145. Opportunity Home is Rebuilding Public Homes and Public Trust for its Centennial Vision

Bob Rivard [00:00:04]:
Welcome to Big City Small Town, the weekly podcast all about San Antonio and the people who make it go and grow. I'm your host, Bob Rivard. Everyone who lives and works in San Antonio is aware of the city's housing crisis, one we seemingly share not only with nearby Austin, but every other major US City housing crisis made worse by years of stagnating wages in an inflationary economy, the pandemic of 2020 and 21, and the failure of cities to keep up with new housing starts that match the rising number of people looking to buy or rent at prices that fit within their budgets. We now have hundreds of thousands of San Antonians who are paying more than 30% of their income to cover their mortgage payments or rent, which economists warn is a high risk proposition for individuals and families struggling to make ends meet. Our guest today is Michael Reyes, the CEO and president of Opportunity Homes, San Antonio's housing authority. In that role, Reyes and His staff of 600 employees currently provide housing assistance to nearly 50,000 San Antonio residents. And they manage a waiting list of many more hoping to obtain housing assistance. Opportunity Home has an annual operating budget of $250 million and oversees assets valued at more than $500 million.

Bob Rivard [00:01:20]:
As big as those numbers may sound, they are far too small to meet the market demand for more affordable housing in San Antonio. Michael Reyes, welcome to Big City Small town.

Michael Reyes [00:01:30]:
Thank you for having me.

Bob Rivard [00:01:31]:
Those are big numbers, daunting numbers.

Michael Reyes [00:01:34]:
Those are big numbers, but they're also reflective of what's happening across the country. There is a national housing crisis. We certainly see it in San Antonio, but it's also a crisis of many other things. It's a crisis of uncontrollable urban sprawl. There's also a crisis of lack of vision of where we want to head in the next decade or two decades. There's lots of ideas, but concrete plans we're still in the process of, as a city, I think, bringing that to fruition. So there's many crises, but the housing crisis is certainly something that's of significance here, where you have more than 50% of renters here that are cost burdened, meaning they're spending more than 30% of their income on housing. From my vantage point as the largest affordable housing provider in San Antonio, there's something happening underneath that we're not talking about.

Michael Reyes [00:02:22]:
There's also a public housing crisis. So what's happening now? The HUD provided the initial funding in 1937 to build public housing, 6,000 units for deeply affordable housing in San Antonio in San Antonio. And over the decades, you know, that funding has kind of disappeared. So now we have this infrastructure with half a billion dollars in deferred maintenance. This morning we just found out across the country that number is 169 billion across the country. So where's that money coming from? And over the years, you saw several administrations, you saw the Obama administration and before that come up with programs like Hope 6. You saw choice Neighborhoods. You also saw programs like the rental assistance Demonstration or RAD programs that HUD created to incentivize housing authorities to work with the private sector.

Michael Reyes [00:03:09]:
And that has helped renovate housing, but at a cost. Right, because it was almost auctioning off these deeply affordable homes to private entities. And that's where I think it's not something we're interested in doing because these are very vulnerable folks. At Opportunity Home, almost half of our 85,000 residents are children. So I remind our staff all the time, in many ways we're a children's organization. Right. So half our children and a good chunk of the other remaining 85,000 are older adults who just want to live in a safe place with dignity and respect. And so these are very vulnerable populations.

Michael Reyes [00:03:47]:
What we don't want to do is to follow that model of Hope 6 Choice and now RAD in privatizing our public housing stock. It has to remain affordable and it has to remain publicly owned. And so right now we're in the process of creating that 10 year plan leading up to our 100th anniversary. I'm calling it the Centennial Vision. So for the first time in 88 years of our history, we're going to pursue renovation of all of our 6,000 public housing units at 59 properties across the city. We have the benefit of looking at our peers across the state and across the country in terms of what they did wrong, what they did right. And so we have the benefit of hindsight, so we know what we want to do, what we don't want to do. And my happy to get into that, but that, that goes into specifics.

