Land use and zoning play an exceptionally large role in city design, dictating where people can live, where shops and restaurants can operate, and where businesses can be located. New York City adopted the first zoning code in 1916 to deal with city nuisances that caused illness and disease. Over time, cities began to use zoning for more exclusionary purposes, often to prevent ethnic and racial minorities from moving into mostly white neighborhoods. Nowadays, zoning is typically wielded by those seeking to “protect the character” of their neighborhoods.
Many cities are still stuck with zoning codes and practices from over 50 years ago. These outdated zoning codes have led many U.S. cities experiencing significant price increases over the last few decades as restrictive zoning codes have made construction more expensive, which has led to more expensive single-family homes being built than multi-family units.
Texas (where I live) recently became only the second state in the country with over 30 million residents. San Antonio, Austin, Houston, and the Dallas-Forth Worth (DFW) area have seen major population booms. More people moving to these major cities has resulted in extreme pressure on each city’s housing market, leading to increasing rents, higher median home values, and gentrification and displacement.
It’s well-known and established that less restrictive zoning is beneficial for containing rising rents in cities because more and different kinds of housing can be built. In order to address the rapid influx of people moving to Texas’ major cities, an understanding of their zoning ordinances can help determine how ready each city is to handle more people and more demand for housing.
In part 1 of this zoning project, I’ll be taking a look at how San Antonio is zoned, some information on what kinds of building permits are being requested and issued, and some housing data from the U.S. Census over the last two decades.
San Antonio, Texas
The Alamo City is the 7th largest city in the country and has seen one of the largest population increases in Texas over the last 20 years. It’s a geographically expansive city and continues to sprawl outwards, extending past its two freeway loops – 410 & 1604.
From San Antonio’s Open Data Portal I downloaded 3 data sets – permits submitted to San Antonio’s Development Services Division (DSD), permits approved by DSD, and its zoning data. In order to get anything built or modified, contractors and builders must submit permits to DSD, who have the final say on what gets built and what doesn’t. The types of buildings that are allowed on a plot of land are determined by what the zoning code allows to be built there,
San Antonio’s zoning data can be found here and shows how every plot of land in the city is zoned, for a total of 699,172 records. Their ArcGIS page allows you to hover over every parcel of land and see how it’s been zoned and when that zoning went into effect. Below is a piece of property zoned as a Multi-Family District as of January 24, 2007 on San Antonio’s West Side.
Removing areas zoned as “Outside City Limits” cuts the zoning data down to 459,833 records and 35 different base descriptions, including a base description that doesn’t have any label. I’m not sure why “Outside City Limits” would be included in a zoning dataset for San Antonio, or why 18,962 records don’t have a base description. Looking at the remaining zoning descriptors, it turns out that just over 76% of San Antonio is zoned for single-family housing, greatly outpacing Residential Mixed District, Multi-Family District, a blank descriptor, and Commercial District zoning.
If we filter down to only residential type zoning in San Antonio, the picture gets even bleaker. Over 88% of all residential zoning within the city is allocated to single-family housing, while just over 10% (10.79% to be exact) of the city is zoned for mixed districts (The Pearl) or multi-family units (apartments).
Building permit data from San Antonio’s Open Data Portal for 2020-2023 shows that new residential building permits are being issued by DSD. In the 3-year period for which data was available 12,143 “Res New Building Permits” and 455 Accessory Dwelling Units (ADUs) were issued. Unfortunately, the San Antonio permit data doesn’t show exactly the type of residential building that’s under construction so I grabbed some data from Texas A&M’s Real Estate Research Center for the San Antonio-New Braunfels Metropolitan Statistical Area (MSA). The numbers of permits is likely slightly inflated due to the inclusion of New Braunfels, which is also growing rapidly, but the general trend of what’s being built in the MSA can be indicative of what’s happening within San Antonio.
The graph below shows the number of permits issued for constructing housing units in the San Antonio-New Braunfels MSA. 1 unit permits and 5+ unit permits track consistently with each other over the last two decades but the number of 1 unit permits issued far outstrips 2-4 unit permits and 5+ permits. Permits for 2-4 unit buildings have remained a very low constant over this period relative to the permits issued for 1 unit and 5+ unit developments. Permits for 5+ unit construction have over the last 8-10 years. Anecdotally, I suspect that the rise of 5+unit construction permits has resulted in more clustered, enclosed apartment complexes with 2 parking spaces per unit being built off San Antonio’s freeway system in relatively undeveloped land.
It makes sense to see that the number of 1 unit building permits outstrips other types since more than 88% of San Antonio’s residential zones are for single-family housing. Without a drastic overhaul of the city’s zoning code, developers looking to built multi-unit complexes will have to find parts of the city that are 1) already not developed for single-family homes or 2) submit variance requests in denser part of the city and start the slog of navigating the tricky maze of neighborhood groups rallying against multi-unit buildings.
Rent & Home Values in San Antonio
So it certainly looks like overall home building has been steadily rising in the San Antonio area but what has that done to home values and rent prices?
The Zillow Observed Rent Index (ZORI) is a smoothed measure of the observed market rate rent for a metro area. You can read about their methodology here, but essentially Zillow assigns different weights to properties depending on how often they appear on the rental market. This helps stabilize their index and avoid significant fluctuations in median and average rental prices for a given area.
From 2015-2022, San Antonio’s ZORI has increased 32% across all available rental properties. During the same time period, San Antonio has seen an overall 95% increase in the amount of building permits issued, with 1 unit permits issued seeing a 73% increase. What’s also interesting to see is that the rate at which the rent index for San Antonio increased post-2020 was much faster than the years before the pandemic.
The ZORI data doesn’t go back as far as I would like, but the ACS 1-Year estimates have median home value estimates going back quite a ways. To see a longer-term trend, I grabbed the median home values for Bexar County (where San Antonio is located) from 2005-2019. The same upward trend can be observed here in median home values, with a slight dip from 2008-2009 and 2010-2011.
What’s interesting to me is that San Antonio is experiencing both rent and median home value increases. At the same time, residential building permits have continued to be issued, albeit many of those are for 1-unit or single-family residences. Since much of San Antonio is zoned exclusively as single-family zoning, that’s what will be built. Developers or landlords can put in variance requests to change the zoning, but the process can be too long to take advantage of the demand for housing. Additionally, if land is expensive to purchase and develop, single-family properties are going to bring in more money for developers.
Talking about home values and rent prices will always be a touchy subject. Long-time homeowners generally don’t want to see their home value depressed because of an increase supply of housing in their neighborhoods, even if they are ideologically friendly to the idea of more affordable housing being a good thing. Renters typically don’t want their rent to increase drastically every year and move somewhere farther away from where they work, shop, and eat to find more affordable options.
Here in San Antonio, at least, single-family zoning will continue to dominate the home-building landscape. What’s needed is a comprehensive zoning review that starts to reduce the amount of single-family zoned properties in the city. Allowing accessory dwelling units is a good start, but denser multi-family units need to be built closer to the downtown core. It’s clear that developments containing 5 or more units are being built, but they’re being built on the outskirts of the city, where there’s space, contributing to the expansive sprawl that characterizes San Antonio. Construction of mid-size, “missing middle” developments of 2-4 units can help make neighborhoods more affordable for renters and first-time home-buyers.
Unless the Alamo City restructures how dense residential zoning can be, we may not see any meaningful increase in density and San Antonio will continue to sprawl outwards, creating a congestion-filled, traffic-heavy metroplex.
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