San Antonio LIHTC Expansion: Affordable Housing Update 2025

San Antonio City Council’s November 6 decision to increase Low-Income Housing Tax Credit (LIHTC) thresholds marks a pivotal moment in the city’s affordable housing strategy. This policy adjustment, focused primarily on District 1’s centrally-located neighborhoods, aims to accelerate construction of quality affordable homes in areas where rising costs have increasingly pushed working families and young professionals to the periphery.

As Bexar County median home prices continue climbing and rental rates follow suit, the expanded LIHTC structure provides developers with enhanced financing tools to deliver attainable housing in high-opportunity neighborhoods. For a city adding approximately 22,000 new residents annually, this proactive policy approach addresses both immediate housing shortages and long-term urban development goals.

Why This Matters for San Antonio

Housing affordability has emerged as one of San Antonio’s most pressing challenges. While the city remains more affordable than Austin or Dallas, rapid population growth and limited housing production in central neighborhoods have created significant pressure on families earning moderate incomes.

The LIHTC threshold expansion directly addresses this imbalance by making it financially feasible for developers to build affordable units in historically desirable—and historically expensive—central San Antonio neighborhoods. This policy shift represents more than incremental change; it signals San Antonio’s commitment to ensuring that teachers, service workers, young professionals, and military families can live near their workplaces and community amenities rather than facing lengthy commutes from far-flung suburbs.

District 1, encompassing many of San Antonio’s most historic and culturally vibrant neighborhoods, serves as the initial focus for this expanded approach. These centrally-located communities offer proximity to major employment centers, healthcare facilities, educational institutions, and public transportation—precisely the high-opportunity locations where affordable housing delivers maximum impact for residents and communities alike.

The threshold adjustment complements San Antonio’s ambitious Strategic Housing Implementation Plan (SHIP), which targets creation of 28,000 new affordable units by 2031 while fostering economically diverse neighborhoods that strengthen rather than segregate communities.

Understanding Low-Income Housing Tax Credits

The Low-Income Housing Tax Credit program, created by the Tax Reform Act of 1986, represents the federal government’s primary mechanism for encouraging private investment in affordable rental housing. The program works by providing tax credits to developers who build or substantially rehabilitate rental properties serving households earning below specified income thresholds.

Since its inception, LIHTC has financed approximately 4 million affordable apartments nationwide, making it the most successful affordable housing production program in American history. The program’s structure creates public-private partnerships where developers receive valuable tax credits in exchange for maintaining rent restrictions and income eligibility requirements for specified periods—typically 30 years or longer.

Local jurisdictions like San Antonio influence how LIHTC projects are prioritized and evaluated within their boundaries through Qualified Allocation Plans (QAPs). By adjusting income thresholds and scoring criteria, cities can direct LIHTC development toward specific neighborhoods, populations, or housing types that align with local policy goals.

San Antonio’s threshold increase essentially expands the range of projects that can competitively pursue these credits, particularly in higher-cost central neighborhoods where land values and construction costs previously made affordable housing development financially challenging even with tax credit support.

Community Overview: District 1 and Downtown San Antonio

District 1 encompasses some of San Antonio’s most historically significant and culturally rich neighborhoods, including Tobin Hill, Beacon Hill, Five Points, King William, Lavaca, and portions of downtown. These communities feature distinctive architecture, walkable street grids, proximity to the San Antonio River, and access to the city’s densest concentration of employment, entertainment, and cultural amenities.

The district has experienced substantial revitalization over the past two decades, with new restaurants, galleries, businesses, and residential developments transforming formerly neglected areas into vibrant urban neighborhoods. This renaissance has brought both opportunity and challenge—property values have appreciated significantly, pricing many long-time residents and moderate-income households out of neighborhoods their families called home for generations.

According to San Antonio’s Neighborhood & Housing Services Department, District 1 neighborhoods demonstrate strong fundamentals for mixed-income development: established infrastructure, transit access via VIA Metropolitan Transit routes, proximity to major employers including downtown office buildings and medical facilities, and cultural amenities that enhance quality of life.

