Legal Limitations Put Proposed Housing Bond On Hold

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The City's Housing Commission to Protect and Preserve Dynamic and Diverse Neighborhoods discusses the framework for a potential housing bond. Photo by Camille Garcia.

The City's Housing Commission to Protect and Preserve Dynamic and Diverse Neighborhoods discusses the framework for a potential housing bond. Photo by Camille Garcia.

The City’s Housing Commission to Protect and Preserve Dynamic and Diverse Neighborhoods needs to clarify a few legal stipulations before it takes an official housing bond draft to City Council for approval.

The ultimate goal for the 15-member Housing Commission, which was established in May of 2015, is to mitigate the impact of gentrification throughout the city and preserve and increase affordable housing options in the inner city. The proposed housing bond, the first of its kind in the city, is a product of the commission’s seven-member Housing Bond & Funding Subcommittee.

The subcommittee has outlined three key areas in the proposed housing bond: gap financing for affordable housing construction, multi-family housing preservation and emergency repair/accessibility improvements for existing housing stock.

The commission hoped to put its proposed $50 million housing bond on the May 2017 ballot when residents vote on the city’s $850 million bond project – the largest in city history – but learned Tuesday that only the gap financing component would make the cut. If the commission chooses to go forward with that portion in May 2017, its funding request will be closer to $30 million.

The group will discuss the matter further and make a final decision at an Aug. 2 meeting.

Housing Commission Chairwoman Jennifer Gonzalez, who sits on the Housing Bond & Funding Subcommittee, said that time is of the essence, especially since City 2017 bond funding discussions will officially begin in mid-August. Instead of waiting for the other two projects in the housing bond draft to gain approval, the Commission could get the ball rolling with a gap financing component, she said, and flesh out details on the others in the meantime.

“We certainly have to be on the bond schedule,” instead of waiting for the next bond cycle, Gonzalez told Commissioners Tuesday. The City takes bond projects to voters every five years.

The City's Chief Financial Officer Ben Gorzell and Lauren Ferrero, associate at Norton Rose Fulbright US LLP, have conducted research about the what is legally allowed for the potential housing bond. Photo by Camille Garcia.

The City’s Chief Financial Officer Ben Gorzell and Lauren Ferrero, associate at Norton Rose Fulbright US LLP, have conducted research about the what is legally allowed for the potential housing bond. Photo by Camille Garcia.

State law and City charter stipulates that the other two components in the housing bond could only be included if the City amends its charter. San Antonio’s charter, unlike other cities, only permits bond funding for public works projects, which doesn’t include housing, said Lauren Ferrero, an attorney who was hired by the City to be a liaison between the City and the Texas Attorney General’s office.

The Legislature allows a city to amend its charter only once every two years. San Antonio last made a charter amendment in May 2015, said the City’s Chief Financial Officer Ben Gorzell, who presented the housing bond recommendations to commissioners Tuesday. Housing commissioners thought they’d be able to amend the City charter on the same day as the May 2017 election, but the state Legislature moved up the election day by one week, Gorzell said, making it less than a week short of the two-year requirement.

Now, the earliest that the charter election could take place is November 2017.

Deputy City Manager Peter Zanoni said this setback could be an opportunity. The commission will likely see success if it focuses its efforts on the gap financing project. Then, the other projects would be more likely to gain Council and public approval, once they adhere to the City charter stipulations.

From left: the City's Chief Financial Officer Ben Gorzell, Lauren Ferrero, associate at Norton Rose Fulbright US LLP, and Deputy City Manager Peter Zanoni take questions from the Housing Commission. Photo by Camille Garcia.

From left: the City’s Chief Financial Officer Ben Gorzell, Lauren Ferrero, associate at Norton Rose Fulbright US LLP, and Deputy City Manager Peter Zanoni take questions from the Housing Commission. Photo by Camille Garcia.

“The reason the second (City bond project) was passed in 2012 was because we delivered to voters (with the 2007 bond). We completed projects on time and within budget,” Zanoni said. “We need time to demonstrate progress.”

If the gap financing component is approved, the City could buy land, rehabilitate it, and then sell it to a multi-family housing developer, who could then rent the units at an affordable price.

The City could do so by creating an “urban renewal program” under the City’s Office of Urban Renewal San Antonio (OURSA), formerly San Antonio Development Association (SADA), which would be in charge of the funds. Many Housing commissioners advised against this, citing SADA’s rocky history which some said is against the commission’s mission of avoiding gentrification.

The commissioners asked Gorzell and Ferrero to clarify with the Attorney General’s office if that gap financing for affordable housing construction would apply only to multi-family developments or if it could include, by statute, single-family projects as well.

Additionally, they asked for clarification on whether or not relocation costs for residents who had to move could be included in the 2017 bond allocations and if implementing community land trusts was allowed. Ferrero and Gorzell said they would find answers to the commission’s questions by the Aug. 2 meeting date.

“I feel irresponsible making a recommendation at this point,” said housing commissioner Mu Son Chi, Bexar County director at Texas Organizing Project.

Commissioner Debra Guerrero, San Antonio Independent School District board trustee and former City Councilwoman, agreed.

“I think we should set up another day to discuss this,” she said after an almost two-hour long discussion. “I think at the end of the day we’ll get more support (from the public) if we get more answers (from the Attorney General).”

Several community members, including local attorney and St. Mary’s University Senior Law Professor Amy Kastely, believe taking a pause in the housing bond drafting process is the right move. Kastely said that according to state law, bond funding could be granted for owner-occupied rehabilitation, meaning some people wouldn’t have to vacate their homes, a point that Gorzell and Ferrero said was unclear.

Kastely said the commission should more firmly challenge the Attorney General’s office, as well as its interpretation of the City charter’s language.

“You should demand better. That is incredibly disrespectful to the commission and to each member of the subcommittee,” she said. I haven’t seen any prepared reports (from the Attorney General’s office). I heard there was reference to part of the San Antonio charter and part of the Texas local government code … but there are no cases interpreting this question under either the charter provisions or state local government code. We’re dependent on the language and the language itself is ambiguous.”

The Housing Commission will regroup at their Aug. 2 meeting, just ahead of its second annual Housing Summit that will take place on Friday, Sept. 30 from 7:30 a.m.-7 p.m. at the Henry B. Gonzalez Convention Center.

To register for the free summit, and to learn more about the programming that will take place, click here.

 

https://rivardreport.wildapricot.org

 

Top image: The City’s Housing Commission to Protect and Preserve Dynamic and Diverse Neighborhoods discusses the framework for a potential housing bond.  Photo by Camille Garcia.

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