Developers in some near-downtown neighborhoods no longer would get city incentives under a new plan after officials acknowledged that a proliferation of high-density projects are changing the character of those neighborhoods in unanticipated ways.

Instead, efforts would be focused on downtown itself, where hotels predominate and incentives have not had the desired outcome of fostering residential developments.

The new Center City Housing Incentive Policy would be better tailored for the challenges of building housing downtown, including the high costs of real estate, city officials said at Wednesday’s meeting of the council’s housing committee.

“We have to try to offset those costs through our incentive programs to make (downtown) viable” for residential projects, said Ramiro Gonzales, who is the redevelopment officer at the city’s Center City Development and Operations Department.

It also would address the concerns of residents who have been battling to keep their near-downtown neighborhoods from being overrun by development, Assistant City Manager Lori Houston said. Neighborhoods such as Five Points and most of Tobin Hill and Lone Star would be left out, although the Lone Star Brewery site that is being primed for development would remain inside.

The housing committee voted unanimously Wednesday to present the changes before the full council, which is expected to vote on them in June.

Committee members said they expect the new boundaries to run into some local opposition for seeming “restrictive,” as District 10 Councilman Mike Gallagher put it.

The geographic reach of the policy — which offers low-interest loans, waivers of city fees and property tax relief for new housing — would shrink to about 5.2 square miles including downtown, the near West Side, the near East Side, The Pearl area and part of Southtown. It currently spans 36 square miles centered on downtown but identifies the innermost neighborhoods as “targeted growth areas” eligible for larger incentives.

Developments outside the CCHIP boundaries still could get incentives, but the incentive packages would have to be designed and approved on an individual basis, officials said. Council approval is not required for CCHIP incentive packages.

“This is no way restricts our ability to incentivize projects outside the boundary,” Gonzales said.

The changes would increase the size of the “urban core,” where projects are eligible for the highest level of incentives.

The current area covers about 0.4 square miles in the central part of downtown, while the new area would span the entire 1.7-square-mile central business district, bringing Hemisfair into the fold.

Construction loans for “urban core” projects would be forgivable after seven years — in other words, the loans wouldn’t have to be paid back if developers met certain conditions.

Downtown has scored some big residential projects lately — including two developments at Hemisfair and a 10-story luxury apartment tower on the River Walk — but it hasn’t enjoyed the housing growth seen in areas like King William and the stretch of Broadway near The Pearl. Many areas of downtown remain desolate, and many of the new developments announced recently have been hotels.

The alterations to CCHIP could change that, officials said, building on the upcoming $175 million revitalization of San Pedro Creek and a new federal courthouse that Congress is expected to approve for Santa Rosa Street.

“Those are going to be catalysts,” Assistant City Manager Lori Houston said at the housing committee meeting. “We want to make sure we have the tools to allow that to happen.”

Mayor Julián Castro and the City Council unanimously approved CCHIP in June 2012 with a condition that it would be re-evaluated for extension after four years; their goal was to create 7,500 housing units in the downtown area by 2020. The program was part of Castro’s “Decade of Downtown” initiative to promote residential and commercial development in central San Antonio.

Forty-two developments with a total of 4,288 housing units have taken part in CCHIP — including many that are under construction or in design phase — city documents show.

About 2,700 of those are in the downtown area, while another 1,981 downtown units have been built outside the CCHIP program.

Overall, 4,695 housing units have been built in the greater downtown area, meaning the city has reached 63 percent of its goal to add 7,500 units downtown by 2020, according to the city.

Through CCHIP, the city has doled out $53 million in incentives for projects representing a total of $707 million in private investment, officials say.

“A more targeted approach toward incentives, I think, makes all the sense in the world given the fact that we’re halfway through the housing goal that we set,” District 8 Councilman Ron Nirenberg, who is on the housing committee, said after the meeting Wednesday.

Gallagher, whose district isn’t included within CCHIP’s boundaries, says he supports the changes to CCHIP because of the importance of preserving neighborhoods.

Developers of recently announced projects have said they plan to apply for incentives under the program, including those of a 30-story apartment tower along the River Walk and of a $165 million mixed-use development at the northwest corner of Hemisfair. The Cellars at Pearl apartment tower under construction at The Pearl is making use of the policy.

The proposed changes include several more rules to benefit downtown projects. Only “urban core” projects could receive full waivers of a SAWS impact fee; currently, all CCHIP projects can get a full waiver. The “urban core” projects also would be eligible for larger loans for retail and office space.

Under the changes, every project receiving CCHIP incentives also would be required to go through the city Historic and Design Review Commission — whether or not they are in a historic district — giving the city more control over design.

The Center City Development Office is putting together a separate incentive policy for the areas around the missions, which were declared World Heritage sites last fall and have sparked some passionate battles over plans for high-density development, officials said at the meeting.

The policy area could stretch between César E. Chávez Boulevard and Mission Espada, Gonzales said. City staffers are studying the housing market in that area to figure out how to design the policy for it, he said.

rwebner@express-news.net