As San Antonio mulls $150M affordable housing bond, city celebrates apartments built from 2017 bond

By Richard Webner | @RWebner | Heron contributor

The city’s $1.2 billion, 2022-2027 bond proposal, currently on the ballot as early voting continues through May 3, includes a $150 million affordable housing bond intended to build and restore housing in San Antonio, as well as help lift wages. If it passes, it will greatly expand the city’s role in creating affordable housing—but it’s not entirely unprecedented.

The prior 2017-2022 bond package, approved by voters five years ago, included a $20 million Neighborhood Improvements bond (another name for a housing bond) for the city to use to buy properties and fix them up so that they could be developed with mixed-income housing by private builders.

The city went on to pursue four housing projects through the bond. One of them, the 24-unit West End on Frio complex near the downtown campus of the University of Texas at San Antonio, had a ribbon-cutting last week, though its developer, Terramark Urban Homes, is still waiting on paperwork before residents can move in, said Verónica Soto, the city’s outgoing director of the Neighborhood and Housing Services Department, or NHSD.

Another of the four, the 196-unit Park at 38Thirty near the Medical Center, has been completed; another, the 292-unit Greenline North near Brooks, is expected to open in the summer or fall, Soto said.

The city has hit the reset button on a fourth project, Four25 San Pedro, which had been envisioned as an 80-unit apartment complex on San Pedro Avenue, after running into opposition from residents of the surrounding neighborhood just north of downtown, who were concerned that it wouldn’t include enough housing units for families, Soto said.

The $150 million housing bond is of much broader scope than the $20 million Neighborhood Improvements bond, with programs directed at preserving old homes and apartment buildings, and at helping the homeless. But Soto said that the $20 million bond will serve as a model for what the city could do with the $150 million, should it be approved by voters on May 7.

“One of the things that I told the Housing Commission, and anyone who will listen: If we hadn’t delivered on the $20 million, we wouldn’t have the conversation of the $150 million,” Soto said. “It’s challenging to develop anyway, but our projects got hit with every unimaginable challenge. A pandemic. The fluctuation of all the construction materials—I mean, lumber’s still really high. Supply chain. The freak snow storm—oh my God. Labor shortages.”

“Yes, it will be seen as a model. Yes, there are lessons we have learned that will help us do a better job should the bond pass on May 7.”

Soto, a Harvard and Princeton alum who came to San Antonio from El Paso in 2017 to take charge of the newly-created NHSD, makes no secret of her excitement over what the city will be able to do if voters pass the $150 million housing bond.

“You know, I came to San Antonio because of the housing bond, and because of what this department was going to do,” she said. “I loved that San Antonio was finding its own way forward when it came to housing. They weren’t waiting, like, ‘Oh, let’s see if the federal government puts out more money.’ They’re like, ‘No, We’re going to find our own way.’”

Soto is leaving her job at the city to serve as a director in the U.S. Department of Treasury’s Office of Recovery Programs, she confirmed to the Heron earlier this week. Her last day at the city is May 9.

In 2017, San Antonio was limited in the ways it could spend voter-approved bond dollars on housing. But in 2021, San Antonio voters approved amendments to the city charter that allow it to broaden how those dollars are used when it comes to housing, thus setting up the much-larger $150 million affordable housing bond.

Both housing bonds are part of a larger strategy, called the Strategic Housing Implementation Plan, to address San Antonio’s housing shortage for lower-income households. The plan, approved by the City Council in December, estimates there are 95,000 cost-burdened households in San Antonio. In recent months, the San Antonio Housing Authority has said there are 51,000 people on its public housing waiting list, and 5,000 households waiting for a Section 8 voucher.

[ Related: City Council approves 10-year affordable housing plan | Dec. 17, 2021 ]

“San Antonio is going to show other cities how to do it. It’s going to be nationally recognized,” Soto said. “We have a big challenge, but San Antonio is leading the way. If this passes, this department is going to deliver, and it’s going to be the national model for how to address affordable housing.”

2017-2022 Neighborhood Improvements bond spending

Here are updates on the four projects in the Neighborhood Improvements bond:

Editor’s note: It’s worth repeating that the 2017-2022 housing bond was approved when the city was restricted in how it could spend those dollars. The 2022-2027 affordable housing bond proposes a wider range of housing expenditures, which includes building housing for the homeless population, and investing in programs that increase wages. For more on the current housing bond proposal, open the city’s bond information guide, and scroll to page 19.

West End on Frio

Address: 711 S. Frio St., on the near West Side.

City contribution: $417,690—construction cost, administrative costs, etc.

Status: Terramark is waiting to get a certificate of occupancy that will allow it to open the complex, Soto said. She expects that to happen within two weeks. After the ribbon-cutting last Tuesday, a waiting list has been created for interested tenants.

Development partners: The San Antonio Housing Trust Public Facility Corp., or PFC, a nonprofit arm of the city. Local developer Terramark Urban Homes.

Project description: A 24-unit apartment complex with green space and a dog park.

Affordability: Of the 24 units, 10 will be made affordable to those making up to 50 percent of the area median income, or AMI, Soto said. Another two will be affordable to those making up to 80 percent. The rest will be market-rate. Those affordability levels are contractually locked-in for the next 40 years, she said.

