The Acero apartments under construction last September. Photo by Ben Olivo | Heron

If city charter amendments excite you, if, when you type "m" into your browser, Municode pops up, if articles of incorporation make you want to put on Boyz II Men, you’ll enjoy reading this post.

If, however, you're like most people and would rather bang your head against a brick wall repeatedly than ingest more than three words of municipal prose, BUT you plan to vote in the May election, you'll want to keep reading.

On the ballot will be a proposal to change Section 98 of San Antonio's city charter. 

Currently, that section limits San Antonio's voter-approved bonds to public works projects such as for streets and sidewalks, parks, and drainage. You may remember the 2017-2022 bond program, an $850 million package composed of 180 projects across the city that voters overwhelmingly approved three years ago. 

If approved by you, the amendment would broaden the charter language, allowing for bond dollars to be spent directly on the creation or preservation of what officials call "affordable housing," or sometimes "workforce housing"—housing that's priced for people making below the area median income. Those housing projects, of course, haven't been determined.

A change to the city’s charter would simply set the stage for bond dollars to be able to be spent on housing, and voters would decide if they pass in the next bond election, which is likely to occur in May 2022.

So, what kind of "affordable housing" projects could potentially be possible if the city charter is changed?

In recent weeks, members of the City Council and the Housing Commission asked city officials for examples. Here are some, from the mouths of City Attorney Andy Segovia and Assistant City Manager Lori Houston.

If voters amend Section 98 of the city charter, San Antonio bond dollars could fund:

» construction of affordable housing projects (either directly, or by infusing cash into a project built by a developer, either for-profit or nonprofit; also known as gap financing)

» rehabilitation of existing housing stock, which could include the San Antonio Housing Authority's aging public housing communities, such as the Alazan Courts on the near West Side

» construction of a homeless shelter, or a homeless-related facility

» land banking, meaning the city would acquire land and set it aside for future housing projects

» the Section 8 voucher program, although Segovia didn't specify exactly how this would work

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It's worth emphasizing that these are possibilities, ideas, examples, should voters amend the charter two months from now. There is a long and involved community process that determines the projects—what they are, how much they cost, where they're located—which the City Council ultimately must approve just to place them on the ballot. Then, it’s up to you to say "yes" or "no."

The language would change from ...

Current charter language

to this ...

Proposed charter amendment language

...

Is there a need for more 'affordable' housing?

Under Mayor Ron Nirenberg, San Antonio has prioritized the construction and rehab of below-market housing. 

In September 2018, the City Council adopted the policies put forth in San Antonio's Housing Policy Framework, concluding a year of work by members of the Mayor's Housing Policy Task Force and community partners.

The original report identified a need for 18,681 affordable units to be created over the next 10 years. But many of the task force's original housing goals have already been met, and even doubled for units for household at certain income levels, according to the city. Since last year, the city's housing department has begun recalibrating San Antonio's housing goals.

Over the summer, housing officials determined the below-market housing shortage to be more in the range of 47,000. While the Neighborhood and Housing Services Department (NHSD) continues its recalibration, let's look at more concrete numbers.

The San Antonio Housing Authority has roughly 6,000 public housing units, which serve the city's most vulnerable low-income residents. Compare that figure with the 40,000 people who are on SAHA's waiting list, and you can judge for yourself whether San Antonio is in a housing crisis.

Up until now, San Antonio used mostly indirect methods of supporting below-market housing. Rebates on city property taxes, which are given to developers of any type of housing in urban areas or regional hubs identified in the SA Tomorrow Plan, is the most popular incentive. They can add up to several millions of dollars and are often criticized for helping to built primarily market-rate housing.

The city also waives development and San Antonio Water System (SAWS) fees, a savings often in the hundreds of thousands of dollars to developers. Until recently, it started providing grants from its tax increment reinvestment zones, or TIRZs, which were originally created to fund infrastructure upgrades in San Antonio. In the last year or two, they've been used as gap financing for housing projects that include more affordable rents.

Then there's the bond dollars themselves. The 2017-2022 program was the first time San Antonio used the bond to help create below-market housing. Voters approved $20 million for ancillary housing projects. Instead of the bonds funding housing construction costs, they covered the cost of infrastructure, laying down the groundwork for a developer to then come in and build the housing.

