The Downtown Area Regional Center is experiencing a renaissance of growth supported by the City’s efforts to revitalize the urban core with the City’s “Decade of Downtown”. Downtown is evolving into a vibrant mixed-use area with a combination of employment, services, and housing. Traditionally the entertainment and cultural center of the city, Downtown is increasingly becoming a more sought after location for residents attracted to the live, work, and play environment. Downtown revitalization efforts by the City and its partners have focused on increasing both the number of housing units, and the attractiveness of living Downtown. The decade-long effort to revitalize the Downtown core has begun to bear fruit, with increased housing development and the recognition that portions of the center city have become some of the most desirable places to live. Although housing will continue to be a central component of on-going Downtown development efforts, the overall Downtown housing strategy needs to evolve and focus on the challenges of the next ten years.
The population of the Downtown Area Regional Center is 25,400. The area had an increase of 265 households between 2000 and 2010, however, the population actually slightly decreased. Since 2010, however, the Downtown area population has grown by 1.6% per year, a rate faster than the City’s overall growth. Households have also continued growing at a faster rate than population since 2010. A housing growth goal was developed within the SA2020 community vision effort. The goal was to create 7,500 new housing units in the Downtown area by 2020. The Downtown Area Regional Center has increased in housing units by over 3,100 units from 2010 to 2017, with approximately 1,400 units now under-construction, and another 3,000 units within proposed projects. Downtown is likely to attract the desired 7,500 units at or just after 2020. (Note: SA2020 estimated just over 7,000 new units are built, under-construction, or proposed in their 2018 Impact Report).
Characteristics of households in the Downtown Area Regional Center vary considerably from the City overall. Downtown households are smaller on average and the majority of households are non-family households. The age of residents varies greatly as the area has a population that is older than the average of region overall, but also has a greater concentration of younger residents (age 25 to 34). Average household incomes are lower than the City and County averages. There are also significant differences in housing tenure between the Downtown Area and the region overall. Only 32% of units in Downtown are owner-occupied, while 68% are renter-occupied.
Average home values in the Downtown Area are lower than the County average, however new product being built in the area has much higher costs than the rest of the region. New infill, for-sale housing in Downtown is listing for an average of $500,000, which is well higher than the County average. Rental housing costs in Downtown are also higher than the County average. Overall, the average rent Downtown is 30% higher than the County average. Rental rates for new development (built in 2010 or later) are also higher and have continued increasing as demand for housing in the area rises.
Housing affordability and accessibility were major issues identified in the SA Tomorrow Comprehensive Plan. Each regional center’s access and affordability were assessed to identify challenges and opportunities. Housing affordability is often measured in terms of “cost burden,” or the share of a household’s income paid towards housing costs. In general, if a household spends over 30% of income on housing it is considered to be “cost burdened.” The percent of renter households’ cost-burdened in the Downtown Area Regional Center is 41%, which is less than the Bexar County average. Overall, 26% of homeowners in the area are cost burdened, a figure slightly higher than the Bexar County average.
However, changes in property values and rental rates indicate a growing increase in the cost of housing that may not be evident in the US Census data. Assessed property values for residential properties increased by 20% annually from 2010 to 2017 (according to Bexar County Assessor data), which is significantly higher than the increases for all property types of 7% annually. Average rental rates are rising quickly as well. Since 2000, the average rental rate per month has increased by a total of $580, which is a 75% greater increase than the average County change during this period. These increases are pricing some existing renters out of the Downtown Area and into surrounding neighborhoods that are more affordable. As well, over half of the homeowners in Downtown do not have mortgages, which indicates that existing housing costs for these owners are likely affordable. However, these homeowners may be significantly impacted by large increases in property values and resulting increases in property taxes, especially older homeowners.
Housing issues and strategies were primary topics of discussion at Community Meeting #2 and Planning Team Meeting #5, and were prominent topics of community and stakeholder input throughout the planning process. Community Meeting and Planning Team Meeting Summaries are available in the documents library of the Downtown Area Regional Center Plan webpage.
Housing Challenges in the Downtown Regional Center
Support for housing was one of the four focus areas within Centro’s 2011 Strategic Framework Plan which identified the need to increase the amount of people living in Downtown as an essential element for increasing activity in the urban core and to spur revitalization. Barriers to housing in Downtown at the time included a lack of attractive housing options, barriers to financial feasibility for new housing development due the cost of development and regulatory hurdles, and the lack of a vibrant public realm and the amenities and services needed to support residents living in the urban core.
Many successful efforts were taken to increase housing development in the urban core and has the City on its way to achieving its goal of 7,500 new households in Downtown by 2020. The strategies that were utilized to support housing included: focusing housing growth in the most attractive areas at the time including River North/Midtown, Downtown Core, Cesar Chavez/Hemisfair Corridor, and Near River South; investing in and creating a vibrant public realm; using public lands to catalyze new development; establishing an as-of-right housing incentive program; attracting and investing in services and amenities to attract residents; and supporting catalytic housing projects through a center city housing fund. The City’s efforts have been largely successful as those focus areas have captured significant housing growth. This housing growth has been supported by the City’s Center City Housing Incentive Policy (CCHIP), and both the public realm and resident-serving amenities in Downtown have been enhanced. These efforts have been stewarded by the City’s Center City Development Office (CCDO) and Centro. Both of these entities and the support they are provided were envisioned within the Strategic Framework Plan.
