San Marcos’ most recent comprehensive plan, a city document that guides city growth, calls for increased development on the city’s east side.

During the plan’s formation, “the public indicated a preference for some redevelopment in the urban core and for new development along east-side corridors and I-35,” the plan states.

Four projects on the city’s eastside could bring as many as 4,000 new single-family homes as well as multifamily housing and retail properties.

“That’s the direction we want to grow,” San Marcos Permit Manager Abby Gillfillan said. “It’s not over the [Edwards Aquifer] recharge zone. It’s not environmentally sensitive land.”

The Trace Community

In January, California-based real estate development firm HighPointe Communities will break ground on Trace, a community that, when fully built out, will include 1,000 single-family homes, parks and a site for a new San Marcos CISD elementary school as well as commercial, office and retail space.

City officials have said they are hopeful the development will spur more homeownership in San Marcos.

Council Member John Thomaides said he was concerned about the potential for investors to buy up a large number of houses and rent them out, thus threatening the owner-occupied character of the development.

Steve Metcalfe, an attorney for the developer, said it would be very difficult to enforce a restriction on investors buying properties in the neighborhood. An investor could come into the neighborhood and buy 10 different properties using 10 different names, he said.

Instead the development will rely on the single-family occupancy limits within the city’s zoning ordinance to help ensure the single-family residences are truly single-family. The multifamily portion of the development will have the same restrictions. The ordinance limits the number of unrelated people who can share a residence within certain zoning districts in the city.

HighPointe also plans to provide $2.5 million in cash and in-kind assistance to the city to build a fire station within the development. City Manager Jared Miller said the station’s proximity to homes within the neighborhood should lower some residents’ home insurance rates.

Steve Vliss, president and CEO of HighPointe Communities, said the developer is aiming to attract first-time homebuyers. The Austin-area real estate market has grown at a fast pace, Vliss said, but some potential buyers have been left behind in that growth.

“We felt that was an underserved need, and it was only going to get more so over the next several years,” Vliss said.

Home prices in Trace will likely start below $200,000, Vliss said.

Other east side developments

In addition to Trace, developments have been planned on more than 3,000 acres east of I-35 in the city limits and extraterritorial jurisdiction—an area just outside the city limits where the city has limited control.

Cotton Center, a 2,358-acre development planned to be built east of the San Marcos Regional Airport, is planned to include single-family homes as well as parks and commercial space.

The project is being developed by Walton TX LP, a Canada-based real estate firm that is also planning the mixed-use Gas Lamp District in southeast San Marcos near the outlet malls.

Gillfillan said Walton is working with the city on the Gas Lamp District project, although there are currently no plans for construction to begin in the near future.

Whisper, a development located just south of Yarrington Road off the I-35 access road, is planned to include 600 single-family homes in its first phase. The development will also include 241 acres of commercial and retail space.

Assistant Planning Director Kristy Stark said the city is working with Robert McDonald, the project developer, on plans for the 706-acre property.

“Hopefully within the next couple of months you’ll see that moving forward through [the planning and zoning commission] and through City Council,” Stark said.

McDonald estimated work on the development’s infrastructure would begin in early 2017.

Once roads are built within the development construction will begin on a 50,000-square-foot commercial building.

In early December, The LaSalle Municipal Utility District, another community planned to be built northeast of San Marcos, requested an extension of its development timeline. Under the extension request, work on the community would likely not begin for a few years.

Housing availability

The city of San Marcos has historically issued fewer single-family home construction permits per year than neighboring communities.

In 2014 and 2015 the city issued 278 and 238 single-family home permits, respectively. From Jan. 1-Nov. 30, the city issued 330 single-family home permits.

The city of Kyle issued 507 single-family home permits from Jan. 1-Nov. 30. The city of Buda issued 291 during the same period. Buda’s total does not include homes built in the Sunfield or Meadows of Shadow Creek neighborhoods, which are outside the city limits.

San Marcos officials said they are hopeful the new developments will help the city’s housing inventory keep pace with the explosive growth the region is experiencing.

“It’s going to hopefully change the balance of single-family and multifamily in San Marcos to owner-occupied versus rental and provide more opportunities for people to own a home,” Miller said. “That’s a difficult thing right now because the market is so sparse; there is a lot of competition out there.”