How the City’s New Incentives Policy Helps Habitat

December 20, 2018

How the City’s New Incentives Policy Helps Habitat

This article originally appeared on the Rivard Report, a nonprofit, nonpartisan local news source all about San Antonio.

Though some policy issues were overlooked when City Council last week approved changes to and expansion of two downtown development incentive programs, Habitat for Humanity of San Antonio and other nonprofits support the new policy – however imperfect it may be.

Based on interactions with nonprofit community housing development organizations, Habitat generally felt City staff did a good job collecting public input. Each of those nonprofits is sensitive to the affordable housing needs of hundreds – if not thousands – of low-income families and makes a sincere effort to thoughtfully advocate for them and collaborate with the City to better serve San Antonio’s affordable housing needs.

We were direct and honest in our criticisms of the Center City Housing Incentive Policy (CCHIP) and Inner City Reinvestment and Infill Policy (ICRIP) and in communicating the changes we thought the policies needed. City staff listened and modified the proposed policies based on our and others’ requests over a period of several months. The end product included every recommendation and addressed every concern we collectively expressed, save for the unlimited City and SAWS fee waivers for affordable housing units all the nonprofits requested. City staff said that wasn’t in the City budget this year.

Assistant City Manager Lori Houston and her staff appeared sincere in wanting to create a better policy, and the changes reflect that. Houston also expressed interest in creating a survey to collect feedback throughout implementation and, thus, gather real-time data to evaluate what works/doesn’t work and determine how the programs impact both their users and the general public.

While some called for delaying the vote to collect more public input and further refine the policies, Habitat officials requested Council move forward with the vote due to an immediate need for the improved waiver program: Our organization had to delay installing water service on eight homes currently under construction when the vote was pushed back in November; without a useful waiver policy, we would have had to pay expensive impact fees.

Not having water service makes home building a lot harder, so unless we can secure waivers soon, we will have to stop construction on these homes. That would pose a severe setback for the low-income families for whom we are building. At $6,852 each, the impact fees for these eight homes are significant. In all, Habitat would have to pay $54,816 by the first week of January.

We will be submitting building permits for another 14 homes in January; without waivers we would have to pay approximately $18,200 up front in permit-related fees just to be able to start construction – and that’s not counting impact fees that follow. All of these homes are already matched to families who are in great need of stable, affordable housing because we don’t build homes speculating that we will find a buyer like traditional residential construction companies do. We find our buyers first, and then build for them.

These City and SAWS fees pose huge amounts for Habitat and the low-income families we serve. If we had to pay them, the number of homes we can build would decrease and some of the hard-working, financially stable, but low-income families would be disqualified from receiving one of our homes, which are sold to them at no profit. Last week’s changes to ICRIP, which was renamed the City of San Antonio Fee Waiver Program (FWP), will allow us to access more waivers and increase the number of affordable home ownership opportunities we can provide in 2019.

Habitat’s single-family homes are currently outside the expanded CCHIP boundaries, meaning we do not utilize that part of the program. However, other nonprofit projects – such as Alamo Community Group’s Museum Reach Lofts and Prospera’s Roosevelt development – are in the newly added regional center/transportation corridor territory. Still, all nonprofit projects that don’t fall within CCHIP’s boundaries instead apply for the FWP, meaning that program quickly runs the risk of becoming over-subscribed.

Come next week, 50 families will spend their first Christmas in their very own affordable home, and Habitat needs fee waivers to serve populations at these income levels.

  • Average Area Median Income (AMI) of Habitat’s 2018 home buyers: 51 percent
  • Average Annual Household Income in dollars: $30,958
  • Twenty-four of our home buyers earned between 30 to 50 percent of AMI
  • Fourteen of our home buyers earned between 51 to 60 percent of AMI
  • Ten of our home buyers earned between 61to 63 percent of AMI
  • Two of our home buyers earned between 64 to 70 percent of AMI
  • Our lowest dollar amount of annual family income was $20,847 and the highest was $43,023.
  • We served 34 families with three or less household members, 15 families with four to six household members, and one family with eight household members.
  • All Habitat families bought either a three- or four-bedroom, two-bath home, and our average sales price for these homes was $78,176.
  • Their average monthly mortgage payment was $539 for their 0-percent interest mortgage, including an escrow for property taxes and insurance.
  • Our homes are built with high quality and great care, including Class 4 impact resistant shingles, improved insulation, and other features that exceed city code requirements. Many of our increased building standards are seldom found in market-rate homes, so their inclusion in lower priced, “affordable” homes is noteworthy.

We are able to provide modest, but above-standard homes to these families at this affordable level because we sell our homes with no profit added and finance them with 0-percent interest mortgages. Moreover, we are able to keep our costs low thanks to community members’ support through volunteerism, donations, and discounted building materials and services; City and SAWS fee waivers; and federal pass-through funds we get from the City and Bexar County to fund the public infrastructure when needed.

I was surprised at the crowd at the City Council meeting last week, but was impressed that so many came to hear the full details on the final proposed policies. Both City staff and Council reviewed the policies in great detail and addressed most all of the criticism Council members said their constituents had brought up.

No policy is perfect, and there will always be room for improved communication, but the City’s use of the public feedback it gathered over the last several months is commendable and a huge leap in the right direction. The policy that passed will immediately help facilitate more affordable housing, and it will help Habitat continue – and possibly increase – our work, which provides a permanent affordable housing solution.

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