Bob Rivard [00:04:36]:
Well, I'm sure there is a frightening price tag attached to redoing 6,000 units of public housing. And would it be wrong of me to say, Michael, that I've seen policymakers at the national level lose their affection for public housing and believe that mixed use housing projects are the way to go. And thus we've seen a diminution of, of support, financial support for the existing public housing content that's in San Antonio and other cities. And some public housing projects have been eliminated wholesale in some cities. So is it realistic to hope that we can keep those 6,000 units at that level and that we can find the funds to keep them in condition that allows people to live with dignity and respect in public housing?

Michael Reyes [00:05:24]:
You're right. Over the decades, it's bipartisan support for not supporting public housing. Right, because the government wants to get out of the business of public housing. So there's been underfunding, there hasn't been monies to put into capital improvement movements. So we've seen that across different administrations. What there is bipartisan support is for vouchers because they see vouchers as getting the government out of the public housing business. And so with, for example, Choice and with rad, you saw the introduction of vouchers being embedded into these units. The problem was there was always this partnership with the private sector.

Michael Reyes [00:06:00]:
So the private sector ended up owning them, managing them, and that's not necessarily the best option. Here in Texas, we remain as the largest housing authority in the state, the last housing authority to reposition our public housing. And in many ways, again, to my point earlier, we have the benefit of hindsight. What worked, what didn't work in other cities, for example, in El Paso, they repositioned all of their 6,000 public housing units within six years, meaning they are now managed by the private sector. They are now owned by the private sector. And after 15 years, the housing authority has an opportunity to retain ownership. But after a certain amount of time, what I've been able to see across the country are housing authorities like Cambridge, Massachusetts, who have embraced these new financial HUD tools like RAD and Section 18. But they were intentional about ensuring they remain publicly owned and publicly manage.

Michael Reyes [00:06:57]:
And I think that's something we want to do in here in San Antonio. So all this to say, let me give you a clear example of what that means. For the last few decades, a public housing unit receives a public housing subsidy, a Section 9 subsidy, about 600 bucks, although it costs around 900 to maintain. So right now, the housing Authority is losing $1 million every month in public housing operating expenses. If you're running a nonprofit or a for profit, that's not sustainable. That's not sustainable. So now we have two issues. We have half a billion dollars in deferred maintenance we have to deal with, and we're also operating a million dollar loss every month.

Michael Reyes [00:07:33]:
So there are two scenarios here. Either one, we're going to lose our public housing stock because it's going to crumble to the ground, or the organization is financially going to be insolvent and not be able to perform. So those are not two good scenarios. So there's no choice here. There's no choice but for the housing authority opportunity at home to find a new path. The new pathway is the repositioning. But keeping in mind the public entity part and the public ownership part.

Bob Rivard [00:07:58]:
You don't want to sell any of the 6,000 units into the private sector.

Michael Reyes [00:08:02]:
These are vulnerable families. Being a former resident of this organization.

Bob Rivard [00:08:06]:
You were born at Alizon Apache. This is sweet to have somebody running our housing authority in San Antonio that grew up in public housing.

Michael Reyes [00:08:13]:
It's a full circle moment for me. Having had a 20 year career in D.C. and working in international affairs, I got to see housing from across the world, primarily in Southeast and Central Asia. I got to see how good public private partnerships work and how some partnerships were not effective. So I bring the lived experience and also that kind of global perspective. We know here in San Antonio we have to retain our 6,000 public housing units. The key here is in the future because if we're going to transition them from a Section 9 subsidy to a Section 8 subsidy, they're in a different program. So they will still be public housing like, but it won't be in the public housing program.

Michael Reyes [00:08:55]:
So what is public housing? Public housing is three things. One, it's affordable housing forever. It has really strong tenant protections and it's 30% of one's income. That's what public housing is. So when we transfer to the new Section 8 program, project based vouchers, those tenants of what public housing is will remain individuals. Residents will still pay 30% of their income, they'll still have robust tenant protections and it'll remain affordable forever. The difference is on the back end, on our end, instead of getting, for example, 600 bucks for a public housing unit, the voucher is worth about $1,200. What does that mean? We have more revenue coming in to keep maintenance up and running, pay for resident services and have an emergency rainy day fund on the side.

