Nonprofit Opens Doors by Building Affordable Homes for SA’s Working Families

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Scott Ball / Rivard Report

Cross Timber Homes Executive Director Michael Taylor stands in front of a nearly completed residential construction project.

On a quiet street on San Antonio’s South Side, within blocks of the Mission Reach, sits a new one-story home that stands out among the surrounding homes built decades before only for its shiny new mailbox and freshly planted sod grass out front.

As of last Friday, the new house on Livingston belongs to the manager at a downtown hotel who holds the keys to his first home, a modern 1,500-square-foot house in an established neighborhood located within biking distance of his job.

For the homebuilder, Cross Timber Homes, the combination of location, house, and buyer represent everything the nonprofit was established to do. That is, to provide high-quality single-family houses in San Antonio that are affordable for middle-income families and individuals.

Cross Timber Homes is a 2-year-old offshoot of Habitat for Humanity of San Antonio, which funded startup costs for the nonprofit in 2017 along with the community development nonprofit LISC (Local Initiatives Support Corporation) and the City of San Antonio. Cross Timber also shares warehouse space with Habitat, which helps with managing the fluctuating cost of construction materials.

The nonprofit Habitat For Humanity has built 1,100 homes for low-income families in San Antonio since its inception in 1976. Volunteers built the first Habitat home in the United States here, and the organization continues to builds new three- and four-bedroom homes with two full baths that are priced at between $75,000 and $80,000.

With a $1,750 down payment, 300 hours of sweat equity, and monthly payments of less than $600 a month, families who earn less than 80 percent of the area median income (AMI) and meet other qualifications can own a Habitat house. Last year’s Habitat homebuyers averaged a $29,500 annual income, less than 50 percent of the AMI.

But many working families make too much money to qualify for a Habitat home yet still struggle to afford a home as San Antonio’s median home prices rise.

Meeting the housing needs of those types of families served as the catalyst for creating an organization like Cross Timber, which is similar to others in Dallas and elsewhere.

“We think everybody that needs affordable housing should have it,” said Natalie Griffith, Habitat’s president and CEO. “I don’t fault for-profit builders – that’s what they do. But we didn’t want San Antonio to become this entire city without any options for working families. Cross Timber is just an extension of that.”

Most new housing in San Antonio is priced above what low- and moderate-income households can afford, according to an analysis of housing vulnerability in San Antonio released in January 2018.

That report cited another study that found that for the 12-month period ending in the third quarter of 2017, over half of new home starts were priced over $250,000 and only 17 percent were priced under $200,000. The median home price in San Antonio is $241,000, according to the San Antonio Board of Realtors.

Older homes that are rehabilitated and offered in an affordable price range also come with barriers for middle-income buyers. The houses often don’t pass inspection or are appraised below the asking price, making it difficult for buyers to obtain financing, said Michael Taylor, executive director of Cross Timber Homes and vice president of land and program development at Habitat.

“The best philosophy for starting a nonprofit is to do what no one else can do,” he said. “No builder wants to build homes at this price point. The margins are too low.”

The nonprofit Cross Timber, on the other hand, has constructed eight homes in 2018 and is on track to complete 10 more this year.

The homes start in the mid-$150,000 range and are offered for sale at the cost to build. They feature three bedrooms and two baths in a single story with handicap-accessible hallways and doorways. The kitchen is equipped with stainless steel appliances, and the yard is sodded front and back. A backyard shed is provided for storage and a new mailbox is posted out front.

Though the homes are not billed as having expensive upgrades, they feature open floorplans, elevated ceiling heights, spacious walk-in closets, and modern finishes such as vinyl plank flooring, dual sinks, and tile-surround showers. It all comes with a new home warranty.

Like the one on Livingston, which sold for $157,500, most Cross Timber homes are built on vacant lots in up-and-coming neighborhoods chosen because they are primed for what the organization deems as positive growth. Lots are evaluated against 35 criteria, including proximity to parks and major employers, school quality, crime, real estate market trajectory, and the quality of the public infrastructure.

The first homes Cross Timber built were located in Jefferson Heights near St. Phillips College. Then the builder constructed several more near Our Lady of the Lake University and on the Southwest Side before starting on some homes on the Southeast Side.

“What we’re doing is reinvesting in a neighborhood by building homes, not houses that accelerate gentrification, but that fit in architecturally and are priced higher but not so much higher that they cause gentrification,” Taylor said. “It’s an incremental improvement as opposed to what’s happened in places like Mahnke Park where it goes from one extreme to the other. There are a handful of neighborhoods like that.”

To qualify for a Cross Timber Home, an individual must be a first-time homebuyer, meet the income guidelines based on family size (total yearly income maximum of $76,700 for a family of three), and attend homebuyer readiness and home repair courses prior to closing.

Another recent Cross Timber homebuyer who purchased her first home in June had been renting a Southwest Military Drive apartment for years. As a county employee, she was excited to be able to buy a home in her longtime neighborhood, Taylor said, and move in with her two teenage children and elderly mother.

Locating vacant lots that are affordable and then preparing them for construction is the most time-consuming and difficult part of the build process for Cross Timber, Taylor said. In the case of the Livingston house, it took six months of working with CPS Energy to reroute power lines that cut across the lot.

But finding buyers might be the easiest part. The first eight homes Cross Timber built in 2018 were under contract before construction was complete. Some sell even before construction has begun, which allows the buyer to choose some of the finishes, including cabinet colors, exterior paint color, flooring finish, and counters.

Cross Timber does not offer financing but provides $5,000 in down payment assistance when the buyer works with one of its two preferred lenders, Broadway Bank and Jefferson Bank. Both offer loan products developed for Cross Timber homebuyers.

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