The area also faces infrastructure needs—aging housing stock, incomplete sidewalk networks, and limited parking—that strategic affordable housing investment can help address through complementary public improvements and private development activity.

For military families stationed at Joint Base San Antonio, District 1 neighborhoods offer compelling alternatives to suburban areas near the bases. Downtown San Antonio sits approximately 15-20 minutes from Fort Sam Houston, making these central neighborhoods practical options for service members working at JBSA’s medical facilities or administrative headquarters while providing urban lifestyle amenities and cultural experiences that suburban communities typically lack.

Real Estate Impact on Buyers, Sellers, and Investors

For Homebuyers and Renters

The LIHTC threshold expansion translates directly into expanded housing choices for individuals and families earning between 30% and 80% of Area Median Income (AMI). In Bexar County, the 2025 AMI for a family of four is approximately $84,500, meaning LIHTC housing serves families earning roughly $25,000-$68,000 annually.

For renters specifically, new LIHTC developments provide quality housing options in neighborhoods previously financially inaccessible. These aren’t substandard housing—modern LIHTC properties typically feature contemporary finishes, energy-efficient systems, community amenities, and professional management comparable to market-rate apartment communities.

For prospective homebuyers saving for down payments while renting, LIHTC units in central neighborhoods offer the opportunity to live near downtown employment while accumulating savings and building credit toward eventual homeownership. The ability to avoid long commutes translates into time and transportation cost savings that can be redirected toward financial goals.

Increased affordable housing inventory also moderates rent growth across entire neighborhoods by expanding supply and providing competitive alternatives to market-rate properties. This benefits not only LIHTC tenants but all renters in surrounding areas.

For Sellers and Homeowners

Contrary to persistent misconceptions, research consistently demonstrates that well-designed affordable housing developments do not negatively impact surrounding property values. Studies by the Urban Institute and other housing research organizations show that LIHTC properties typically have neutral or modestly positive effects on nearby home values, particularly in urban neighborhoods where new development signals revitalization and increased investment.

The mechanism is straightforward: affordable housing brings additional residents who support local businesses, increases foot traffic that enhances neighborhood safety and vibrancy, and often catalyzes complementary infrastructure improvements like sidewalk upgrades, street lighting, and park enhancements. These improvements benefit all property owners in the vicinity.

For sellers in District 1 neighborhoods, the policy signals long-term city commitment to these areas through public investment and regulatory support. This commitment reduces uncertainty about neighborhood trajectories and supports stable or appreciating property values over time.

Homeowners benefit from increased neighborhood economic diversity, which creates more resilient communities less vulnerable to economic downturns and supports local retail and service businesses through expanded customer bases.

For Real Estate Investors

The LIHTC expansion creates multiple investment opportunities. Properties near planned affordable housing developments may benefit from increased neighborhood activity, improved infrastructure, and enhanced amenities funded through development fees and public investment accompanying new projects.

San Antonio’s demonstrated commitment to mixed-income development through SHIP and related policies reduces regulatory risk for investors. Cities that actively support diverse housing types through zoning reforms, expedited permitting, and financial incentives create more predictable development environments that support property values.

The city’s $12 million affordable housing initiative funding 368 rental homes demonstrates tangible financial commitment backing these policy goals. This combination of policy support and direct public investment signals serious municipal intent that savvy investors recognize as validation of long-term neighborhood viability.

Properties along key District 1 corridors—particularly Fredericksburg Road, Broadway, and San Pedro Avenue—stand to benefit from increased development activity and population density that supports commercial viability and enhances neighborhood walkability.

Expert Insight from Tami Price, REALTOR® & USAF Veteran

Affordable housing isn’t a market problem—it’s a market solution. When working families, young professionals, teachers, service workers, and military members can find quality housing within their budgets, entire communities benefit through enhanced economic stability, diverse neighborhood character, and sustainable growth patterns.

