Democratic presidential candidate Julián Castro wants you to know he knows the rent is too high.

Families are spending too much on housing, leaving them crowded in tight quarters or homeless, the former U.S. Housing and Urban Development secretary said Jan. 12 as he announced his candidacy. Housing affordability in the United States, Castro said, is now in crisis.

“That’s going to change,” he told a crowd of more than 1,000 people gathered at Plaza Guadalupe on San Antonio’s West Side. “We will invest in housing that’s affordable to the middle class and to the poor.”

But in Castro’s backyard, housing advocates say the former San Antonio mayor, like most of his predecessors, failed to craft a policy squarely aimed at the area’s need for affordable housing.

“It wasn’t as big a priority as there was a need for,” said Rod Radle, former executive director of affordable housing nonprofit San Antonio Alternative Housing Corp.

An affordable housing crunch now looms over the city. Housing costs have risen faster than incomes since 2010. Nearly half of the city’s renters spend more than 30 percent of their income on housing, according to a report released last year by Mayor Ron Nirenberg’s Housing Policy Task Force. One in five San Antonio families that own their homes pay a similar percentage on their mortgage.

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Meanwhile, the city’s housing stock has tightened, fueling fears that the region won’t have enough residences to house the more than 1 million people expected to move here in the coming decades.

Under Castro’s watch, the city set a goal to reduce the amount of occupied housing units that cost more than 30 percent of families’ income by 2020 — but will likely fall short.

And a city housing incentive program key to Castro’s “Decade of Downtown” came under fire in the last two years for handing hundreds of millions of dollars’ worth of incentives to developers to build housing well out of reach of most San Antonians.

A few gains

Castro’s record on affordable housing has a few bright spots.

He was “instrumental” in helping the city land several affordable housing projects and the federal funds to finance them, said Lourdes Castro Ramírez, former CEO of the San Antonio Housing Authority. That includes nearly $30 million in HUD grants that went toward redeveloping the Wheatley Courts public housing complex on the East Side into a 414-unit mixed-income development, part of a broader effort to rejuvenate the community.

Castro tapped Radle to serve on the Hemisfair Park Area Redevelopment Corp.’s board of directors in part to help insure the park’s build-out includes some affordable housing, Radle said.

Now, developers must set aside at least 5 percent of residential units for households making 80 percent or less of the area median income, Radle said.

As mayor, Castro took a broad approach to solving regional economic woes that can contribute to problems with housing affordability, Castro Ramírez said. She noted his initiatives such as Pre-K 4 SA, the sales tax-funded early childhood education program, and his push for more housing downtown, itself an effort to generate economic activity.

Castro Ramírez, who left the housing authority in 2014 to become Assistant Secretary of Public and Indian Housing at HUD under Castro, chaired Nirenberg’s housing task force.

“You can’t look at housing on its own,” she said. “You have to look at the condition of the housing, the resources and support that families that live in public housing or low-income housing, and figure out how to improve their quality of life or their standing.”

Castro Ramírez later added, “I think (Castro) was thinking much more holistically. Even with bringing more housing units to downtown, I think it was an economic development strategy, creating more job opportunities.”

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In his five years as mayor, Castro “placed unprecedented attention on revitalizing the city’s urban core, including calling for the first-ever round of East Side summits and the creation of the Inner City Reinvestment Infill Policy,” campaign spokeswoman Jennifer Fiore said in a statement.

Castro’s policies encouraged “$4.4 billion of total investments in once overlooked areas, including the development of 4,200 affordable housing units that would not have otherwise happened,” Fiore said.

A city memo shows that those 4,200 units contain a mix of affordable and workforce housing. Workforce housing is generally for families making 80 percent or less of the area’s median income — which hovers around $49,000 in San Antonio — while affordable housing typically means for households earning 60 percent or less of the area median income.

In his tenure as HUD secretary — from July 2014 through January 2017 — Castro backed initiatives to support low-income housing, issuing millions in grants through HUD’s Choice Neighborhoods and Promise Zones programs. In 2016, Castro established the National Housing Trust Fund, which invested $174 million in affordable housing units for extremely low-income households.

“As HUD Secretary, Castro spearheaded a comprehensive effort at the agency to work with local municipalities across the country to blunt the rising affordability crisis nationwide,” Fiore said. “His eye has long been on this challenge, and he will continue to address it as a presidential candidate, and, if elected, as president.”

High-dollar housing

As mayor, Castro focused much of his housing attention on the city center, where higher-rent units and pricey condos have since proliferated.

Construction of new, market-rate housing was the linchpin of Castro’s “Decade of Downtown,” an effort to bring more residents, retailers and companies to San Antonio’s long-neglected urban core.

Castro’s SA2020 initiative — a long-term planning measure that established goals for downtown development, education and health, among other areas — set a target for new downtown housing units: an additional 7,500 by 2020. The thinking was build rooftops and retail and firms would follow.

“You have to have so many housetops if you’re going to get commercial development and grocery stores,” Radle said.

