Multi-family housing developers looking to take advantage of City tax rebates, fee waivers, and forgivable loans will now have fewer neighborhoods to choose from as new rules approved by City Council on Thursday shifted and shrunk the boundaries of the Center City Housing Incentive Program.

Rather than spread out incentive packages of varying levels throughout the center city, the new arrangement will focus the development within the Central Business District and neighborhoods closest to it, explained Center City Development and Operations interim Director John Jacks.

The new structure consolidates four incentive tiers into two: the Central Business District, and the Greater Downtown Area. Projects in the Central Business District will be eligible for more substantial incentive packages.

The new CCHIP boundaries (in red) compared to the former incentive tiers (orange, yellow, blue, green). Image courtesy of the City of San Antonio.

Neighbors in historic districts like Lavaca, King William, and River Road were concerned about the program incentivizing apartment complexes in areas largely comprised of single-family homes. City staff took those concerns very seriously as they began to consider new boundaries for the program as part of a scheduled review earlier this year, Jacks said. Another factor that led to the changes was that plenty of multi-family projects have already popped up or are about to pop up north of the Pearl Brewery in so-called “River North.”

“Investment in River North occurred after (CCHIP began) and we can expect to see the same along the San Pedro Creek area,” Jacks said.

An amendment to the new incentive structure added by Councilman Roberto Treviño (D1), and approved by Council, limits development of apartment complexes in lots zoned for low density housing. Basically, if a developer has to rezone its property for an apartment complex, it would not qualify for the CCHIP.

Established and in-progress housing developments. Graphic courtesy of the City of San Antonio.

This closes a possible loophole neighbors feared would allow a developer to buy up property, demolish houses, and then apply for incentives to build apartment complexes, Treviño said.

Developers would still be eligible for other “more flexible” incentives as part of the Inner City Reinvestment Infill Policy, said Assistant City Manager Lori Houston. “This is just a way to further protect historic neighborhoods.”

Since CCHIP was initiated by City Council in 2012, the City has paid out $53 million in incentives for $708 million in private investment. The SA2020 goal to add 7,500 housing units downtown by 2020 is within reach, according to Houston, as 4,699 units have been established and 1,213 are in the pipeline this year. The City hopes to close the 1,588-unit gap with plenty of time to spare to exceed its goal.

Graphic courtesy of the City of San Antonio.

The batch of changes City Council approved today include the new boundaries, increased incentives in the Central Business District, a requirement that projects go though the Historic and Design Review Commission process, extending the CCHIP program for two more years, and increasing the density of units per acre to eight for adaptive reuse projects and 16 for new construction.

As the city finalizes its long-range SA Tomorrow plan, Jacks said, they will begin to formulate programs similar to CCHIP that can incentivize development tailored to the eight different “activity centers” outlined in the plan.

Councilwoman Shirley Gonzales (D5) abstained from the vote on Thursday as she was uncomfortable with adding Treviño’s amendment without a more thorough vetting process.

Top image: Southtown Flats. Photo by Kathryn Boyd-Batstone.

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