Officials Seek Quick Fixes for Downtown Housing Affordability Issues

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The Soap Works apartment complex.

Scott Ball / Rivard Report

The Soapworks apartment complex has a new owner and is undergoing renovations, raising issues of affordability.

Elected officials and City staff are looking into short-term solutions for residents concerned they will be priced out of apartments next to the multimillion-dollar San Pedro Creek improvements project.

Possible avenues, suggested by Councilman Roberto Treviño (D1), are using funds from area taxing districts to help residents relocate, providing incentives to landlords to keep rents down, or some other assistance.

“I want to make sure we’re turning over every stone [looking] for immediate and long-term opportunities to help residents,” Treviño said Monday during the Houston Street Tax Increment Reinvestment Zone (TIRZ) board meeting.

Three residents from the Soapworks and Towne Center apartment complexes attended the meeting at City Hall to describe their living situations and the pressures of getting by on fixed incomes. The near-downtown apartments recently were purchased by a Houston-based firm, and new management has implemented fees and started renovating units.

No one has been forced out – nor has rent increased for anyone living in an old unit, according to management, which is open to working both with City officials and residents. But residents see change coming and worry they’ll be left without a place to live. They point to the case of Mission Trails Mobile Home Park, which about 300 individuals had to leave when the property was sold to apartment developers. A task force and housing commission was formed aimed at addressing gentrification, but neither body has developed policies that would apply to Soapworks and Towne Center, located on North Santa Rosa Street near West Martin Street.

The City has a relocation assistance program for renters, but that is reserved for people who find themselves living in hazardous conditions with code violations or other safety concerns.

Long-term policy solutions are being explored by a new Housing Policy Task Force, but those may not be in place to help residents now, Treviño said. It’s possible the TIRZ could pay for sidewalk or parking lot improvements to offset some redevelopment costs, savings that the management then could pass on to residents, he said, “providing a shock absorber.”

TIRZs have independent political boundaries aimed at urban redevelopment. Taxable properties within a TIRZ pay into a fund that then is paid out to improvement projects within the zone. The zones are unique to the state of Texas and can be initiated by the City or property owners.

It’s unclear if rent stabilization is a legal use of these funds, said Assistant City Attorney Ted Murphree, who attended the meeting Monday. “This statute is very broadly written … [and] flexible.”

But generally TIRZ funds are used for the public good, Murphree noted, so would this be for a “certain segment of the public or overall?” That’s what working with Treviño and City staff will determine, he said. Treviño directed staff members to explore legal precedent and craft a letter to the property owner that explains possible options.

The difference between before- and after-renovation rents at the two complexes are estimated to be between $100 and $400, City staff said, but it’s unclear which tenants will stay and which will eventually move out.

About 87 percent of the 381 units that make up Soapworks, Soapworks II, and Towne Center are occupied, Michelle McMillan, vice president of Capstone Real Estate Service’s regional office in San Antonio, told the Rivard Report. Capstone is managing the property for the owner, Barvin Group.

High-end housing is being constructed near the Pearl and Southtown and a slow trickle of government-subsidized low-income housing is going in near downtown, McMillan said, and Barvin Group wants to fill the gap in the middle “to create an affordable, mid-range rental option that most working San Antonio residents can afford in the downtown area.”

She said that they are “certainly open” to working with the city on affordability programs involving TIRZ funding.

The apartments, constructed during the late 1970s and early 1980s, haven’t been upgraded since they were built, McMillan said, and previous management raised the rent of some units without raising others, creating a mishmash of rent expectations.

Cruz R. Soto, 65, has attended several recent public meetings about housing. She rents a studio apartment in Soapworks for $450 per month, more than half the $888 she receives from Social Security. Soto says her apartment is teeming with cockroaches, despite the additional $3 per month she pays for pest control.

“[Lack of communication] has been one of our biggest frustrations,” McMillan said, who added that pest problems are typically reported to media before they are reported to management. “All they have to do is tell us … nobody comes to us to let us know.”

Meanwhile, construction continues on the $175 million San Pedro Creek improvements project that will create a linear park through the western side of downtown.

Bexar County Commmissioner Tommy Calvert, who serves on the TIRZ board, said that while the creek will serve as a great amenity for the city, he is concerned that some longtime downtown residents will be squeezed out of affordable housing options. They “waited for the renaissance and can’t bear the fruits of that.”

