San Antonio City Council TIRZ Policy Review Meeting - September 3, 2025

The San Antonio City Council held a meeting on September 3, 2025, to review the city's Tax Increment Reinvestment Zone (TIRZ) policies. The presentation, led by Chief Financial Officer Troy Allen and Director Veronica Garcia, covered both city-initiated and developer-initiated TIRZ, their financial mechanisms, current districts, and contributions to affordable housing, infrastructure, and economic development. Councilmembers discussed TIRZ board representation, affordability requirements, displacement risks, and the need to align TIRZ investments with broader city priorities.

Discussion Items

Overview of TIRZ Policy

• Troy Allen explained that TIRZ are authorized under Chapter 311 of the Texas Tax Code, allowing cities to capture incremental property tax revenue within a designated zone to reinvest in public improvements, affordable housing, and economic development. City-initiated TIRZ are established by council action, while developer-initiated TIRZ involve a private petition and reimbursement for upfront infrastructure costs.
• For fiscal year 2025, total TIRZ contributions are approximately $45 million, with 60% going to the general fund and 14% to the land fund. Of that, $37 million is dedicated to city-initiated TIRZ and $8 million to developer-initiated TIRZ. These figures represent about 5% of the city's total general fund revenue.

City-Initiated TIRZ Districts

• Allen presented nine city-initiated TIRZ districts: Houston Street (established 1999, extended to 2022), Inner City (ends 2035), Brooks City Base (ends 2039), Verano (ends 2039), Mission Drive (ends 2039), Midtown (ends 2041), West Side (ends 2060), Northeast Corridor (ends 2034), and Hemisphere (ends 2037). Each district's financial status and major projects were detailed.
• Key projects include: Houston Street TIRZ supporting Mission Ballpark; Inner City TIRZ funding Austin Community Center, Maverick Plaza, La Villita; Brooks City Base TIRZ funneling funds to Brooks Development Authority; Midtown TIRZ supporting San Antonio Zoo, Botanical Gardens, Pearl infrastructure, Brackenridge Park; West Side TIRZ funding CC Expansion, YWCA Learning Center, Market Square; Northeast Corridor TIRZ supporting Morgan's Wonderland and accessible housing.
• Financial balances were provided for each TIRZ. For example, Houston Street TIRZ had an ending balance of $6.9 million; Inner City TIRZ showed growth; Midtown TIRZ had a balance of $4 million after $18 million in expenses.

Developer-Initiated TIRZ

• Veronica Garcia explained that developer-initiated TIRZ allow private entities to propose zones in underutilized areas. The developer funds infrastructure upfront and is reimbursed from the incremental tax revenue over time. Eleven such districts were presented, mostly in Districts 2, 3, and 4.
• Projects include: Mission del Lago (2,500 single-family, 520 multi-family units), Lackland Hills (171 single-family), North East Crossing (1,364 single-family, 250 multi-family), Hunter's Pond (425 mixed units), Day Meadows (~400 homes with affordability), Neighbors TIRZ (637 single-family, 340 multi-family), Somerset Grove (603 single-family), Valisol (650 single-family), Lone Oak (975 single-family), and Rosillo Creek (5,239 single-family, 67 acres multi-family, plus 50 acres donated to San Antonio Housing Trust).
• Reimbursement periods vary from 2028 to 2054, and participation percentages differ (city typically 60-100% of tax increment).

Council Discussion and Concerns

• Councilmember Munguía praised the TIRZ policy for enabling development in areas lacking infrastructure, especially noting Verano TIRZ's role in creating housing near Palo Alto College and Texas A&M-San Antonio. He asked about inflation adjustments for reimbursements; staff noted that newer TIRZ may account for inflation but older ones do not.
• Councilmember Villagran expressed strong support for TIRZ, particularly developer-initiated ones, as they have transformed underserved areas in District 3 (e.g., Brooks, Verano, Mission Drive). He highlighted challenges with coordination among multiple stakeholders in Mission Drive TIRZ.
• Councilmember Corr emphasized the value of TIRZ for community amenities like the zoo and botanical gardens, and advocated for using TIRZ funds to support affordable housing and educational access. She suggested creating pilot programs for home rehabilitation in older neighborhoods.
• Councilmember Castillo raised concerns about lack of affordable housing in some city-initiated TIRZ (e.g., Houston Street, Midtown, Hemisphere). She noted that only four of thirty projects include affordable units, and called for better representation of councilmembers on TIRZ boards. She also questioned whether TIRZ funds are being used equitably, especially in areas with high poverty.
• Councilmember White defended the TIRZ policy as a long-term investment that has yielded significant growth, and supported continuing current practices.
• Councilmember Castillo-Indianos (multiple interventions) argued that TIRZ are essential for addressing historical disinvestment in the East Side and South Side, and that removing TIRZ would slow progress on health, education, and housing equity. He urged the council to use TIRZ strategically to benefit vulnerable residents.
• Councilmember González asked about ensuring affordability in developer-initiated TIRZ, and was told that developers identify infrastructure costs and the city caps reimbursement.
• Councilmember Korr noted that TIRZ funds come from incentivized development, so balancing market-rate and affordable housing is necessary. She suggested using funds from well-performing TIRZ to cross-subsidize affordable housing elsewhere.
• Mayor (presiding) clarified that councilmembers can be appointed to TIRZ boards through an ordinance change, and that ultimate approval rests with the full council. He noted that a strategic discussion on TIRZ priorities had not occurred since fall 2021, and that such a conversation would be helpful during upcoming budget talks.

Key Outcomes

• No formal votes were taken; the meeting served as an informational review and policy discussion.
• Staff was directed to provide additional documentation on the number of affordable housing units produced through TIRZ (currently 700 units within city TIRZ, plus 240 home rehabilitation units) and the percentage of total units that are affordable.
• Councilmembers requested a breakdown of general fund contributions from TIRZ terminations (four TIRZ closed in the last three years, contributing approximately $1 million total).
• The council expressed interest in exploring ways to accelerate return of funds from well-performing TIRZ to the general fund, and in holding a strategic workshop on TIRZ priorities, particularly regarding affordable housing, displacement mitigation, and board representation.
• Staff agreed to bring forward a revised plan for Midtown TIRZ and to analyze potential changes to TIRZ policies, including the possibility of requiring affordable housing components or contributions to a housing trust fund from all TIRZ projects.
• The meeting was adjourned at 3:47 PM.