Developers wanting city tax breaks may be required to take housing vouchers

The City of San Antonio is considering an ordinance that would prohibit city-backed housing developments from denying a tenant based on their source of income.

Specifically, the ordinance is aimed at tenants paying rent with housing vouchers, or federally subsidized funds for renters administered by housing authorities. The San Antonio Housing Authority (SAHA) and the Housing Authority of Bexar County administer these funds locally.

The ordinance is two years in the making, according to Rich Acosta, a housing advocate and president of nonprofit housing organization Mi Ciudad es Mi Casa, who has spearheaded placing the ordinance on the council’s radar.

The ordinance’s purpose, Acosta says, is to prevent a larger problem before it starts. As more housing is built in San Antonio with the help of city subsidies—but often while not accepting housing vouchers from potential tenants—more housing is being created that is inaccessible to those seeking it, he argues.

With a source of income discrimination ordinance, as it’s known, future city-backed developments would chip away at the number of San Antonio residents unable to find affordable housing, he says.

The ordinance has received wide support from Texas housing and advocacy groups, including the South Alamo Regional Alliance for the Homeless; Texas Housers; the Housing Commission; SAHA; and the San Antonio Housing Trust. Council members John Courage (D9), Roberto Treviño (D1); and Mayor Ron Nirenberg also support the policy.

“With this pandemic increasing the affordability gap, now, more than ever, we must find new ways to increase housing opportunities with the limited funding we have available,” former San Antonio Mayor and former Secretary of the U.S. Department of Housing and Development (HUD) Henry Cisneros wrote in a letter to Nirenberg supporting the ordinance.

Two weeks ago, the San Antonio Housing Trust, an arm of the city that partners with developers, adopted the same ordinance two weeks ago.

However, the policy has received concern from the Apartment Association of San Antonio, which argues such a move could hinder development locally.

The City Council is scheduled to vote on the measure on April 15.

How it would work

To put it simply, the ordinance would require any upcoming housing developments that use city tax incentives to accept housing vouchers. If a person qualifies for a lease, and is using a housing voucher to pay for a portion of their rent, a landlord cannot deny a lease because they are using a housing voucher or other housing assistance funds.

The ordinance is intentionally broad, Acosta said, to incorporate all housing voucher programs into the statute and prevent possible loophole policies.

If the ordinance passes, people can report income discrimination by calling 311 or by contacting the city’s Neighborhood and Housing Services Department’s (NHSD) Fair Housing Division, or the Office of Equity. If a developer, property owner or landlord is found to have violated the ordinance, they might be required to pay back any incentives received from the city, or be barred from receiving any in the future.

The ordinance would not apply to existing housing developments that received city subsidies.

Austin approved an ordinance prohibiting landlords from discriminating because of a tenant’s source of income in 2014, regardless whether the property was funded by grants or tax abatements. The state struck down the ordinance the following year, prohibiting any city from adopting similar ordinances. In 2016, Dallas adopted an income discrimination ordinance, aimed at city-funded properties and veterans needing housing assistance, which is not barred by the state.

NHSD hopes the ordinance will make future “publicly supported” housing developments more accessible. Or, as Acosta puts it, increase the amount of affordable housing in San Antonio without spending more money.

In early 2020, the Heron surveyed the downtown apartments that received city incentives through the Center City Housing Incentive Policy since 2010. None of them accept the Section 8 voucher.

‘Take a step forward’

The San Antonio Housing Trust (SAHT), a city-created entity that develops below-market housing in San Antonio, drafted its own version of an income discrimination policy, which went into effect on March 30.

The Housing Trust “sees the need for such a policy and I hope this will show as another example of this need and is a problem needing to be solved,” Acosta wrote in an email to council members.

The policy, called the tenant protection policy, is a way for the department to “take a step forward,” Pedro Alanis, the trust’s executive director, told the Heron, hoping the city would create a similar policy. The Housing Trust also consulted the City of Austin and Mi Ciudad es Mi Casa, along with Texas RioGrande Legal Aid and the Texas Housers to draft the policy.

Like the ordinance proposed by the city, the trust’s policy would apply only to properties created after the policy is adopted.

Before the tenant protection policy, the Housing Trust had no formal policy for its tenants paying with Section 8 vouchers.

In San Antonio, the Center City Housing Incentive Program (CCHIP) offers a 75% tax rebate on only the city portion of a developer’s property tax bill, among other incentives such as fee waivers. Developments in the downtown area, and in the regional centers identified in the city’s SA Tomorrow plan are eligible for CCHIP incentives.

The Housing Trust’s public facility corporation (PFC) offers a full property tax exemption, as all PFCs do under state law, to a development partnership. So far, the Housing Trust PFC has produced 16 developments across the city totaling 4,371 units.