Michael Reyes [00:09:40]:
So whenever the roof leaks or there's an issue with the foundation, we actually have money to maintain it. What we don't want to do, move forward with this strategy and not have a plan for the future. So what we don't want to do, for example, in some of our legacy public housing properties, renovate it, get it up to speed and then in 30, 50 years it's back to where it's currently at in its state. That's what we're, we cannot do.

Bob Rivard [00:10:02]:
So a couple questions. Let me Just jump in. Of course, first of all, for our audience, this has nothing to do with state education, state funded education vouchers. These are vouchers that come from the federal government and allow people who are not living in public housing units to bridge the amount of that they can pay for their rent in the private sector by giving a landlord or landlady a voucher which in effect is a federal check that can be cashed by the housing authority or by the private sector landlord. Right.

Michael Reyes [00:10:32]:
In this case with the project based vouchers, the voucher stays within the unit so it doesn't travel with a normal housing choice voucher. The voucher travels with the resident and if they decide to move to different parts of town, the voucher travels with them. A project based voucher stays within the unit. So it's very. So from the resident's perspective, they don't see a difference in terms of how much they pay.

Bob Rivard [00:10:52]:
Why don't landlords like them? Many landlords won't take a voucher driven individual who wants to rent or family. And I don't know if that's because they're making a socioeconomic judgment about the caliber of people or if it's because they don't see the vouchers as cash equivalents.

Michael Reyes [00:11:08]:
There's two things going on. One is good old NIMBYism. Right. Folks don't want, I think the decades old stereotypes of who has a voucher and we have to remind folks these are first responders and teachers and young professionals. Right. Who are using vouchers. Second is the bureaucracy of the federal government whenever you're a voucher. So if I have a house that I'm trying to rent and I get into the program, I have to fill out X number of documents, I have to wait for an inspection, then I have to wait for approval from tenant whether they're going to accept the determined rent.

Michael Reyes [00:11:42]:
And then we're going to wait for the housing authority to provide final approval. It's a lengthy process. Now if I had full control over it, I would make it a two day process. Unfortunately, right now it's a 30 to.

Bob Rivard [00:11:53]:
45 day process that's tough for somebody that owns one extra property and is trying to use that for their own income.

Michael Reyes [00:11:59]:
That's right. At the same time, no one in my organization, all 600 employees, we want to make sure we're following the federal rules. No one wants to break federal law. But at the same time it's burdensome for landlords. Right. And it's burdensome for those mom and pop shops who want to be able to help our fellow citizens in the city and provide them housing. So now there's a workaround here. Their keen Housing Authority in New Hampshire decided, you know, we don't want to deal with a federal bureaucracy.

Michael Reyes [00:12:26]:
We want to make sure landlords and tenants are able to get housing right away. And so they. They started a direct assistance program. So instead of going through all the red tape, they provide the subsidy directly to the resident, no paperwork. They being the state, they, meaning the Public Housing Authority, via HUD funding, provides a subsidy to the resident. So you eliminate the paperwork, the red tape. But now it's incumbent upon the resident who receives their subsidy to use that money to pay rent. They've been doing that for 21 years and has been highly successful.

Michael Reyes [00:12:57]:
So that's something that I think it's worth exploring here in San Antonio as a pilot program to see if it'll work. But again, the goal here is to minimize the red tape and to move folks into housing as soon as possible.

Bob Rivard [00:13:08]:
I want to go back to something because I know our people listening or watching are going to ask, yeah, but how is Michael going to pay for the renovation of 6,000 units if the federal government pipeline of, you know, housing and Urban development subsidies have slowed?

Michael Reyes [00:13:25]:
That's a great question. And so part of the repositioning is not only do we transfer subsidies from Section 9 to Section 8, but most importantly, the deed of trust for those 6,000 units, which currently sits in Washington, D.C. at HUD headquarters, gets transferred to us. We become the owner of these units. What does that matter? Let's say you're a renter. You're renting an apartment or a house in San Antonio. Can you renovate your kitchen? Can you renovate your roof? No, because you're a renter, you don't own the building. But if you're a homeowner, you could suddenly maybe have some equity and get some financing and a home equity loan, if you will, to refinance your renovations.

