Affordable housing developers should keep an eye on San Antonio.
Subsidies for that asset class could help kick off a range of housing development in central San Antonio, according to consultant HR&A Advisors, hired by Centro San Antonio and Visit San Antonio to create a strategy for downtown, the San Antonio Business Journal reported.
Incentivizing “deeply affordable” and affordable housing projects that cater mostly to residents making below the area median income is the best way for the city to spend its money because those projects are difficult to pencil, the consultant said. On the other hand, the city shouldn’t subsidize market-rate or luxury developments because incentives aren’t necessary for developers to make them work financially.
HR&A partner Thomas Simpson shared his math: A 125-unit deeply affordable project could require up to $32 million in subsidies, or $125,000 per unit, while mixed-income developments would have a $70,000 per-unit gap, totaling $18 million. The draft suggests adding project-based vouchers and establishing gap funding to address those needs.
“There’s a gap across the board, and there’s a policy decision about where you direct that subsidy, but we think that there are paths to delivering that market-rate housing that aren’t cash from the city,” Simpson said.
The objective is to create a downtown that serves San Antonio residents across all income levels, said Trish DeBerry, president and CEO of Centro San Antonio.
“The face of downtown is changing, and changing rapidly, so this is a point in time where we need to get ahead of the curve,” she said.
In addition to affordable housing, the consultant recommended activating public spaces, addressing parking constraints, enhancing pedestrian navigation and supporting local retail, all aimed at fostering a vibrant, community-centered downtown.
The recommendations will be presented to the San Antonio City Council early next year.
San Antonio has one of the hottest homebuilding markets in Texas. The city’s booming housing sector has attracted major builders like Miami-based Lennar, which has been leading in terms of construction and sales volume. One of the city’s main appeals lies in its level of affordability compared to markets like Austin and Dallas, making it a prime location for large-scale developers and individual homebuyers.
In addition to single-family homes, innovative residential projects are underway, such as the conversion of the Nix Medical Center into apartments along the River Walk, further diversifying San Antonio’s housing options.
— Andrew Terrell
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