Faced with the reality that thousands of San Marcos residents are severely cost-burdened, local leaders and community members are working together to try to solve one of the city’s biggest problems—its significant lack of affordable housing.

According to a housing needs assessment conducted by Root Policy Research and released by the city in March, as of 2017, 72% of residents involved in the San Marcos housing market are renters, and more than 65% of them are cost-burdened.

In other words, 9,700 renters in San Marcos have to use more than 30% of their income to cover their housing costs. Of those renters, nearly 6,000 are considered severely cost-burdened, meaning they have to use half or more of their income for housing expenses.

“The major problem that we have here in San Marcos is we don’t have the housing stock,” said San Marcos resident Roland Saucedo, who was appointed to the city’s workforce housing task force when it was established in 2018. “We don’t have the diversity in housing stock. We have gone to where we’re doing either these high-rise apartments that are geared for the college students, or we’re building housing developments, community developments that are out of the [community’s] price range.”

Lack of affordable housing is not only a problem for renters—27% of homeowners with a mortgage and 19% of homeowners without a mortgage are cost-burdened. This statistic, according to Root Policy Research, indicates that the maintenance of homes can be just as costly as a mortgage.

“Once I received the housing assessment, I was blown away,” Saucedo said. “I couldn’t believe it. When I saw those numbers I thought, ‘This is so sad.’”

The assessment shows that much of the city’s housing problem also comes from the fact that San Marcos has experienced sharp home price increases since 2013, while the rise in the city’s median income has not kept pace.

According to the latest U.S. Census Bureau data, 59,935 people lived in San Marcos as of 2017—a 24.1% increase since 2013. The median income in San Marcos is $34,748; and 37.5% of all San Marcos residents make less than $25,000 a year. Altogether, 65.9% of the entire San Marcos population makes less than $50,000 a year.

Adriana Cruz, president of the Greater San Marcos Partnership, said the economic development organization recognizes how much the local economy can impact the community’s quality of life.

“We are looking for high-quality jobs with good wages for our citizens,” Cruz said. “We really believe that good quality of life comes with a good-quality job and having the funds available to be able to afford your home and your rent and take care of your family, so that’s absolutely one of the things that we look at.”

The Student Effect

Census data indicates that 21,389 of Texas State University’s nearly 39,000 students live in San Marcos, contributing significantly to the city’s renter population.

An estimated 2,760 of the 5,950 severely cost-burdened renters in San Marcos are students—meaning approximately 3,190 of these renters are non-students, according to the housing assessment.

In recent years, San Marcos has seen steep increases in the development of non-university,  purpose-built student housing, which caters and markets to students. However, when examining all of the city’s building permits between 2007 and 2018, it is evident that production of housing not necessarily geared toward students did not increase enough to accommodate non-student population growth.

“One of the huge problems that we have is since 2012, the majority of any and all development has been geared for purpose-built student housing,” Saucedo said. “And with that, it has  attracted a lot of investment developers that are purchasing single-family homes, properties,  vacant lots and stuff like that, and creating more [student housing] because they’re finding it to be more beneficial to rent by the room than to rent out a unit.”

Private sector student housing has been the city’s primary form of multifamily development over the past decade, according to the assessment. In fact, commercial student housing accounted for 62% of all multifamily building permits and 42% of all residential permits from 2007-18.

Saucedo noted that the saturation of rent-by-the-bedroom, commercial student housing affects students as well because, on average, housing geared toward students has higher rents than conventional developments. According to data from Apartment Trends by Austin Investor Interests, as cited by the assessment, units that cater to students have an average rent of $1,827 per unit while non-student apartments have an average rent of $1,043.

“When you have all of these apartment buildings coming up, and the rents are anywhere from $900-$1,200 and even higher—when you’re actually playing with the numbers, and get technical and look at our median income level—these are not affordable options for our residents,” Saucedo said.

Aftermath of 2015 Floods

San Marcos was ravaged by severe, historic flooding not once, but twice in 2015. Both floods caused significant damage to the little affordable housing inventory the city has.

Homes near the Blanco and San Marcos rivers experienced the most flood damage—with the most acute damage happening in the area of the Blanco Gardens neighborhood, where a majority of the households earn well below 50% of the city’s median income, according to the assessment.

City Council Member Saul Gonzales, who is a member of the city’s workforce housing task force that was established in 2018, is intimately aware of just how hard the floods hit San Marcos families who were already struggling to afford their homes. His mother was flooded out of her home after both 2015 floods.

The floods—which damaged 1,558 homes, costing tens of millions of dollars—led the U.S. Department of Housing and Urban Development to give the city $25 million in disaster relief funds, according to the assessment. However, Gonzales said the neighborhoods are still struggling in the aftermath of the floods.

“And now a lot of those houses aren’t being fixed,” Gonzales said. “There’s still people that still aren’t moving back in. It’s tough. Some of those guys spent their life savings for their homes, and they’re still not up to par.”

Affordable Housing as a Priority

San Marcos City Council, at the start of 2019, made workforce housing one of its top priorities for the second year in a row.

This prioritization by local leaders led to the 2018 formation of the San Marcos Workforce Housing Task Force, which is made up of community members, local stakeholders and three City Council members.

Over the past year, the task force has been coming up with potential solutions that could help remedy the lack of affordable housing in San Marcos. The task force is aiming to have an action plan drafted by June, and then after a public review and feedback period, a final draft will be presented in September to City Council with recommendations on a path forward.

“What we have been able to come up with is astonishing, and I can’t wait for it to be revealed,” Saucedo, who clarified he does not speak on behalf of the entire task force, said. “Our community is so diverse, and our population has increased so much. And it’s going to continue to grow. So we have to be able to have the housing stock that meets the needs of the citizens of our community.”

Although the task force’s action plan is not final, Saucedo said members have been considering a broad array of potential solutions.

Saucedo said the city could potentially expand and protect its affordable housing stock by participating in a program in which houses repossessed by local government could be converted into affordable housing instead of being auctioned off to outside bidders.

The city could also benefit, Saucedo said, by incentivizing developers to build affordable housing in San Marcos.

Saucedo said at a recent housing equity conference in Austin he asked five major developers who have built multiple affordable housing developments in surrounding cities why they have not done projects in San Marcos. Their answer: the stringency of the building codes in San Marcos.

“So that’s another thing the housing task force is talking about,” Saucedo said. “Because if that’s one of the things that’s keeping us from gaining our affordable housing stock, we need to be able to offer incentives the way we do for the large development companies; we need to be able to offer incentives and work with them through variances.”

Overall, Saucedo said he is optimistic that San Marcos can solve its affordable housing problem if the city acts on the task force’s plan once it is revealed later this year.

“We’ve come up with a lot of great strategies and initiatives,” he said. “As long as the city moves on [the plan] and takes the lead on this issue, then I think we’re off to a good start.”