San Marcos City Council votes against supporting tax credit for housing project

The project failed for resolution with 2-4 votes, with Council Member Ed Mihalkanin and Mayor Jane Hughson voting to support. (Community Impact Newspaper)
The project failed for resolution with 2-4 votes, with Council Member Ed Mihalkanin and Mayor Jane Hughson voting to support. (Community Impact Newspaper)

The project failed for resolution with 2-4 votes, with Council Member Ed Mihalkanin and Mayor Jane Hughson voting to support. (Community Impact Newspaper)

A majority of San Marcos City Council members voted against supporting tax breaks for an income-restricted project known as Lantana on Bastrop Multifamily Housing Project during a City Council meeting on Dec. 3.

The developer of the Lantana project, Mission DG, was seeking a resolution of no objection from the city as it applied for a Low Income Housing Tax Credit through the Texas Department of Housing and Community Affairs, bringing into the discussion the potential for a 100% local tax exemption that was recently adopted into the city’s affordable housing policy.

The tax exemption has yet to be applied to any projects.

Council Member Melissa Derrick, who is also on the council’s affordable and workforce housing committee, voted against supporting the LIHTC for the Lantana project. Derrick voiced concern about the project’s limited number of units that would be priced at 30% area median income. In San Marcos, 30% AMI can range from $19,900 to $37,500, depending on the number of people per household, according to the city’s website.

“It’s a big decision to take a property off the tax roles because, as I mentioned before, when we already have billions and billions of dollars off the tax roles because we’re a university city and this one would be the first [local tax exempt project] we approve,” Derrick said. “I want to make sure that it is serving the community it's intended to serve and not people at the 70% AMI.”


Although the project offered apartment units for a variety of incomes, more than half of the 216 units proposed by the Lantana project would be intended for people earning 70% AMI, which would still “severely cost burden” many San Marcos residents, according to the San Marcos Housing Needs Assessment.

Derrick added that the definition of affordable housing is 60% AMI, and most of San Marcos residents have a smaller income. She said she was worried the project was only offering 22 units at 30% AMI.


Council Member Mark Rockeymoore, who also voted against the project, expressed his concern with the limited units this income-restricted project would give the community while still getting exempt from local taxes.

“As someone who has applied for one of these with a family, I understand the need for this in the city of San Marcos, and I also understand the reality that this is quite a small number of families or individuals that could live in this area,” Rockeymoore said.

The resolution of no objection to the project failed with a vote of 4-2, with Council Member Ed Mihalkanin and Mayor Jane Hughson voting in favor of the measure. Council Member Saul Gonzales was was not at the meeting.

“I believe that if we’re going to do this for the first time [100% exemption of local taxes], then we should do it right and we should make sure that we get everything that we want, to set a standard for everyone else who comes in,” Rockeymoore said. “We can’t change the status quo if we don’t do it different.”
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