Michael Reyes [00:14:02]:
Right. You have the equity to refinance or to get a loan to modernize your home. Same idea here. Once a deed of trust gets returned to us, or to us rather suddenly, we can leverage that equity and come up with a financing to renovate the 6,000 units. So this is something that's happened across the country. We have yet to start, but it's time to move that direction.

Bob Rivard [00:14:27]:
This is complex.

Michael Reyes [00:14:28]:
It's very complex.

Bob Rivard [00:14:29]:
You've got a lot of sections and numbers that you're throwing at us, but it Sounds to me like ultimately you're going to be more dependent on local funding than ever before and that we're going to need to have a robust public debate about that. The city. In 2022, City of San Antonio passed the first ever housing bond. $150 million housing bond, very significant. And yet people would also argue it's a drop in the bucket compared to what's needed. And there'll be. There's been. There was talk of even a special election for a housing bond this year that didn't develop, as far as I know.

Bob Rivard [00:15:02]:
There's certainly talk about an even larger housing bond in the 2027 bond. Perhaps. What, what. What are your prospects for getting the city and for that matter, maybe Bexar County. I'm not sure if your footprint that Opportunity Home serves is limited to the city or if it's the metro area, how that works.

Michael Reyes [00:15:20]:
Opportunity Home is restricted to. To the San Antonio proper metro area jurisdiction. Bexar county has their own housing authority, which is outside the metro area. But, Bob, to your question about the housing bond, it was highly successful, right? I mean, we're indebted to the taxpayers to approve that. We made great inroads to implement our ship, which is our Strategic Housing Implementation Plan. It's our roadmap in terms of how we're going to address housing. So we're putting units out there in the community, we're preserving units and we're producing units and helping with our homeless services and helping with permanent supportive housing. So it's been highly effective, the housing bond.

Michael Reyes [00:15:57]:
Additional resources are needed. Right. So we anticipate in 2027 there'll be a new housing bond. We're hoping it's much higher than the previous1 of $150 million.

Bob Rivard [00:16:09]:
How much higher?

Michael Reyes [00:16:10]:
300 million at the very minimum. I mentioned earlier that our organization alone needs 500 million just to keep the lights on. So the needs are great. I'm optimistic because I think all that momentum we obtained during Mayor Nuremberg's tenure, I think it's continuing with Mayor Jones. I had the fortunate opportunity to meet with her already a few times and affordable housing is a priority. And I think that momentum is going to. We're going to keep that momentum going forward. And I also sit on the Housing Commission.

Michael Reyes [00:16:40]:
I know the Housing Commission is very keen on ensuring that we're meeting the targets of the Strategic Housing Implementation Plan. And we're ensuring that we're working as a collective ecosystem. We have. Things are really going well now. We have a great housing officer that's coordinating our housing partners in a really effective way.

Bob Rivard [00:16:58]:
So you're talking about at the city of San Antonio. This is Michael.

Michael Reyes [00:17:02]:
Mark Kimono.

Bob Rivard [00:17:03]:
Mark Kimono. Excuse me.

Michael Reyes [00:17:04]:
Yeah.

Bob Rivard [00:17:04]:
Who has a big background in everything from homelessness to affordable housing.

Michael Reyes [00:17:09]:
Right. And Mark Lamona has been really effective in terms of getting the partners at the table and collaborating for my organization, Historically, it's worked in silos like most organizations. Right. But in the last, you know, most recently, especially in the last year, we've seen the organization really collaborate and partner with our other housing partners in the city and as well as with the city of San Antonio. So there's great momentum here, and we want to maintain that and keep that going as we head into the 2027 housing bond.

Bob Rivard [00:17:36]:
You mentioned something earlier that I think is worth pausing and noting. San Antonio has the largest housing authority in the state. We're not the largest city, certainly, when you measure the metro areas, very much are in the shadow of Dallas or Houston. Is it a measure of our level of poverty that we need to have the largest housing authority? And do we have the most need?

Michael Reyes [00:17:55]:
We have the largest number of units, and that's how it's determined that we're the largest housing authority. But this remains one of the biggest American cities with generational poverty, and that continues to be an issue. And we've seen that from a housing perspective with the redlining and with the segregation that happened earlier last century. And I'm optimistic about our centennial vision. The next 10 years is the goal ultimately. Right. Is to remove those barriers. Right.

