City Council reinstates downtown housing incentives policy after one-year hiatus

In an 8-2 vote Thursday, the City Council restored the Center City Housing Incentive Policy, also known as CCHIP, which has been the impetus for 64 new housing developments in the downtown area since 2012.

Judging from council comments, the group consensus was that the CCHIP revisions weren’t perfect, but that they addressed many of the concerns and criticisms of the previous plan—which mostly had to do with the incentivizing of an overabundance of market-rate housing. The revised CCHIP, which takes effect Jan. 2, incentivizes affordable units in the core of downtown, and requires them for developments up to five stories in other areas of the city.

However, what the city labels as affordable—apartments offered to people making 80 percent of the area median income ($53,440)—still doesn’t sit well with some council members.

This was one of the reasons District 4 Councilman Rey Saldaña voted against the revisions. District 9 Councilman John Courage also fiercely criticized the city’s definition of affordable, but told the city that it needed to modify the programs accordingly going forward.

“My expectation is that we’ll continue to evaluate and monitor these programs to ensure that these incentives lead to dramatic increases to real affordable quality housing,” Courage said.

For District 7 Councilwoman Ana Sandoval, she voted against the revisions to give her constituents more time to understand and weigh in on them. She said it was a promise she had made during her election campaign in 2017, when two developers were trying to build low-income housing in her district near Bandera Road without any public process.

Overall, the council followed the lead of Mayor Ron Nirenberg, who suspended CCHIP a year ago this month out of concern that it was producing too many market-rate and luxury housing—which he says the average San Antonian couldn’t afford.

“After a year of delay, after a year of study, of reflection and of refinement, the time is now to move forward,” Nirenberg said.

The council also heard from citizens who represented the spectrum of the housing debate.

Dr. Christine Drennon, director of the urban studies program at Trinity University, told the council that it was years incentivized sprawl that lead to the deterioration of inner city neighborhoods. The people who suffered were the people in these forgotten communities. Now, Drennon said, they’re being pushed out by another incentive policy called CCHIP.

“We realized that that incentive structure had come to an end and we needed a new one—thus the ‘decade of downtown,’ ” Drennon said. “There is, and was, nothing natural about that.”

Bill Shown, managing director of development for Pearl developer Silver Ventures, warned that the revised CCHIP policy may be too watered down, and that the level of development downtown experienced before Nirenberg hit the pause button may not return.

“My concern is that there may be a chilling effect and the program may be ineffective in its current condition,” Shown told the council.

In an interview, Shown echoed a sentiment other developers have made: Don’t conflate an economic incentive tool with affordable housing. He said that it’s not one or the other—it’s both.

“Affordable housing needs to be addressed,” Shown said. “Address it in another fashion.”

The CCHIP policy is complicated, but here’s a rough explanation of what the Council approved on Thursday.

The policy now contains three tools in the tool box:

» tax reimbursement grants developers receive on city property taxes
» city development and SAWS fee waivers
» low-interest loan or grants only available in the downtown core for developer who add affordable units

Under the revisions, a developer would receive a 75 percent rebate on its city property taxes over 10 or 15 years. The other 25 percent would feed into an affordable housing fund, which the city estimates will receive $1.1 million by the end of 2020 from upcoming CCHIP projects.

As opposed to past iterations of CCHIP, the policy could also apply to the 13 regional centers outlined in the SA Tomorrow Comprehensive Plan. City officials say the policy won’t take effect until the council approves the land-use plan for each region.

With that, CCHIP is now tiered on three levels:

Here’s how the incentives breakdown at each level.

Contact Ben Olivo: 210-421-3932 | ben@saheron.com | @rbolivo on Twitter