How vouchers work

Currently, there are 5,000 San Antonio residents waiting to receive a housing voucher, according to SAHA Chief Operating Officer Brandee Perez. When the waitlist closed in 2017, there were over 50,000 people on it. Perez said that the waitlist will open again in a couple of months.

“We recognize, as a housing authority, that any time there’s an opportunity to expand the voucher program to areas of opportunity, whether these developments are on the north side, East Side, West Side or South Side of town, we think that our voucher holders should have the ability to rent these units,” Perez said.

Landlords or property owners can opt into SAHA’s programs and accept housing vouchers. From there, SAHA gives them orientations to understand the vouchers, the policy, the paperwork, and the inspection process. All SAHA properties and housing voucher-accepting properties must be inspected biannually by SAHA.

There are 14,000 vouchers in SAHA’s programs, including the Housing Choice Voucher program; the Veterans Assistance Supportive Housing program, providing clinical and housing assistance for veterans; the Moderate Rehabilitation program, for project and home rehabs; the Set Aside Homeless voucher program; and the Mainstream Program, which assists non-elderly persons with disabilities in finding health care. SAHA then has to balance the amount of dollars given annually by HUD to vouchers.

HUD has not increased the amount of Housing Choice vouchers during the entirety of Perez’s 15-year career with SAHA, she said. Particularly now, with so much federal resources going towards Covid-19 relief, it’s not likely vouchers will increase anytime soon.

Vouchers become available once a person or family leaves the program. SAHA then chooses whoever’s next on the waitlist, based on the date and time they applied.

How much rent housing vouchers cover depends on the program, the size of the needing family, their income, where they want to live and the unit they want to live in.

SAHA uses 10 “payment standards” to help determine how much rent a voucher will subsidize, rather than base it off an entire metropolitan area, which was how the system used to operate. The payment standards group San Antonio’s 85 ZIP codes, with the downtown area being spread between payment standards 1 and 2. HUD establishes the market rate that SAHA adheres to, while SAHA sets the payment standard, based on HUD’s analysis of the rent prices in the area.

“The thought process behind it was HUD was hoping to disperse more vouchers across cities,” Perez explained, noting that vouchers were almost exclusively issued in the same areas of the city.

Though HUD issues these market rates annually, Perez says it does not accurately reflect rent prices in areas like downtown, because HUD cannot keep up with the growth from new apartments and businesses.

Impact on development

The Apartment Association of San Antonio is worried that an income discrimination ordinance may delay that growth.

“It could, in essence, prevent housing providers from applying for those city funds because they’re forcing them to participate in a program, regardless of what is going on in their business,” Teri Bilby, executive director of the Apartment Association of San Antonio, said.

The group has more than 1,000 members, Bilby said, represents the rental housing industry, and has membership across the city, and into Uvalde and Eagle Pass.

Bilby says the ordinance should not be mandatory and that SAHA’s required inspections are burdensome for landlords who may need to keep their unit off the market as it’s being inspected. Bilby also doesn’t think income discrimination is happening at all.

“We don’t actually see that there’s a problem that needs to be addressed,” Bilby said. “We haven’t seen evidence of that.”

The Center City Development and Operations department (CCDO) told the Heron it hasn’t received opposition or concerns from downtown developers regarding the ordinance.

“Many developments receiving city incentives have layered other federal and state incentives which require acceptance of various sources of income,” said Kelly Kaupan Saunders, CCDO spokeswoman. “Incorporating these provisions at the local level further ensures potential renters have a variety of housing options throughout the city.”

In response to whether income discrimination has been documented in San Antonio, NHSD provided a statement to the Heron.

“Accepting these other forms of income is normally up to the landlords discretion, subject to the assistance program guidelines,” the statement reads. “Many federal and state development incentives require that a landlord accept vouchers for qualified units. While the majority of city incentivized projects currently contain these provisions, the proposed … ordinance would address all future city incentives.”

Acosta says apartments not accepting housing vouchers as a source of income, regardless if they have denied a potential tenant who uses housing vouchers, is income discrimination. Acosta also says any new building should be able to pass a SAHA inspection.

Bilby maintains that if a landlord or property owner does not want to accept housing vouchers as a source of income, they have the freedom to not participate.

“It’s not discrimination for choosing not to participate in a voluntary federal program,” she said.

For Acosta, a property being partially funded by city tax dollars but choosing not to accept a source of income also funded by city tax dollars is ironic.

“They’re asking for help to afford something that they wouldn’t be able to afford without government assistance,” Acosta said. “There’s your irony. The renters are getting help from the government to afford a rental that they couldn’t afford without some extra assistance.”

Setting It Straight: As previous version of this article misstated the housing voucher policy of developments between NRP Group and the San Antonio Housing Trust PFC. They do accept housing vouchers.

Gaige Davila is the editor of the Port Isabel-South Padre Press and South Padre Parade, based in Port Isabel, and former Heron staff writer. Follow him at @GaigeDavila on Twitter.