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Tax credits awarded to four affordable housing developments

September 2, 2018

A state agency has awarded low-income housing tax credits to help finance construction of four proposed apartment developments in San Antonio, which will require those properties to keep most rents below market rates for at least 35 years.

The local projects selected were the Museum Reach Lofts, a Midtown housing development by the nonprofit Alamo Community Group; Artisan at Ruiz, which Franklin Development Properties and the San Antonio Housing Authority plan to build west of downtown; Village at Roosevelt, an apartment development planned for the Mission Concepción area by Prospera Housing Community Services; and San Juan Mission Villas, a senior housing complex to be built on the South Side by Mears Development.

The Texas Department of Housing and Community Affairs Board approved those tax credits through a highly competitive program that requires applicants to outline the merits of their proposed housing developments.

The tax credits are sold to investors to raise equity for the projects before construction begins. That lowers the development costs and enables developers to charge lower rents for qualified residents earning limited incomes.

“The tax credits cover about 70 percent of your development costs, so you can see why they’re very attractive,” said Jennifer Gonzalez, executive director of Alamo Community Group.

Such financing also helps developers meet the need for affordable housing. While the rents remain below market rate, qualified tenants still get a high-quality, modern and safe place to live, said Ryan Wilson, Franklin Development’s senior vice president.

The city awarded resolutions of support for all four housing developments. This backing is critical “because it’s a very competitive process” to secure the tax credits awarded earlier this summer, said Verónica Soto, director of the city’s Neighborhood and Housing Services Department.

The top-ranked applicant in the San Antonio urban area this year was Museum Reach Lofts, which Alamo Community Group is seeking to build in Midtown at the corner of North St. Mary’s and West Jones. That project was awarded nearly $1.2 million in housing tax credits.

The nonprofit group will demolish a vacant warehouse and an office now standing on the sites it purchased to build Museum Reach, a five-story affordable housing complex containing 94 units — a mixture of studio, one-bedroom and two-bedroom apartments.

The vast majority of those apartments will be income- and rent-restricted and will be reserved for working renters earning 30, 50 or 60 percent of the area median income. Eight apartments will be offered at market rates.

The area median income in the San Antonio-New Braunfels metro area this year is $66,800, TDHCA documents show. To qualify for an apartment reserved for someone earning 30 percent of that amount, a tenant living alone couldn’t earn more than $14,040 annually, while a family of four could earn no more than $20,040 a year.

Alamo Community Group hopes the $17.5 million Museum Reach development will appeal to renters who work entry-level jobs in the professional and service industries in Midtown and downtown.

“This is an opportunity to live in an area that is currently out of reach for a lot of working individuals in San Antonio,” Gonzalez said, noting the site is close to the River Walk and the Pearl.

Construction is expected to begin early next year and will last about 18 months. The first apartments could be ready by next summer, Gonzalez said.

Artisan at Ruiz also was awarded $1.5 million in housing tax credits. Franklin Development and SAHA are seeking to build that project west of downtown on more than 4 acres of vacant land at 1507 Ruiz, where a Wolfe Nursery used to stand.

The $20 million development, which Wilson describes as “workforce housing,” will contain 102 units — a mixture of flats and townhomes ranging from two to three bedrooms.

All of those will be rented to tenants earning limited incomes. Plans call for 11 units to be rented to tenants earning 30 percent of the area median income, while another 41 units will be rented to people earning 50 percent of that median. The remaining 50 apartments will be reserved for tenants earning 60 percent of the area median income.

“We are targeting people who are working and have jobs, but simply can’t afford to go live in a unit that costs $1,500 a month or $1,800 or $2,000 in the downtown area,” Wilson said. “This is specifically for those who are struggling to find quality housing.”

Monthly rents for a two-bedroom will range from $358 to $787, while three bedrooms will range from $412 to $908, depending on tenants’ income level, Wilson said.

The neighborhood where Artisan at Ruiz will be built hasn’t seen any new, affordable multifamily housing for many years, Wilson noted.

Village at Roosevelt, a $12.2 million development by the nonprofit Prospera Housing Community Services, was awarded $975,000 in housing tax credits. Plans call for that housing to be built at 1507 Roosevelt in the Mission Concepción area on the South Side. It will contain 49 affordable apartments, while eight others will be offered at market rates. The five-story development will feature a mixture of one-, two- and three-bedroom apartments.

Among the affordable apartments, five will be rented to tenants earning 30 percent of the median income, while 20 will be rented to those earning 50 percent of that median and 24 will be reserved for renters earning 60 percent.

Construction is expected to take 12 to 14 months, with an anticipated completion date in early 2020.

San Juan Mission Villas, a senior housing complex that Mears Development has proposed for the South Side, secured a $1.14 million allocation of tax credits through the TDHCA. That $14.3 million development will offer independent senior living for tenants who are at least 55 years old. Plans call for the three-story building to be constructed on 4 acres at 9159 S. Presa.

Plans call for that development to contain 102 apartments — a mixture of one- and two-bedroom units. Nine units will be rented to tenants earning 30 percent of the area median income, while 34 will be reserved for those earning 50 percent of that median. Forty apartments will be rented to those earning 60 percent of the area median income. The remaining 19 apartments will be offered at market rates.

A house and a former flea market structure standing at the 4-acre site will be demolished to make way for the new construction, said Russ Michaels, a consultant assisting with the project.

Peggy O’Hare is a staff writer in the San Antonio and Bexar County area. Read her on our free site, mySA.com, and on our subscriber site, ExpressNews.com. | pohare@express-news.net | Twitter: @Peggy_OHare

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