But downtown construction is pricey, owing to high land costs, zoning regulations and upgrades to decades-old streets, sidewalks and drainage.

To encourage developers to build downtown, the city developed two incentive programs: the Inner City Reinvestment and Infill Policy (ICRIP), which waives SAWS and city fees for construction in low-income and undeveloped neighborhoods, and the Center City Housing Incentive Policy (CCHIP) — a program that gives developers property tax rebates and construction loans to build housing downtown.

The incentives worked. Since 2012, the programs sparked at least $4.4 billion worth of investments and subsidized at least 6,500 housing units, 230,000 square feet of retail space and 28,000 square feet of office space.

The city is on track to hit the SA2020 goal of an additional 7,500 residential units in the downtown area, according to a report released this week.

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But the incentives drew criticism from council members and community activists who questioned whether the city needed to subsidize market-rate housing projects while the region suffers from a shortage of affordable housing.

“They normally went to developments and developers who had projects ready to move forward,” Radle said of the incentives. “For a lot of nonprofit developers, that’s just not the case.”

City officials gave almost $102 million in incentives to developers through CCHIP from 2012 to 2017. Of the more than 6,500 units CCHIP helped fund, less than a quarter — about 1,500 — were set aside for affordable housing.

Among the projects that received CCHIP funds: the Arts Residences and Thompson San Antonio hotel and residential tower under construction at 123 Lexington Ave., near the Tobin Center for the Performing Arts. Houston-based DC Partners received more than $10 million in incentives, the largest package in the program’s history, to develop the $116 million high-rise, which will have more than 60 condos costing as much as $4.5 million.

Officials also awarded $3.7 million in CCHIP incentives to Pearl developer Silver Ventures for the Cellars at Pearl apartment complex. The average rent at the upscale development was $3.14 a square foot when it opened in 2017 — well above the average area rent of $1.16 a square foot.

The city also awarded nearly $2 million through CCHIP to a controversial South Side development that displaced more than 100 low-income families from the Mission Trials mobile home park. Castro voted against a zoning change to allow the development in 2014, but was overruled by a 6-4 council vote.

“It was said very poignantly that we move mountains to create jobs in this city. We move mountains to preserve our aquifer. We move mountains to save bats. And we move mountains to preserve historic buildings,” Castro said at the time of the vote. “And we need to move mountains for people, which is ultimately the reason we serve you all.”

In November 2016, the city awarded $1.8 million through CCHIP to developers to build the Mission Escondida Luxury Apartments where Mission Trails sat. None of the development’s 360 units are considered affordable, according to figures provided by the city.

Missed opportunity

In response to the Mission Trails development, Castro convened a panel in July 2014 to figure out how to encourage development in needy neighborhoods without displacing residents.

The committee’s formation marked a turning point in Castro’s attention to affordable housing, said Trinity University urban studies professor Christine Drennon. But the topic faded from view after Castro left for HUD later that July and the committee presented a report on how to tackle gentrification to City Council in May 2015, she said.

“His tenure here was cut really short,” said Drennon, who served on the committee. “Who knows what he might’ve done?”

In 2016, while serving as HUD secretary, Castro began “raising the alarm for San Antonio to modify its incentive programs and make a greater investment in affordable housing,” Fiore said.

“I'm convinced that if San Antonio does not take bolder steps now to enhance housing affordability, then in a few years this will give rise to a decade of displacement,” Castro said in October 2016 after he visited the East Meadows housing development, which replaced Wheatley Courts on the East Side.

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In December, City Council retooled the Castro-era incentive programs after pausing CCHIP for nearly a year, building in affordability requirements. The changes also included barring housing units for sale at $360,000 or more or apartment complexes with average rents of $2.75 a square foot or higher from receiving subsidies.

“Now that there has been an infusion of incentives to get market-rate units in the downtown area, there needs to be as much, if not more, emphasis on developing the truly affordable, rent-restricted units that will be a complement to that,” Radle said.

Home prices in the San Antonio area have risen more than 20 percent since 2009, outpacing income growth. Ten years ago, the median home value in San Antonio sat at $103,700, estimates from the U.S. Census Bureau show. By 2017, that figure had risen 22.5 percent to $127,000.

Meanwhile, San Antonio’s median household income only rose 15.4 percent from $43,087 in 2009 to $49,711 in 2017.

But the city’s housing stock is falling far behind its economic growth. Nirenberg’s task force found that the number of households grew by 6,500 annually from 2005 to 2016 but San Antonio’s job base grew by 14,900 on average annually.

The task force has laid out five strategies to tackle the problem, including boosting the city’s investment in housing and increasing affordable housing construction. Outgoing City Manager Sheryl Sculley also set aside $25 million for affordable housing programs in the city’s current budget.

“It’s a start,” Radle said of the $25 million. “It’s a drop in the bucket, though.”

Joshua Fechter is a San Antonio-based staff writer covering real estate, economic development and philanthropy. Read him on our free site, mySA.com, and on our subscriber site, ExpressNews.com. | jfechter@express-news.net | Twitter: @JFreports