Proposed City Budget Boosts Funding for Affordable Housing Efforts

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Scott Ball / Rivard Report

Assistant City Manager Lori Houston presents the 2020 annual budget to City Council.

Next year will be the second year of a decade-long plan to improve the affordable housing stock in San Antonio, and the City’s proposed 2020 budget would increase funding for those efforts by $8.5 million.

A receptive City Council reviewed the Neighborhood and Housing Services Department’s budget Wednesday, but some had concerns about how those efforts are funded and operated.

Mayor Ron Nirenberg lauded the plan. 

“We’re ahead of the curve,” Nirenberg said. “Most urban cities of our size are dealing with a crisis that’s of a much greater magnitude, but we do have the ability to control our destiny here.” 

The City has two different budgets for affordable housing. The Neighborhood and Housing Services Department’s budget increased slightly by $200,000. Amid other adjustments, the City will hire a chief housing officer to oversee an additional $8.3 million, for a total of $34.4 million, this year from the City’s general fund, federal grants, and other sources for the housing investments and initiatives to keep vulnerable families in their homes.

Council is slated to vote on the budget on Sept. 12. Before then, it will review portions of the budget in six more meetingsSASpeakUp, the City’s public engagement arm, will take input from the community through a survey and via a “Telephone Town Hall” at which residents can call in to share their views and ask questions. Click here to view the schedule.

Most of the additional funding for affordable housing, $6.2 million, would come from the increased taxes the City collects in development zones that typically fund infrastructure improvements and other developments in the area. Under State law, cities can use tax increment reinvestment zones (TIRZ) that they established for affordable housing projects in or outside of the zone, City Attorney Andy Segovia confirmed.

Other cities in Texas and across the U.S. have already been using TIRZs for affordable housing, Assistant City Manager Lori Houston said, and the local TIRZ boards that decide which projects get funding have been open to the idea.

Councilman Clayton Perry (D10) said he is concerned about using TIRZ money for affordable housing. City departments should be looking to find efficiencies in their budgets rather than grow them by taking from other funds, he said.

Affordable housing was identified as a top City Council and community-at-large priority through the budget process earlier this year, Houston said.

The chief housing officer will continue to enhance the Coordinated Housing System and other initiatives called for in the 10-year policy plan, which Nirenberg championed and Council approved last year.

The City is on track to meet most of its housing goals set out in that plan but fell slightly short in increasing the rental housing stock that San Antonio’s poorest can afford.

The plan calls for 1,701 rental units that a family of four making 30 percent of area median income (AMI) or less can afford, but currently there are only 152 units built or in the works, Houston said. That’s 9 percent of the 10-year target. The same is true for families making between 30 and 50 percent AMI (between $21,000 and $36,000 per year). The 10-year target is 6,344 and there are 541 in the works.

Houston said she expects new federal rules related to project funding will inspire more housing that gives deeper affordability. Instead of receiving incentives based on the AMI level across all units, a project that has an average AMI level can get the same incentives. That means a project that has some units priced for families at 100 percent AMI or more could mix in 30 percent or fewer AMI units to receive tax breaks.

Because of this rule, more developers were producing housing units at 60 to 120 percent AMI, Houston said. The city overshot its targets for rental units at 50 to 80 percent AMI. The 50 to 60 percent AMI stock surpassed its goal (3,172 units) by 45 percent (4,608 units). For the 60 to 80 percent AMI range, 2,786 units are in the pipeline, surpassing its goal (1,165) by 139 percent. Owner-occupied units for residents earning various levels of AMI are on track, according to the City’s data.

But affordable housing programming in San Antonio extends beyond housing units produced.

Scott Ball / Rivard Report

Neighborhood and Housing Services Director Verònica Soto

The City funds various home repair services and home loan programs, and Fair Housing staff connected more than 2,000 families to resources throughout the city, Neighborhood and Housing Services Director Veronica Soto said. The $1 million displacement mitigation fund in 2019 has assisted 197 families by helping pay moving expenses, rent, mortgages, and other expenses.

Councilman Roberto Treviño said he wants to use $100,000 of that fund to start a pilot program that would provide legal assistance to vulnerable renters who face eviction. It can cost $5,000 to relocate, he said, but an attorney would cost about $550 to defeat a wrongful eviction.

Soto said her department is examining the need to move around such funding, which it does often to make sure the City “serves those with the most need.”

The department will also continue to focus on strategies to prevent displacement from gentrification next year, she said. San Antonio recently received several grants to that end aimed at customizing such ideas and programs.

Those include community land trusts, neighborhood empowerment zones, and coordinating with state legislators for better regulation, Houston said.

A neighborhood empowerment zone would freeze the value of an owner-occupied home even if improvements were made on it, Houston said. “That helps with the tax burden of that homeowner. What it doesn’t solve for, though, is the neighbor who lives next door because his home’s [value is] increasing because of that improvement.”

The department is also launching a single-family infill and rehabilitation/reconstruction pilot program that would have the City and a nonprofit partner purchase vacant homes or lots in established neighborhoods that developers could build on and sell to low-income families, Houston said.

Councilwoman Shirley Gonzales (D5) questioned the need for the City to get involved in such transactions.

“We’re not going to be building homes,” Houston responded, and the City already waives fees for affordable housing projects.

For the City to directly fund the construction of affordable housing, its charter would have to change, Houston said. “We need to broaden those powers.”

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