San Antonio City Council will soon consider modifying incentives that the City uses to encourage urban core residential development. One idea is to shrink the geographic areas in which current and future projects are eligible for incentive packages.
The Council's Housing Committee met Wednesday to review these and other proposed amendments to the Center City Housing Incentive Policy (CCHIP),
CCHIP has been providing incentives for multi-family housing projects in eight targeted areas within a 36-square-mile area since it was approved by City Council in 2012. Council is required to review the program by the end of June 2016 and consider whether to extend or modify the incentive packages.
Officials said the City wants to capitalize on the policy review as a chance to improve and simplify incentives, and apply them in areas where they can increase housing stock "to have greater efficiency in incentives for projects that would have the most impact," City Redevelopment Officer Ramiro Gonzales told the Rivard Report after the committee meeting.
It makes sense to adjust the CCHIP boundaries, Assistant City Manager Lori Houston told Council members, because it will give development efforts a nudge in certain neighborhoods in and around San Antonio's urban core.
"There have been projects on the near east and west sides where CCHIP doesn't meet their needs. We've had to tailor incentives to meet their needs," Houston explained. Updating CCHIP according to City staff's proposals would reduce the need for incentive customization.
Speculative land pricing, spurred by the tourism industry and hotel market, have discouraged prospective residential developers from considering eligible area properties, Houston said, so revised boundaries and enhanced incentives are needed to entice them.
The City is on its way to adding 7,500 new housing units in and around downtown by 2020, she added, as the area has seen more than $700 million in private investment for new housing.
The eight focus areas are currently split into four categories that receive different levels of incentives, where fee waivers, property tax rebates and low-interest loans vary.
City staff proposed that CCHIP consolidate several incentive categories and make a new 5.4-square-mile focus area. The new Urban Core focus area would be bound by Interstates 10, 35 and 37, and Cesar Chavez Boulevard, basically absorbing River North and portions of Hemisfair and Cesar Chavez Corridor, Medical District and Civic Center focus areas. The Urban Core's incentive package would be increased to favor development.
A Greater Downtown focus area would be added, encompassing parts of Pearl/Midtown, the near Westside, the near Eastside, and Southtown/King William.
Other proposed changes include:
- Forgiving construction loans for projects in the "urban core" zone – that is, if the developer meets specific conditions;
- A $500,000 cap on waived San Antonio Water System impact fees on projects outside the central business district (CBD), whereas projects inside the CBD would maintain a 100% waiver;
- Cap construction loans for projects outside the CBD at $500,000;
- Repayment of loans upon sale of a project. The current rule is that a loan repayment is transferred to the buyer.
Councilman Ron Nirenberg (D8) said he wants to make sure the boundaries are redrawn in a way to help preserve of integrity of neighborhoods, both within the new areas and just outside of them.
"I want to make sure (changes are) put in the context of SA Tomorrow," he said, referencing the City's long-range comprehensive plan. He added CCHIP remains "an extraordinary tool" that encourages and guides higher density development and urban renewal.
"I want to make sure we're not swinging to the other side and leaving some areas out," said Councilman Rey Saldana (D4).
Houston and Gonzales said more housing should lead to improved pedestrian and mass transit connectivity in and around downtown while encouraging more commercial development in the area.
"Those two projects are going to be catalysts themselves and help bring back more development to downtown," she added.
The committee members, including Councilman Mike Gallagher (D10), said they look forward considering the proposed program amendments with their colleagues on Council that are not on the committee. They unanimously agreed to recommend the changes for placement on the June 16 Council agenda.
City staff will brief Council members individually ahead of June 16.
"I welcome these amendments if they get us to the focus that's needed," Saldana said.
Nirenberg said the City must inform residents in and around existing CCHIP boundaries to let them know of the possible changes, which could lead to new housing in or near their community.
"We have to work on communicating to people what we're doing, and tell them we're not transforming their neighborhood," he said.
Houston said once the Council signs off on changes, current residential developers taking advantage of incentives will have 30 days to adjust their agreements with the City.
Top image: The Maverick Building is located on 606 N. Presa St. Photo by Kathryn Boyd-Batstone