As Downtown moves into the next decade, the focus of efforts is beginning to shift, but some housing challenges still exist. There are three main challenges in the Downtown Area Regional Center related to housing:
Maintaining opportunity for all household types and incomes to live in Downtown
The feasibility of housing development has become less of an issue as the housing market in Downtown has grown steadily and projects are achieving the market’s highest rents in the most attractive areas. However, infill and redevelopment continues to be costly with unpredictable conditions demanding higher rents to cover costs. The affordability of housing for existing middle and lower income residents in the urban core has become challenging. New residents of Downtown are largely able to afford housing costs, as evidenced by the cost burden statistics, but lower income residents are at risk of having to leave Downtown to access more affordable housing. As demand continues to grow, there is a need to maintain and create affordable housing options along with the market-rate development in order to address impacts of rising property values and rental rates, particularly for lower-income renters. As the appeal of urban living grows, the need for housing options that are attainable and attractive to homeowners and families will be in demand.
Maintaining opportunity for all housing unit types, new and old
Downtown has a diversity of neighborhoods, diversity in housing and development density, and diversity of forms. The older single-family housing stock gives the area amazing character but is often difficult to maintain due to costs of reinvestment and development pressures. Preserving the historic character and reinvesting in older housing stock is needed to maintain character. New development must also work within the character of the historic neighborhoods. However, developing new housing in these infill settings can be difficult due to some regulatory barriers within existing zoning. The City’s recently revised “IDZ” Infill Development Zone zoning is a helpful tool to facilitate successful infill development, but the rezoning process is a risk that may deter developers. The Strategic Framework Plan called for a form-based zoning approach to address design challenges and ease the barriers to housing development. But, the form-based approach has not worked as initially envisioned (and despite several revisions), as developments in the River North area with the form-based zoning have had challenges meeting a number of the form-based standards.
Capacity for housing development
As the Downtown Area continues to evolve and redevelop, the capacity to support future growth has become a major consideration. The success of revitalization efforts has generated a substantial growth trend, especially for housing. The greater Downtown Area has been capturing over 600 new housing units per year since 2010. Based on an analysis to identify opportunity sites for new development (vacant, public, and potential redevelopment sites), there is an estimated capacity of approximately 300 acres of privately owned sites for new development. Housing growth forecasts for the area range from 18,500 to 28,700 new units from 2010 to 2040, which would require new development to be built at a density of nearly 100 units per acre, making it difficult to realistically accommodate the forecast housing and employment growth. The Downtown Area also has a significant amount of publically owned parcels, some of which are underutilized. The City and its partners have been successful at using public lands to catalyze growth in the Downtown Area with the Hemisfair project and other efforts and there is continued need to utilize public lands to enable growth in the Downtown Area Regional Center. If potentially underutilized publicly owned parcels are included in the analysis, an additional 150 acres of capacity is generated. With these additional public parcels, average housing development would need to be at 40 to 60 units per acre, which is achievable and less units per acre than many of newer housing projects of recent years. The public lands also become important in supporting other efforts related to housing, including increased affordable housing in Downtown, but also supporting economic growth. A greater utilization of downtown development sites is needed to continue the area’s momentum and support for housing.
Housing recommendations were developed based on the Downtown Regional Center Plan’s vision and goals and to address the challenges identified during the planning process. Specific strategies to implement these recommendations can be found in the Implementation section of the Plan.
Recommendation #1:Continue to use under-utilized public lands to support housing growth, provide for affordable housing options, and catalyze new development in focus areas and mixed-use corridors.
Recommendation #2:Support housing growth in the Downtown Area by creating a diversity of housing options in mixed-use areas and accommodating additional housing in neighborhoods and transition areas through context sensitive design and small scale infill.
Recommendation #3:Support San Antonio’s Housing Policy Framework by developing Downtown specific goals for providing a greater diversity of housing and increasing the availability of affordable housing units.
Housing affordability has been recognized as an existing and increasing challenge for San Antonio for a number of years. Most recently, both the SA Tomorrow Comprehensive Plan and the Mayor’s Housing Policy Task Force Housing Policy Framework laid out goals and recommendations for addressing this challenge. Development in and around Downtown has been part of the discussion around the need for affordable housing.
The Downtown Area is one part of San Antonio, and its housing issues and opportunities are inextricably linked to the rest of the City and the region. Ensuring diverse and affordable housing options exist amidst all of the Downtown Area's opportunities cannot be accomplished with a focus on the Downtown Area alone. Many programs, incentives, and funding sources for maintaining housing affordability should be established in consideration of the whole city. San Antonio’s Housing Policy Framework has identified actions, policy priorities, and implementation strategies to do this. Similarly, every Regional Center and Community Plan Area in San Antonio has a role to play in achieving a diverse and affordable housing future for the City of San Antonio. The Downtown Area's communities have indicated through the planning process that diversity is valued, that Downtown and its adjacent neighborhoods are places where existing residents should be able to stay, and where new diverse housing for people to live in is welcome. As with every other part of San Antonio, the Downtown Area's future success is tied, in part, to implementing San Antonio’s Housing Policy Framework.
The City’s CCHIP program has been modified to a tiered system to allow a base level of incentive and increased incentives for the inclusion of affordable housing for households earning up to 80% and up to 60% of AMI. However, the CCHIP is just one tool and increasing the availability of housing units affordable to households earning less than 80 percent of AMI will rely on strategies including the use of innovative housing finance tools, utilization of public sites for development, preservation of existing affordable housing units, and partnerships to incorporate mixed income units in focus areas and mixed use corridors.