workforce,” said Heather K. Way, director of the Entrepreneurship & Community Development Clinic at The University of Texas School of Law. “There is a push … to move away from that term because of the way it creates a stigma for other types of subsidized housing, serving those other renters.”
Way recently completed a study that exposed flaws in public facility corporations, or PFCs, which are government-run nonprofits that offer developers a full property tax exemption in exchange for offering half the units to renters who make 80% AMI or less—or, workforce housing. One example is the Friedrich Lofts, which is a partnership between the city’s San Antonio Housing Trust Public Facility Corporation (PFC), Dallas developer Provident Realty Advisors, and Atlanta-based investor American South Real Estate Fund. Five City Council members serve on the Housing Trust PFC board, and often approve “workforce housing” developments citywide.
These kind of public-private partnerships are always touted as mechanisms for creating workforce housing. Sometimes, developers and housing officials go so far as to describe them as affordable housing.
To be fair, the Housing Trust PFC, at least, has shifted to providing more affordable units, for tenants making 60% AMI or less, even if the percentages of total units is small, typically 10%. It’s also fair and accurate to say that the shift has happened because the San Antonio Express-News and Heron has shown more light on PFC deals—their complexities, how they work, etc.—in recent years.
According to the city’s 2019 Status of Poverty in San Antonio report, 9.3% of people living in poverty in San Antonio are employed, a larger proportion than Texas and the United States. And downtown San Antonio in particular is fueled by the service industry. But the Mayor’s Housing Policy Task Force report notes that these workers—who often include hotel staff, restaurant workers and security guards—rarely make more than $15 an hour, which is approximately 60% AMI, or what was $40,080 for a family of four, at the time. Today, 60% AMI is $43,200 for the same family size.
The City of San Antonio’s “Affordability Guide” lists food prep workers, cashiers, and customer service representatives as all earning between 30% and 80% AMI.
But can food prep workers, or hotel housekeepers, or any other worker in the lower rungs of the hospitality industry, afford to pay more than $1,000 for an efficiency, or around $1,400 for a one-bedroom, which is what the 61%-to-80% AMI apartments at the Friedrich are projected to go for? For household making up to 60% AMI, or $30,240 for a single person, the Friedrich is also setting aside studios for $767, one-bedrooms for $822, and two-bedrooms for $987.
[ Editor’s note: The Friedrich is a rabbit hole we must sidestep here for the sake of keeping this thing on track. If you want to go down it, read “Why some subsidized housing is beyond reach for many San Antonians.” ]
“What makes workforce housing true workforce housing is its proximity to employment centers,” said Pete Alanis, executive director of the San Antonio Housing Trust. “Putting housing and transportation together is the right type of fit.”
Jim Bailey, associate principal at Alamo Architects and a member of the task force, explained recently that the labels applied by the Mayor’s Housing Policy Task Force aren’t necessarily perfect. The terminology people use shifts over time. Workforce housing, especially, is a moving target. “I think we’re in a different place than we were in two years ago,” Bailey told the Heron over the summer. In the midst of a nationwide housing crisis and a global pandemic, Bailey thinks that the existing definition of workforce housing might be too narrow.
Another part of this issue is that HUD’s AMI is rising faster than real incomes in San Antonio because it includes higher earners from more affluent nearby communities such as New Braunfels. If a family earning 80% AMI is charged a rent suitable for their income level one year, this unit may soon become unaffordable, as it is adjusted to a higher AMI the next year—while incomes true to San Antonio, and not New Braunfels, stagnate. These changes pose the risk of pushing this large portion of people out of the city and away from the communities in which they work.
Housing advocates prefer to use the median household income provided by the U.S. Census Bureau, American Community Survey (ACS) 2014-2018, which is $50,980, because it captures only San Antonio households. But the housing system operates by HUD’s AMI, which lumps San Antonio and New Braunfels into the same statistical area.
“We sometimes are pigeoned-holed in these definitions because they are industry wide standards,” Alanis said, “but they may not be appropriate in the community we live in.”
Alanis also echoed a defense many developers use when defending rent prices: wages need to increase, too.
“Every works really hard,” he said. “When they’re not paid a wage that provides them the opportunity to live a decent life, that’s a problem.”
‘It’s completely unaffordable’
The Housing Trust PFC has also partnered with NRP Group, a national developer with a strong presence in San Antonio, on The Flats at River North, the monolithic structure currently under construction at Broadway and Jones Avenue. Like other PFC deals, NRP Group will benefit from a full property tax exemption while providing half the units at market-rate, and the other half to people making 80% AMI or less. Almost equidistant to downtown and the Pearl, The Flats at River North is sitting on prime real estate, and the rents reflect that.