The result so far has been four projects, totaling $18.8 million in bond spending, that the city said will yield 592 affordable units.

There's some trepidation about what the charter change could mean. Before the City Council voted in February to place the amendment on the May ballot, some described the measure as a pandora's box that could open up the possibility of a major sports stadium being funded by bond dollars. City officials responded by saying any bond project must be approved by voters, and that there would be several months of public input before it would even make it onto a ballot.

Others said the language should be more specific to housing, but city officials said they liked the fact that it was open ended, which allows for economic development-type projects to be placed on future bond ballots, as well.

...

Housing limitations

City officials say the current city charter language is too restrictive.

"We're the only large Texas city that I know of that has limited itself to public works," Segovia told the City Council recently.

In the bond program approved three years ago, homeownership, officials say, is challenging because of a 30-year covenant that states only families making 80% of the area median income, or AMI, can own the home. This might reduce the sales price, or prohibit the homeowner from owning the home indefinitely should their income increase.

[ Scroll down for a chart showing AMI levels. ]

If the language was broadened, each development could have its own covenants that would make sense for each site, Segovia said.

Loosening the rules would also allow the city to target the lowest-income families in newer housing developments, officials said.

...

The core services argument

One councilman, District 10's Clayton Perry, said bonds should stick to what he called core services. He pointed out how City Manager Erik Walsh and other top city officials have said the next bond program is likely to be somewhere in the range of $200 million less than the last one in 2017, which was $850 million. That means less funding for streets and sidewalks, drainage, and other public works upgrades should below-market housing take up a chunk of the next bond total.

"Right now, we have over 400 miles of F streets, that means failed streets, with a ticket of over $800 million to fix," Perry said at the Feb. 11 council meeting, referencing information he received from the Public Works department. "D Streets that are getting close to be F streets: $284 million."

When also factoring in San Antonio’s drainage needs, sidewalk repairs, and maintenance to city-owned facilities, the price tag is roughly $2 billion.

"Our yearly maintenance program, we will never catch up," Perry said. "We will continue to fall further back on these requirements. Our streets don’t get better, they get worse."

Nirenberg disagreed with Perry’s argument that housing is not a core service the city should be funding.

"Our goals should be to reduce the number of cost-burdened households in our community," Nirenberg said during meeting.

"I think most would agree that housing infrastructure is no less essential than energy, water or transportation," he said.

It will be interesting to see if voters agree with Perry. In 2017, all 10 districts overwhelmingly approved the $20 million housing bond. It’s worth noting that the lowest approval percentage came from District 9 district at 62%. However, District 9, which is John Courage's district, had the most number of people voting in favor for the proposition (15,805)—by far—considering none of the construction sites offered were located in the district.

...

Pandora’s box?

Aside from housing, future bond proposals could also include what officials described as economic development projects.

Such projects, according to Houston and Segovia, could be:

» providing some kind of incentive to lure a corporation

» a relief package for small businesses suffering from crises such as the current pandemic

City attorneys have argued repeatedly that San Antonio is only undoing a restriction it placed on itself in 1997, when there was backlash against local dollars being spent to build the Alamodome.

During a recent Housing Commission meeting, commissioner Sarah Sanchez, who serves as the executive vice president at the San Antonio Economic Development Foundation, said recruiting corporations would ultimately make housing more affordable by lifting up wages.

"The ability for San Antonio to attract and compete for jobs is highly important to creating affordable housing in San Antonio," Sanchez said. "That basically rises the tide, increases income levels and the ability to afford housing, so to speak."

"It is a smart move and helps San Antonio to be more competitive."

...

The Alazan Courts taken on Feb. 3, 2021. Ben Olivo | Heron

Helping SAHA

Now under new leadership, the San Antonio Housing Authority (SAHA) has said it wants to maintain the current number of public housing units (an about-face from the previous administration’s policy) and even expand the total. It also said it wants to self-develop, meaning it would not seek to partner with an outside developer.

It’s still unclear what the funding sources will be, although SAHA expects federal housing dollars to become more available under the Biden administration.

Locally, housing advocates have asked whether the charter amendment would allow for city dollars to go toward SAHA’s federally-owned public housing stock.