Having served in the U.S. Air Force and worked extensively with military families relocating to Joint Base San Antonio, I’ve seen firsthand how housing affordability affects retention, morale, and family well-being. Junior enlisted members and young military families particularly struggle when housing costs consume excessive portions of military pay. Expanding affordable options in central neighborhoods near JBSA facilities helps military families build financial security while serving our nation.

The LIHTC threshold expansion represents smart urban planning. Rather than concentrating affordable housing in isolated suburban locations far from jobs and services—a pattern that creates transportation burdens and limits economic opportunity—this policy prioritizes mixed-income development in connected neighborhoods where residents can access employment, education, healthcare, and community amenities efficiently.

In my 18+ years serving San Antonio’s real estate market and approximately 1,000 closed transactions, I’ve consistently observed that neighborhoods with diverse housing types and price points demonstrate greater resilience during market fluctuations and stronger long-term appreciation than economically homogeneous areas. District 1’s historic neighborhoods possess the urban bones—walkability, architectural character, location advantages—that make mixed-income development particularly successful.

For buyers and sellers, this policy creates both opportunity and stability. Buyers gain expanded options and clearer neighborhood trajectories supported by significant public investment. Sellers benefit from sustained municipal commitment to these neighborhoods through infrastructure improvements and regulatory support that protects property values. As a Broker Associate, I help clients understand these dynamics and position themselves strategically whether buying, selling, or investing in San Antonio’s evolving housing landscape.

Three Takeaways for San Antonio Residents

1. Policy Drives Opportunity: District 1’s raised LIHTC thresholds enable affordable housing construction in high-opportunity central neighborhoods previously too expensive for such development, expanding housing choices near employment, transit, and amenities.
2. SHIP Progress Continues: This threshold adjustment advances San Antonio’s Strategic Housing Implementation Plan goal of creating 28,000 affordable units by 2031, demonstrating sustained municipal commitment to addressing housing affordability systemically.
3. Neighborhood Stability Benefits Everyone: Increased mixed-income development and infrastructure investment in central corridors like Tobin Hill, Beacon Hill, and downtown areas benefits buyers, renters, homeowners, and investors through enhanced services, economic diversity, and long-term property value stability.

Strategic Considerations for Different Stakeholders

For First-Time Homebuyers

The expansion of affordable rental housing creates indirect benefits for aspiring homeowners. By providing quality rental options in desirable neighborhoods, LIHTC developments allow renters to live centrally while saving for down payments rather than stretching budgets to purchase homes in less desirable locations or commuting from distant suburbs.

Additionally, moderate rent growth resulting from expanded rental supply helps renters accumulate savings faster. The National Association of REALTORS® reports that renters who can reduce housing cost burdens below 30% of income save for down payments approximately 2-3 years faster than those with higher housing cost ratios.

For buyers ready to purchase, District 1 and nearby neighborhoods offer compelling value propositions—urban lifestyle amenities, shorter commutes, walkable environments, and historic character at prices generally below Austin or Dallas equivalents.

For Current Homeowners and Sellers

Homeowners in District 1 neighborhoods should view the LIHTC expansion as validation of long-term municipal investment commitment. Cities don’t prioritize affordable housing development in neighborhoods they expect to decline—quite the opposite. This policy signals that San Antonio sees these areas as fundamental to the city’s future and worth substantial public resources.

For sellers considering timing, stable or appreciating central neighborhood property values supported by expanding population and infrastructure investment create favorable market conditions. The combination of urban lifestyle appeal, limited land for new construction, and sustained demand from diverse buyer pools—young professionals, empty nesters, military families, investors—supports pricing power for well-maintained properties.

Sellers should work with knowledgeable REALTORS® who understand how housing policy affects buyer perceptions and can effectively communicate neighborhood trajectories and investment dynamics to prospective purchasers.

For Real Estate Investors

Investor opportunities span multiple strategies. Direct investment in properties near planned LIHTC developments positions investors to benefit from neighborhood improvements and increased activity. Rental properties in surrounding areas may experience sustained demand from households earning slightly above LIHTC eligibility thresholds—the “missing middle” demographic seeking urban neighborhoods but priced out of new market-rate developments.

