The city of San Marcos hosted a workshop Aug. 29 focused on discussing affordable housing issues in the city. Officials used the opportunity to provide an update on Code SMTX, the rewrite of the city’s land development code, which guides various aspects of commercial and residential development. A draft of the code is available for public comment. The workshop also included a panel of economic development and housing experts discussing issues related to affordable housing in the city. According to the presentation:

1. Investor-owned properties are on the rise in San Marcos.

In 2011, 72.1 percent of the city’s housing stock was owned by investors. By 2014, that number had increased to 72.8 percent. The prevalence of investor-owned properties may be helping to drive increases in the average price of single-family homes throughout the city because if a property owner can charge $800-$900 rent per bedroom in the home, the prospect of keeping the property as an investment—rather than living in it or selling it—becomes more attractive.

2. Rental rates in the city of San Marcos are higher than the state average.

Since 2011, the average contract rental rate per unit in San Marcos has increased from $644 per month to $919 per month. That is slightly higher than the state average, which is $870 per month.

3. The city’s median household income is about half the state average.

The median household income in the city of San Marcos was $27,261 in 2014. That is a little more than half of the state average, which was $52,576. The city of San Marcos’ median household income is slightly deflated because it includes Texas State University students who listed San Marcos as their home address on the American Communities Survey from the U.S. Census Bureau.

4. Potential solutions to the affordability issue include deed restrictions requiring that the owner of a home live on the property, but enforcement of any rules could be a challenge.

Jim Adams, an architect and designer who has been involved with the redevelopment of the former Mueller Airport in Austin into a commercial and residential hub, said that development has used deed restrictions—a condition written into a property’s deed—to curb investors from buying up properties and leasing them. “I’m not a lawyer and I don’t have the solution, but it would seem to me that if there was a way of deed-restricting properties so that the owner has to occupy the unit, you might be able to reduce the number of investors buying up units just to rent out to students,” Adam said. “That’s something we’ve done at Mueller because we want to make sure there is owner-occupation for at least a certain period of time.” Council Member Scott Gregson said the city has many options it could consider. “There are ways to get around [investor-owned properties],” Gregson said. “But what it does is it creates a nightmare to enforce.” For more on affordability issues in Hays County, see our July cover story.