15 thoughts on “Officials Seek Quick Fixes for Downtown Housing Affordability Issues

  1. These apartments are eyesores and are in desperate need of repairs. Let this new owner renovate and raise rents accordingly there are other housing options all over the city for every price range. Being in the center of town has always been costly no matter what city you live in, San Antonio is just now starting to catch up. I’m really confused as to why the city would spend tens of millions of dollars on improvements to San Pedro creek then discourage developers from investing in upgrades to buildings or building new ones around it to match this first class project? If I’m going to be running the new San Pedro trail it needs to be safe, and I’m sorry but the fact of the matter is that soapworks reg has a cop car out front because of crime or domestic issues. I applaud a developer buying it and hopefully fixing it or bulldozing it down and building something we can all be proud of.

    • Love improving my cities downtown… but let’s not bitch when we see an increase in the homeless, while sipping on mid-grade high-priced downtown wine. And don’t dismiss the issue or subsidize it as “Joe”states– increase minimum wage.

    • Okay, taxpayers fund the creek, taxpayers fund the homeless. Where’s the accountability from the city and the new owners. Just because the old owners were jerks doesn’t mean these people should struggle more.

  2. Stop subsidizing private developers with public money. It is already out of control and accelerates the problem, it doesn’t fix it.

    How is a renter being “priced out” by increasing rents different than a homeowner being “priced out” by increasing property taxes? In both cases the occupant of a dwelling is forced to pay more each month in order to legally reside in the dwelling and an external entity is raising those costs.

    If I make improvements to my house, I pay higher taxes due to a higher valuation. If my neighbors make improvements, I also pay higher taxes due to increased comparable home prices. I’d like some City assistance in these “rent increases” from my BCAD landlord, too.

    San Antonio is simply less affordable than it used to be. That’s one of the costs of having a successful growing economy.

    Maybe the Council should pass a higher City minimum wage, so the residents can afford to pay the higher rents rather than subsidize the developers via never-ending taxpayer handouts?

    Isn’t that a “stone” that Trevino can turn over, too?

    • Really good points in these replies. Rents go up, taxes go up, costs generally go up. It’s the way the whole world operates, so not sure why one group of people feels it should be immune to that fact of life, or why anyone should expect taxpayers to help keep their rent low. San Antonio needs to improve its downtown to compete for new businesses that will help our city’s economy overall. .

  3. The city has no business in our tax $$. It’s bad enough we get dinged at the federal level. A recent trip to the Social Security office was proof of the laziest people in the world on “fixed incomes”. A young fat couple waiting their turn while the male was loosely holding on to a walker, rudely pacing back and forth, in front of all others, displaying his displeasure at the wait time. The only good thing about it was he was getting some exercise – clearly capable of getting a JOB. We need to get over “affordable housing” and concentrate on Senior housing being affordable. Although The 65 yr old getting $888 per month, first question why? Has she worked hard and just now receiving or has she also been on the gravy train forever. $450 per month is about as good as it gets for housing payment, and many many Seniors are in the same boat that have worked all their adult lives, retire at full benefit age, and barely get by.
    The City also needs to delete some departments -mainly Eastpoint, and reduce the workforce of all housing programs. They just get paid high salaries for doing NOTHING worth their job description. We could use those $ toward property tax reduction or lower SAWS and CPSB bills!

  4. Were these units built as a privatized way of providing low income housing instead of having publicly built low income housing? If so, the city has gotten itself in this mess. Any private developer is in his business to make money. And after all these years, probably the “contract” has expired or had a clause that allows him to raise rents if the united deteriorate and need reconditioning. The proposed sources of further supplementing rents is just another effort to support the developer in making more money while charging all taxpayers to cover the cost. Never expect anything done through privatization to work out to the advantage of the contracting government agency or the total population of taxpayers over time.

  5. Problem and Solution,

    I was there at the meeting and feel the saying “better late, than never” happens all to often. Why is there not master planing not being done to address these issues before construction even started on the San Pedro Creek. You know that because of the construction there is going to growth in the area as well as increased value?

    If there is not already, a special master plan committee needs to be made the sole purpose identify projects that are on the ground floor of planning of development and start figure out how its going to effect the local community and create a plan to help low income people before construction even begins.