San Antonio’s Comprehensive Plan identifies District 1 and inner-ring neighborhoods as growth priorities, indicating sustained city focus on infrastructure investment, transit improvements, and regulatory support favorable to property appreciation.

Investors should also monitor San Antonio Housing Trust development pipelines and track where concentrations of LIHTC projects are planned—multiple projects in proximity often catalyze broader neighborhood transformation that creates outsized appreciation potential for nearby market-rate properties.

Frequently Asked Questions

What is the Low-Income Housing Tax Credit (LIHTC)?

The LIHTC is a federal tax credit program created by the Tax Reform Act of 1986 that incentivizes private developers to produce affordable rental housing for low- to moderate-income families. It operates as a public-private partnership where developers receive valuable tax credits in exchange for maintaining rent restrictions and income eligibility requirements for specified periods, typically 30 years or longer. LIHTC has financed approximately 4 million affordable apartments nationwide since inception, making it America’s most successful affordable housing production program. San Antonio adjusts local income thresholds and scoring criteria to guide how these credits are allocated within city boundaries.

How will the LIHTC threshold expansion benefit San Antonio residents?

By raising thresholds, more development projects in higher-cost central neighborhoods become eligible for competitive tax credit awards. This means affordable units can be built in areas offering better access to jobs, quality schools, healthcare facilities, and public transportation—locations that were previously financially unfeasible for affordable housing development. Residents benefit from expanded housing choices in desirable, well-connected neighborhoods rather than being limited to isolated suburban locations. The policy particularly helps teachers, service workers, young professionals, and military families access housing near employment centers and community amenities.

Which neighborhoods will likely see new affordable housing development?

Tobin Hill, Beacon Hill, Five Points, King William, Lavaca, and downtown neighborhoods represent primary focus areas for expanded affordable housing development under the new thresholds. These District 1 neighborhoods offer proximity to employment centers, cultural amenities, and public transportation that make them ideal for mixed-income development. The San Antonio Housing Trust currently has multiple LIHTC projects in various development stages across these areas, with additional projects expected as developers respond to the improved financing environment created by threshold adjustments.

Does the LIHTC expansion affect both renters and potential homebuyers?

Primarily, LIHTC supports rental housing development, so direct benefits flow to renters. However, increased affordable rental housing contributes to broader housing market health that benefits prospective homebuyers. When renters can find quality affordable housing, it reduces pressure on entry-level home prices by decreasing forced homebuying from renters who would prefer to continue renting while saving larger down payments. Additionally, affordable housing development often spurs infrastructure improvements, enhanced services, and increased economic activity that benefit all neighborhood residents including homeowners. A robust rental market also provides flexibility for homeowners who may need temporary housing during transitions between properties.

How does this policy update align with San Antonio’s broader housing strategy?

The threshold expansion directly implements the Strategic Housing Implementation Plan (SHIP), adopted by San Antonio to comprehensively address the city’s affordable housing needs through 2031. SHIP employs multiple complementary strategies: zoning reforms that allow diverse housing types, financial incentives for affordable housing developers, dedication of public land for mixed-income projects, and partnerships with nonprofit and for-profit developers to create 28,000 affordable units citywide. The LIHTC threshold increase serves as a key implementation tool for achieving these goals by making central neighborhood affordable housing financially feasible through enhanced tax credit competitiveness.

Is now a good time to invest in central San Antonio real estate?

Market conditions suggest significant opportunity for strategic investment in District 1 and surrounding central neighborhoods. Multiple factors create favorable dynamics: population growth of approximately 22,000 new residents annually, infrastructure development supported by city policy and investment, supportive housing policies reducing regulatory risk, and limited developable land in central areas constraining supply. Properties in District 1 neighborhoods near planned affordable housing developments may particularly benefit from increased foot traffic, improved public amenities, and comprehensive neighborhood revitalization efforts. However, every investment decision should be based on individual financial circumstances, risk tolerance, investment timeline, and goals. Contact Tami Price for personalized market analysis and strategic investment guidance tailored to your specific situation.