[ Scroll down for a chart showing AMI levels. ]

The monthly rent will be $833 for a two-bedroom apartment set aside for those making up to 50 percent AMI, Soto said. For the apartments reserved for 80 percent AMI, the rent will be $1,300 a month, she said.

Incentives: The city didn’t have to purchase land for this project. The city had previously been in agreement with another developer to build on the site, but the developer couldn’t follow through, Soto said, so the city decided to use it for this purpose.

The project received $346,000 in city development fee waivers and $242,000 from the city’s affordable housing fund. Because it is done in partnership with the Housing Trust PFC, with the PFC owning the land, it will receive a full property tax exemption under state law.

Park at 38Thirty

Address: 3830 Parkdale St., in the Medical Center area.

Status: Residents have already moved into at least two of the apartment complex’s buildings, Soto said. The city plans to hold a ribbon-cutting ceremony on May 2, she said.

City contribution: $7.75 million—construction cost ($4.4 million), land purchase ($2.9 million), administrative costs, etc.

Development partners: Franklin Development, a local developer that specializes in building affordable housing complexes with the help of tax credits from the federal government’s low-income housing tax credit program, or LIHTC, administered through the Texas Department of Housing and Community Affairs.

The San Antonio Housing Trust PFC, which currently owns the seven-acre site, is the other partner.

Project description: A 196-unit apartment complex; all of the units are two-bedroom or three-bedroom.

Affordability: All of the project’s units will be affordable to those making up to 60 percent AMI, Soto said.

Incentives: The project received $1 million in tax credits through LIHTC. It is a PFC project, so under state law, it will receive a full property tax exemption.

The city purchased the land for $2.9 million from Agora Assets LLC. It spent $4.4 million on site preparation, including bringing utilities to the site, Soto said. The project received fee waivers of $250,000 for SAWS impact fees and $96,000 for city fees.

Greenline North

Address: 7402 S. New Braunfels Ave., north of the Brooks development.

Status: Pre-leasing started in February, and the first move-ins are expected in May.

City contribution: $5.4 million—construction cost ($4.2 million), administrative costs, etc.

Development partners: Franklin Development, and the San Antonio Housing Trust PFC.

Project description: Built on an 11-acre property owned by the Housing Trust PFC, it will be an apartment complex with 292 units spread across 11 buildings. All of the units are two- or three-bedroom, Soto said.

Affordability: The complex will make use of “income averaging,” a means of creating units at lower affordability levels by raising the affordability levels of other units, Soto said. For example, by adding a couple units for those making up to 70 or 80 percent AMI, an apartment complex might be able to offer units for those making up to 30 or 40 percent without becoming unprofitable. The federal government started allowing this method to be used in 2018 for projects making use of the low-income housing tax credit program.

“Instead of having all the units rent at 60 percent AMI, we mix it up,” Soto said. “We have a few that have that deeper affordability, and the public good of that deeper affordability is strong enough that it’s OK if you have a few units being higher.”

On average, the units will be affordable for those making up to 60 percent of AMI, she said. The unit breakdown will be like this: 34 units will be for those making up to 30 percent AMI; 9 for up to 40 percent AMI; 9 for up to 50 percent AMI; 141 for up to 60 percent AMI; 69 for up to 70 percent AMI; and 30 for up to 80 percent AMI.

Incentives: The project received $1.9 million in federal tax credits through LIHTC. It is a PFC project, so under state law, the complex will receive a full property tax exemption.

The city spent $4.2 million on site preparation, including environmental remediation, Soto said. The project is being built across nine acres of a 12-acre site that the city had formerly used for its solid waste vehicles, so the city didn’t have to buy any property.

The city sold the remaining three acres of the site, and put the $1.6 million it received into its affordable housing fund for use on the bond projects.

Four25 San Pedro

Address: 425 San Pedro Ave., near the Villa Tranchese Apartments tower

Status: The city was forced to return to the drawing board on this development after its initial proposal was met with opposition from residents of nearby areas who wanted it to include more units for families, rather than studio and one-bedroom units, Soto said.

“We don’t want to build a project that’s going to have neighborhood opposition, so we are going to rework it to have more family units,” she said.

At this point in the project, it’s unclear when it will break ground, she said.

Development partners: Franklin Development

City contribution: $5.29 million—construction cost ($2.6 million), land purchase ($2.2 million), administrative costs, etc.

Project description: The city had envisioned building 80 units on the 0.95-acre site, which was formerly a tire shop, but the details are uncertain now that the project has been thrown back in its planning stage.

Affordability: Soto said she would like for all the project’s units to be at or below 60 percent AMI, but again, the details are in flux.

Incentives: The city purchased the land for this project for $2 million. It had planned to spend about $2.6 million to prepare the property for development, Soto said, but that number might change for the project’s new iteration, which would require council approval for a new sum.

Editor’s note: This article has been updated to reflect that all of the units at the Park at 38Thirty are available for lease, and that pre-leasing has begun at Greenline North.

Richard Webner is a freelance journalist covering Austin and San Antonio, and a former San Antonio Express-News business reporter. Follow him at @RWebner on Twitter