    Problem 2:
    We (the city) spend a lot of tax payer money give incentives for businesses like apartments to help out the local community when they build. We are spending money that indirectly help low income people instead of directly helping them.

    Tax is a touchy subject, since I don’t think the city can pass legislation to force landlords to accept low income programs or force them to keep a percentage of low rent especially if they don’t use city money to help build, but is it possible to give a landlord tax/business tax, that they can be exempt from if they accept low income program (section 8 vouchers) or has a certain amount of low income rental properties. They do not have to have low income people living in their homes to get tax exemption, but if the low income renter applies and qualify they cant say no ether. Its easy for them not to pay the tax, just don’t discriminate against low income people.

    This would not cost the city anything (beside enforcing tax maybe), possible increase revenue, help those in low income rental areas stay in their homes, and is a warranted tax because of the improvements being made to the city and the mayors pursuit of low income housing support.

    Landlords can keep their “rights” by paying the tax and raising the rent thus not losing any money, and not accepting low income people and the city could use that money to help low income people, win win!

    Enforcing is tricky, the landlord would apply for a waiver and potential renter would file a complaint if discriminated against (low income discrimination is real problem in San Antionio).

    I am not going to pretend to have all the answers, just want to know if this could work?

    Remember if you have problem with creating a tax know that taxes is being used anyways to address this problem through incentives, and people dont want property taxes raised so where will the money come from?

    Thank you,

    Rich Acosta

    • Rich, regarding Problem/ Solution #1 you have here, I was there also and that was exactly what I was suggesting with the addition of a sixth “pillar” to the five already existing ones on the taskforce as a proactive measure when these deals are first being hashed out with developers. I saw several of the taskforce folks scribbling during the time I had the microphone and will wait to see if anything will come of it, or if it is just another good, albeit abit “altruistic”, idea. Good to know there are still a few of us that want an equal playing field for all of our fellow San Antonians!!!

  6. @ Rich Acosta,

    The State of Texas has already said that landlords can’t be forced to accept Section 8 vouchers nor can they be punished for not accepting Section 8 vouchers. Your tax idea will not work.

  7. 2017 Bond Issue, Prop 6, $20 million

    This proposition authorizes the City of San Antonio to issue bonds, the proceeds from which will be used to: acquire properties within
    12 identified Neighborhood Improvement Areas; improve and dispose of acquired property to facilitate private sector development of
    single- family, multi-family or mixed-use projects; for the purpose of eliminating slum or blight conditions or to prevent the spread of those
    conditions, consistent with the City’s 2017 Urban Renewal Plan as adopted by the City Council for the City of San Antonio on February 2,
    2017. The City will not build housing, but will rely on non-profit and private sector housing developers to do so.

    The Bond dashboard shows all $20M to be in FY18’s budget, but the map doesn’t show a single project planned or underway citywide.

    “The City funding would be used to clear property and install necessary utilities, sidewalks and streets in preparation for single-family or multi-family housing construction.”

    Voters authorized a specific pot of money for specific purposes including Trevino’s beloved “miles and miles of impervious cover” of more concrete sidewalks. Maybe the Council ought to look at the $20M already authorized for this purpose before coming up with wacky ideas about the legality of providing TIRZ incentives to private property owners’ sidewalks and parking lots, or worse “housing incentives.”

    FYI: Prop 6 zone Near West-Five Points is right across the street from Soap Works. Doesn’t that mean the City is already planning on affordable housing to be placed there?

  8. I can’t wait for the councilman to host a meeting in which he details how the city will subsidize MY mortgage and rising property taxes. Maybe they can move me to a nice home in Alamo Heights since we were giving away housing to people who can’t afford it.

  9. I have suggested this before in another article’s comment section. There is a lot of empty lots and derelict/empty houses in south town. Why not increase the tax or levy an unused lot/house fee that can be used to fund affordable housing in SA ?

  10. Bailouts don’t work, subsidies (for the developer or the low income) don’t work, social experiments don’t work. The only thing that works is the free market. Everyone from every opinion or position will get by if the city would stop meddling and let the free market do it’s job.
    Property taxes don’t just affect home owners, they affect renters too. If the value of an apartment complex goes up then so do the rents. The city needs to reel in the BCAD and stop their overreach on values.

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