City officials are optimistic.

The change to the charter, which is currently an impediment, would certainly open up the possibility. The only hurdle would be the section of the city charter (Article I, Section 3, Paragraph 5) that addresses urban development, which prohibits the city from transferring property to housing authorities. Officials believe San Antonio would have the option to fund the rehabilitation of housing SAHA already owns.

"If SAHA owns a property and they need assistance with the rehab of that property or public improvements from that property, we would seek an opinion from the (Texas attorney general) because we believe this provides the flexibility to do that," Houston told the council.

...

Why now?

Houston and Segovia told the City Council and Housing Commission recently that the charter would have to be changed this year, in order to open up the language and thus the options for the next bond vote, which could happen in May 2022. The city’s charter review committee had eyed such a change in recent years, but it didn’t make any recommendations because charter proposals added by the the firefighter’s union petition took up the committee’s bandwidth.

"We can only have changes to the city charter every two years," Segovia said. "Actually, given the timing of when the firefighter petition changes were passed, the earliest we can make a change to the city charter is this coming May."

"If there is really any hope of having a robust housing area for our bond projects and our upcoming bond elections, we have to get it changed in the city charter this May," he said.

Many have expressed concern that such a change, which usually goes through a months-long public input process via the city charter review committee, is being fast-tracked.

"I also was wondering why the charter review commission wasn't reconvened," said Jessica O. Guerrero, who serves as chairwoman of the Housing Commission. "I understand the timeline was rushed, especially this last year, presented challenges. I just see this as a such a big critical step in continuing to invest in the goals of the Mayor’s Housing Policy Task Force, that the Housing Commission is charged with oversight of … that process set new precedent in public participation … and this process for amending the language disrupts that progress."

It’s unclear who generated the idea of changing the charter at this time. Many of the City Council members seemed surprised that they had to decide whether to place the amendment on the upcoming ballot, a concept that was presented to some council members late last year. The Housing Commission also seemed unaware of the potential change.

In an email, the Heron asked Houston and NHSD Director Vero Soto who from the city generated the idea. They did not respond.

...

On Feb. 11, the City Council overwhelmingly approved in a 10-1 vote to place the charter amendment on the May 1 ballot. Here’s how they voted.

» Roberto Treviño, District 1 — y
» Jada Andrews-Sullivan, District 2 — y
» Rebecca Viagran, District 3 — y
» Adriana Rocha Garcia, District 4 — y
» Shirley Gonzales, District 5 — y
» Melissa Cabello Havdra, District 6 — y
» Ana Sandoval, District 7 — y
» Manny Pelaez, District 8 — y
» John Courage, District 9 — y
» Clayton Perry, District 10 — n

...


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Setting It Straight: An earlier version of this article misidentified Clayton Perry's district. It's District 10.

Heron Editor Ben Olivo can be reached at 210-421-3932 | ben@saheron.com | @rbolivo on Twitter

The view from the Soto office building on Broadway. Photo by Richard Webner | Heron contributor

Now that Hixon-Cavender has finished construction of the Soto office building, the local partnership looks to the next phase of the mini-neighborhood it is developing on a key stretch of Broadway linking downtown and the Pearl.

Next up is a food-and-beverage market that will occupy two historic buildings behind the Soto and will include a courtyard for outdoor seating, said John Beauchamp, the chief investment officer for Hixon Properties. He calls it the Make-Ready Market, but that's a tentative name.

The partnership probably won't break ground on the market until the Covid-19 pandemic lightens its grip on the economy, he said.

Two buildings will house a food-and-beverage market behind the Soto. Photo by Richard Webner | Heron contributor

"I don't want to go too deeply into the planning, but I will say that we spent over a year designing the concept we have in mind, touring the country for relevant projects," Beauchamp said. "So what we will ultimately offer is going to feel very new for San Antonio, and it will bring the best of what we've seen throughout the country."

The partnership, between Hixon and the Cavender family, owns about 8.5 acres of property stretching roughly between Sixth Street and 10th Street along Broadway and Avenue B. The Cavender family once operated auto dealerships there.

