Amid calls for more discussion, City Council moves forward with CCHIP vote

by Ben OlivoDecember 13, 2018
The City Council discusses the Center City Housing Incentive Policy on Wednesday. BEN OLIVO | HERON

Despite strong pushback from prominent community groups, the City Council said it was proceeding with a vote on Thursday that will likely reinstate the Center City Housing Incentive Policy, the driver of the downtown area's metamorphosis the past six years.

A year ago this month, Mayor Ron Nirenberg suspended the policy, which doles out tax rebates to developers, among other incentives, and instructed city staff at the time to bake affordability requirements into it. As a result, throughout 2018, the Center City Development and Operations (CCDO) department has been revising CCHIP so that it produces more affordable units, and has made other adjustments so that the policy is more palatable to the general public.

"We often throw out a phrase, 'Perfect is the enemy of the good,' I think to often," Nirenberg said, "but I do think in this very moment, we risk that very thing."

Download the CCHIP presentation given to the City Council on Wednesday.

CCHIP changes
Here are three key revisions to the Center City Housing Incentive Policy (CCHIP), which the City Council will consider on Thursday.
» Tax rebates - Developers would receive a 75-percent rebate on the city portion of their property taxes; the other 25 percent would feed into a housing affordability fund.
» Citywide - Instead of just downtown, CCHIP would apply to the 13 regional centers outlined in the SA Tomorrow Comprehensive Plan.
» No luxury - Luxury units defined as condos priced at more than $360,000 and apartment rents priced at more than $2.75 a square foot would be ineligible for incentives.
Read a more detailed summary of the changes being proposed.

The City Council discussed the policy Wednesday during its regularly scheduled B session, which lasted more than three hours. It also discussed changes to the Inner City Reinvestment Infill Policy, which waives city development and SAWS impact fees, which would blanket the entire city.

The marathon discussion was bookended by criticism. Before the meeting, COPS/Metro Alliance held a press conference outside City Council chambers, calling for a delay in a vote on CCHIP until, what they called, a legitimate public process could begin.

"Where are incentives for homeowners in communities impacted by new development?" Linda Davila, a leader with COPS/Metro Alliance, said.

After the meeting, the city held its first public hearing strictly devoted to CCHIP, after a year of targeted meetings with near-downtown neighborhood associations, and of receiving feedback from larger community initiatives such as the SA Tomorrow Comprehensive Plan and the Mayor's Housing Task Force. During the hearing, citizens spoke in favor of pushing forth CCHIP, and others spoke in favor of delaying the vote—taxpayers who ranged the gamut from downtown developers to grassroots activists.

It was a pretty balanced discussion.

The council's discussion, however, was lopsided in favor of restoring CCHIP as soon as possible.

District 4 Councilman Rey Saldana speaking at a City Council B session meeting Dec. 12, 2018. BEN OLIVO | HERON

The lone dissenter was District 4 Councilman Rey Saldaña, whose main reason for delaying the vote was to give more people time to understand the complexities of CCHIP. He also took issue with the city's definition of "affordable housing," which is based on the area median income (AMI)—$66,800 for a family of four—provided by the U.S. Department of Housing and Urban Development. HUD's definition includes the greater San Antonio area, which includes cities such as New Braunfels and Boerne. HUD's figure, therefore, does't reflect the average working class San Antonio citizen, Saldaña said.

"It makes no sense to me," Saldaña said. "We care about San Antonio's area median income. I don't care about Comal (County) and New Braunfels. It serves no purpose to use it in this case. Can we see a proposal that uses our definition and not HUD's?"

"The projects would not work with the CCHIP incentive package (alone)," Assistant City Manager Lori Houston told Saldaña. "We would have to come back with a greater incentive package to make that work."

After the meeting, Jennifer Gonzalez, executive director of Alamo Community Group, a nonprofit that builds affordable housing, said lenders, or banks, won't underwrite projects that use an AMI other than HUD's standard.

However, Saldaña is not alone in his assessment.

In its final report released in August, the Mayor's Housing Policy Task Force, for example, uses the AMI of $49,268, which is taken from the 2016 U.S. Census Bureau's American Community Survey.

The AMI drum is one District 9 Councilman John Courage has been beating in housing discussions throughout 2018.

"So when we say we're offering 80 percent AMI (apartments offered to people making $53,440), we know it really isn't affordable for the hundreds of thousands of people who live within the city of San Antonio," Courage said.

In the revised CCHIP, for developments that are five stories or shorter, developers would be required to offer 10 percent of their units to people making 80 percent of the HUD AMI, and 10 percent to people making 60 percent of HUD's AMI ($40,800). If the development were to be built higher than five stories, the developer won't need the affordability requirement, Houston said, because it would require more expensive materials, such as steel and concrete, thus hiking up the cost.

Courage then pivoted to the other big topic: displacement.

Currently, the city's Housing and Neighborhood Services Department is drafting a "risk mitigation policy," which will address displacement caused by city incentivized development, changing neighborhoods, and the threat of eviction, the department's director, Veronica Soto, said. The city has allocated $1 million to assist residents in cases of displacement. The department is simultaneously crafting a "displacement impact assessment"—"the scope of that is what we are working on now," Soto told council.

In an interview earlier in the day, it was unclear coming from Soto whether the assessment would factor in potential displacement—whether it be renters who have become priced out of their neighborhood, or homeowners who can no longer afford to pay their property taxes—caused by CCHIP-incentivized developments. The Mayor's Housing Policy Task Force recommended a displacement impact study be conducted for every public project that exceeds $15 million, such as the San Pedro Creek Culture Park. Not necessarily CCHIP.

Editor's note: The Heron has been covering CCHIP discussions extensively, and will cover more of the subtopics discussed after Thursday's council vote. We'll also have some final analysis on Sunday.

Contact Ben Olivo: 210-421-3932 | ben@saheron.com | @rbolivo on Twitter

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