According to Debra Guerrero, Vice President of Government Affairs for the NRP Group, market-rate rents at this complex can reach up to $3,265. The reserved units at The Flats at River North are primarily studios and one bedrooms. A one bedroom subsidized unit will be priced as high as $1,340, she said.
“I don’t know anybody who could afford that doing what we do,” said Joe Saenz, a butcher, chef, and the founder of Swine House, which serves Texas pasture-raised meats at pop-ups and private events.
Until recently, Saenz ran a sandwich shop in downtown, which has temporarily closed due to the coronavirus pandemic.
Saenz said as a tenant, you have to factor in the cost of parking, internet, and other expenses not included in the rent.
“That’s not out of the realm of possibilities in normal times, like for a bartender that does well,” said Saenz, who rents a home in Monte Vista with multiple roommates. “But I don’t know any cook that really could pay that, just as a base.”
For Williams, rising rents in the downtown area have made it challenging to find an affordable place to live for someone on a bartender’s budget.
He’s lived and worked around downtown San Antonio for six years, and right now is renting a house near Woodlawn Avenue and Interstate 10 with a roommate. The two split the $700 rent and about $250 in other bills.
Those higher rents could work, he said, if it were a couple living together.
“Do I want to say $1,400’s an affordable condition? Yes, if I have someone living there with me,” he said. “Otherwise, it’s completely unaffordable. I make good money as a bartender… But at $1,400 if it was a one-bed, one-bath, I wouldn’t be able to live there, unless I had someone to sleep on the couch, paying rent with it. Or a partner, a romantic partner to live with me.”
A more drastic picture
In 2016, the Mayor’s Housing Policy Task Force reported that “in much of San Antonio, rental housing priced at 80 percent of AMI … is essentially market-rate housing.” The opinion has only grown to near-consensus since then.
More and more developers we interview agree that 80% AMI housing, just because it’s below market-rate, shouldn’t be called affordable in San Antonio.
Victor Miramontes, whose Mission DG company is building the Tampico Apartments on the near West Side, in partnership with the San Antonio Housing Authority (SAHA), says those 80% rents are not necessarily for service workers.
But that’s why at Tampico, which is located along Alazan and Apache creeks, near their confluence with San Pedro Creek southwest of downtown, Mission DG and SAHA are providing rents that hit every AMI level.
“If you are a service worker in downtown, you should have the right to live close to where you work, just as the office worker in the high-rise,” Miramontes said.
Teri Castillo of the Historic Westside Residents Association paints a more drastic picture of un-affordability. If HUD’s regional AMI, which is $72,000 for a family of four, is inflated when compared to only San Antonio incomes, then it’s absurdly inflated when used to build housing in San Antonio’s poorest neighborhoods.
“We have San Antonio’s most economically poor zip code within our district,” she said recently referring to 78207 in District 5 on the West Side. The 2016 American Community Survey found that the household median income in District 5 was $28,593, less than 40% of HUD’s reported area median income for the San Antonio-New Braunfels region.
Castillo described a graphic shown at a Housing Commission meeting over the summer that demonstrates the mismatch between affordable housing and her community’s needs.
The chart, shared at the meeting held on June 24, shows that the city has more than doubled its 10-year goal of building 1,165 units that are affordable to those making 60%-80% AMI. But it has only reached 14% of its goal for housing that’s affordable to those in the 30%-50% AMI range, according to the presentation by Ian Benavidez, special projects manager for the City of San Antonio.
That range is equivalent to an annual income of $21,600 to $35,500, which is more in line with the AMI of the West Side.
While this 14% shows that they’ve met their 1-year goal for production, it still lags substantially behind the construction of other units.
“Where our need is, it’s not being met,” Castillo said. “Where our folks can’t afford is being exceeded.”
Housing is complicated. It’s even more complex when we use the wrong words to describe it.
At the Heron, we have slowly stopped regurgitating these terms, slowly purging them from our articles. We have started to divide housing into two categories: market-rate and below market-rate. We’re trying to steer away from terms like “workforce” or even “affordable,” because, honestly, we just don’t know what they mean anymore.
So, how do you describe subsidizing housing that’s just below market-rate? You have to call it something, and we get that. Just don’t call it “workforce.”
Trinity University senior Carson Bolding was a Heron research intern this past summer through Students + Startups, a program by the 80/20 Foundation that pairs undergrad students with local companies and nonprofits. Bolding is studying economics and communications, and can be reached at @carsonautri on Twitter.