Will affordable housing development negatively affect my property value?

Research consistently demonstrates that well-designed affordable housing developments do not harm surrounding property values. Studies by the Urban Institute, NYU Furman Center, and other housing research organizations show that LIHTC properties typically have neutral or modestly positive effects on nearby home values, particularly in urban neighborhoods where new development signals revitalization and increased investment. The mechanism is straightforward: affordable housing brings additional residents who support local businesses, increases activity that enhances neighborhood safety and vibrancy, and often catalyzes complementary infrastructure improvements like sidewalk upgrades, street lighting, and park enhancements benefiting all area properties. San Antonio’s emphasis on high-quality design standards for affordable housing ensures new developments contribute positively to neighborhood character.

How can military families benefit from this policy?

Military families stationed at Joint Base San Antonio, particularly junior enlisted members and young families, often struggle with housing affordability despite BAH allowances. The LIHTC expansion creates more affordable options in central neighborhoods approximately 15-20 minutes from Fort Sam Houston and other JBSA facilities. This provides alternatives to distant suburban areas, reducing commute times and transportation costs while offering urban amenities and cultural experiences. For military spouses seeking employment, central neighborhoods provide better job access and networking opportunities. As a USAF veteran specializing in military relocations, I help service members understand housing options and navigate San Antonio’s market efficiently, whether renting or purchasing.

The Bottom Line

San Antonio’s decision to expand LIHTC thresholds represents meaningful progress toward addressing affordable housing challenges through strategic policy action rather than merely rhetorical commitment. By making it financially feasible to build quality affordable housing in high-opportunity central neighborhoods, the city is creating more equitable access to urban advantages while strengthening the economic diversity that makes communities resilient and vibrant.

For buyers, sellers, and investors, understanding how housing policy shapes neighborhood trajectories and market dynamics enables more informed and strategic real estate decisions. The LIHTC expansion, combined with San Antonio’s broader SHIP implementation and demonstrated financial investment in affordable housing, signals sustained municipal commitment to central neighborhoods that reduces uncertainty and supports long-term property values.

Whether you’re searching for your first home, considering selling in a changing neighborhood, or evaluating investment opportunities in San Antonio’s evolving urban core, staying informed about policy developments like LIHTC threshold adjustments helps you identify opportunities and make decisions aligned with your goals and timelines.

Ready to Navigate San Antonio’s Evolving Housing Market?

Whether you’re a first-time homebuyer exploring options in revitalizing neighborhoods, a military family seeking housing near Joint Base San Antonio, a seller wondering how policy changes affect your property value, or an investor identifying strategic opportunities in central San Antonio, partnering with an experienced local expert makes all the difference.

Contact Tami Price, REALTOR® & USAF Veteran:

Phone: 210-620-6681
Website: www.tamiprice.com
Email: tami@tamiprice.com

Tami’s Specializations:

✅ Military relocations and PCS moves
✅ VA loan expertise and VA loan assumptions
✅ First-time homebuyers
✅ New construction homes
✅ Buyer and seller representation
✅ San Antonio, Schertz, Helotes, Cibolo, Converse, and Boerne

Thinking about buying or selling in Greater San Antonio? Let Tami’s military experience, broker-level expertise, and local market knowledge guide you to the right home at the right time.

About Tami Price, Realtor®

Tami Price is a Broker Associate with Real Broker, LLC, serving San Antonio, Schertz, Helotes, Cibolo, Converse, Boerne, and surrounding communities. As a USAF Veteran, she specializes in military relocations, VA loan assumptions, first-time homebuyers, home sellers and new construction homes.

Disclaimer

All information provided is for educational purposes and should not be considered financial or legal advice. Consult with qualified professionals for guidance specific to your situation. Statistics are current as of November 2025 and subject to change.