Beauchamp declined to share much about what else the partnership plans to build on the sites, but said it will be a mixture of office, retail and residential uses. The office space will likely be concentrated on Broadway and the residential on Avenue B, he said. He emphasized a need for restaurants to serve the area's residents and workers in nearby office buildings, including the newly-built CPS Energy headquarters, a block west from the Soto.

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"In near-downtown districts that we've seen around the country, once the apartment market is established, more and more people are comfortable living in the district, and that demand brings more density," he said.

The six-story, 140,000 square-foot Soto offers high-end office space with wood columns and ceilings and tall windows offering panoramic views of the downtown skyline.

As of yet, no tenants have moved in since the construction was completed at the end of September. Leasing has been slow because of the pandemic, Beauchamp said. He declined to say whether any tenants have signed leases.

"I would prefer leasing be faster, but I'm not concerned because of the quality of the building, the location on the Broadway corridor, and the relevance of this building to employers who want to recruit and retain top talent," he said. "I think our building is particularly well-suited to lease in the post-Covid world because of some of the features we have to offer."

Those features include an air distribution system that pumps air through vents in the floor, unlike a typical building in which the air comes from ceiling vents and mixes more with "dirty" air, Beauchamp said. The building also offers outdoor working space, including balconies on its second floor.

The Soto, 711 Broadway, was completed last September by Hixon Properties. Photo by Richard Webner | Heron contributor

The completion of the Soto adds a large supply of class A office space—an industry term meaning high-end space—to the downtown real estate market. That kind of space is seen as important for attracting major companies and those in the tech sector. For many years, hardly any class A office space was added downtown while new office towers proliferated on the North Side. But the supply of such space has recently been increasing downtown, especially since the completion of the Frost Tower in 2019.

Three blocks down Broadway from the Soto, GrayStreet Partners is renovating the historic Light Building into office space geared toward creative businesses, and has signed architecture firm Ford, Powell & Carson and the San Antonio Express-News as its first tenants. Three-quarters of a mile in the other direction, Credit Human has built a 12-story new headquarters and Pearl developer Silver Ventures is constructing an eight-story office building called the Oxbow.

The Soto is unique among offices in Texas for relying on a timber frame structure rather than one of steel, Beauchamp said. Along with offering a distinctive aesthetic, the timber frame makes the building more environmentally-friendly because it avoids the carbon emissions that come from the production of steel and concrete, he said. The trees that supplied the timber pulled carbon out of the air, essentially trapping the pollutant in the building.

To build the Soto that way, the partnership hired a subcontractor from Vancouver, Canada, named StructureCraft, that was familiar with the method.

"That was a risk for us," Beauchamp said. "Any time you take on a new system in development, it takes a lot of time, thought and effort to make sure you're doing it right."

There are two retail spaces on the ground floor of the Soto, one of them well-suited for a coffee shop and the other for a restaurant, he said. Another area on the ground floor could be used for either retail or offices.

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Hixon-Cavender's plans for Broadway join other major mixed-use projects in the area. Aside from the aforementioned CPS Energy headquarters, at McCullough Avenue and the San Antonio River, work continues on the massive Flats at River North on Broadway and Avenue E, a 283-unit apartment building by NRP Group of Cleveland and the San Antonio Housing Trust Public Facility Corp. The project includes restaurant spaces.

On Avenue B, across from the CPS Energy headquarters, Pabst Brewing Co. plans to convert a warehouse into a "culture park" complete with an indoor skate park, a bar, a rooftop movie theater, an art gallery, and retail space.

On the other side of Broadway, on the 600 block of North Alamo Street, funeral home owner Robert "Dick" Tips wants to build a mixed-use mid-rise of at least 12 stories, which would include 266 apartments and 196 condos, a rooftop restaurant and retail on the ground floor.

Portions of Broadway are currently closed to traffic, including a segment in front of the Soto, as the thoroughfare's reconstruction continues. The work is part of a $42 million capital project in the 2017-2022 bond program that's turning Broadway, from East Houston Street to Interstate 35, from a car-heavy street into one that's more pedestrian friendly. It's expected to be completed by December 2023.

Richard Webner is a freelance journalist covering Austin and San Antonio, and a former San Antonio Express-News business reporter. Follow him at @RWebner on Twitter

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