TIRZ Board Votes to Fund Affordable Housing, With Caveats

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Attendees of the opening ceremony walk by a newly constructed building at East Meadows.

Scott Ball / Rivard Report

State law allows for TIRZ money to be used for affordable housing in and outside a TIRZ zone, but the Inner-City TIRZ board made its approval conditional.

The City of San Antonio’s 2020 budget includes increased funding for affordable housing programs, but most of that money – $6.5 million – will require approval from five different boards.

On Wednesday, the Inner-City Tax Increment Reinvestment Zone (TIRZ) board approved its contribution of $1.5 million to be used for affordable housing. It’s the first TIRZ board to do so, but it came with the condition that those dollars have a preference for housing projects within the inner-city zone, which includes south of downtown and the near East Side. 

“I just want to make sure we get our fair share,” said Larry Keller, who serves on the Inner City board.

Veronica Soto, director of the City’s Neighborhood and Housing Services Department, will present to each city-initiated TIRZ board – Houston Street, Westside, Midtown, and Mission Drive-In – with a funding request ahead of the Sept. 12 City Council vote on the $2.9 billion budget. She will request $1.5 million from those boards, too, except for Mission Drive-In, which will be asked for $230,000 because it has fewer funds available.

The Inner City TIRZ has the largest fund, with a $10 million balance that is not currently promised to a project.

State law allows for TIRZ money to be used for affordable housing in and outside the zone, said Soto. However, the conditions placed on the $1.5 million by the board could lead to less flexibility in how the City acquires property for affordable housing, she said.

“We need those near-downtown areas to continue to be affordable,” Soto said.

A portion of these funds will be used to purchase land and property in gentrifying areas to preserve affordable housing stock in near-downtown neighborhoods. As part of this pilot, the City plans to partner with developers, who could sell to low-income families, she said, and the funds are slated to focus on gentrifying areas in City Council Districts 2, 3, and 5.

The amendment as worded makes the funding less flexible across the boundary lines, Soto said.

The City needs to be more aggressive when competing with private, market-rate developers or home flippers for highly sought-after properties, she said. 

But before landing on the amendment’s language, the board talked about limiting the money solely to projects in its boundaries. Soto said she was worried that would have severely impaired the effectiveness of the program.

“We’re coming to you to lead on this effort,” she said, to pool resources to make a citywide impact. “If you set that [precident], the other TIRZ [boards] might do the same and then we’ll lose the impact and we lose the opportunity.”

Rather than limit the money to projects strictly within the zone, the board ultimately added language that instead gives projects in the zone additional preference when the City is considering how to spend that zone’s dollars. 

“We hope that does not happen with the other requests,” Soto said after the meeting via email. 

Affordable housing was identified as the top concern of residents who participated in online and in-person budget events, according to SASpeakUp, the City’s public engagement arm. It also was identified as a priority of City Council this summer. TIRZ funding requires approval from its board and from City Council. 

Bexar County Commissioner Tommy Calvert, who serves on the Inner City TIRZ board, said one of the “glaring deficits” in the City’s plan is that District 1 is left out of the pilot.

“They definitely are crying out” about gentrification, Calvert said. The Inner-City TIRZ overlaps with District 1 in Southtown and Lavaca but does not include the portion of District 1 north of downtown where property values continue to rise.

The Inner-City Tax Increment Reinvestment Zone stretches from South of downtown to the East Side, loosely bounded by Fort Sam Houston to the north and Martin Luther King Jr. Drive to the south.

Courtesy / City of San Antonio

The Inner-City Tax Increment Reinvestment Zone stretches from south of downtown to the East Side, loosely bounded by Joint Base San Antonio-Fort Sam Houston to the north and Martin Luther King Jr. Drive to the south.

Soto said they will look for opportunities in those areas, but much of the land is already too expensive there and would require a big chunk of the pilot program’s budget.

“This TIRZ has stimulated the largest amount of revenue and the largest amount of gentrification,” said Calvert, who would prefer to see the area receive its fair share of affordable housing assistance.

City Council is scheduled to vote on the fiscal year 2020 budget on Sept. 12. Before then, it will review portions of the budget in several more meetings. SASpeakUp will take input from the community through a surveyan event this Saturday, 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.

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