Michael Reyes [00:18:20]:
And to challenge those redlining neighborhoods and move them to ensure that they're a lot more prosperous as they should be. So there's a lot of work ahead of us, but I think there's vision and there's strategy moving forward. But what I'm mindful of, and again, from my international lens, right. Working at the United nations, we measured international poverty by how much people made per day. So the measurement is $3 per day. That measured the poverty line across the world. In San Antonio, that dollar amount is $88. So if you make $88 or less per day in San Antonio, you're in the poverty line range.

Michael Reyes [00:18:56]:
At Opportunity Home, that line is $30 a day. So can you imagine from $30 to $88 a day living in this city with that amount of money, you can't find transportation, basic necessities, and food and utilities, but much less housing. Right. Those are major challenges that our citizens are facing. So from my vantage point, we know that economic Segregation just as much as racial segregation really affects how a city thrives. There's a great landmark study from Raj Shetty, C H E T T Y from Harvard University, famed economics professor, that did great analysis of 70 million data points that showed that kids living in economically diverse neighborhoods have a bigger chance of exiting poverty. And when I step back and look at our city as a whole, that's been always our biggest challenge. Right.

Michael Reyes [00:19:53]:
How do we remove those barriers, those economic barriers? Right. I think once we do that, we'll really see our city thrive when we challenge those concentrated areas of poverty and give these kids, and as I mentioned, opportunity at home. Half of our residents, 85,000 residents, are kids. Give these kids a chance to see that diversity in their neighborhoods, because that's the only time when we're. And that's the only way we're really going to address our generational poverty issue here in the city.

Bob Rivard [00:20:21]:
If we looked at your footprint in the city divided by 10 council districts, it would be fair to say, correct me if I'm wrong, that we're not equitably distributed throughout the city and that there is a lot of NIMBYism and that we've seen housing projects come on the drawing board and get defeated by a city council culture in which there's a tradition of deferring to the home council person. And if they don't want something in their district, the other council members tend to quietly go along with that, even if it means that you're perpetuating economic discrimination traditions.

Michael Reyes [00:20:57]:
It's rough. And, you know, I know council. It's difficult to be a council member in this city or any city, right? Having to deal with the various viewpoints. But from my vantage point, from a housing. Affordable housing provider on one end of the city, if I mention the word affordable housing immediately, I get the reaction, oh, keep that away from us. Right? We don't want any of that. If I go to another part of the city and mention the words affordable housing, I hear we need more of that, but we need it really deeply affordable. So there's, you know, the classic tales of two cities, right? It's not exclusive to San Antonio.

Michael Reyes [00:21:30]:
It happens in many American cities. Right? But I think that's an opportunity for the city, right, for the city council and our elected officials to. To kind of unite and challenge those who question affordable housing. But again, it's questioning something much larger, right? Years of stereotypes of who those folks are. I'm here to tell everyone that those folks are kids and older adults. It's not those folks you see in Hollywood films or those stereotypes that we've grown over the years seeing on tv. Those kids and older adults deserve a place to live with dignity and respect and have the option to live where they want to, not where they have to, for our workforce, housing folks, they deserve to live where they work. Whether it is in the future sports and entertainment district, whether it's La Cantera, whether it's on the southeast side of the Brooks area, they deserve to live where they work.

Michael Reyes [00:22:20]:
And we need to ensure that those opportunities exist well, and people deserve to.

Bob Rivard [00:22:23]:
Live within reasonable range of where they work. And we've, we've identified the eight or nine major economic nodes that are in our metro area. And they range from everything from the Medical center to Brooks, which is just named, or Port San Antonio or Northeast San Antonio, around I10, I mean, excuse me, I35 and 1604. And so we need housing in those areas that people don't have to take buses, two buses to work, or spend an hour in a car.

Michael Reyes [00:22:52]:
That's right. And I think that's why we're excited about via's new rapid transit line along the Green and Silver lines. I think it will link the city in a way that hasn't been linked before, and I think it's promising. But the goal for housing providers is to ensure that future preservation and future new development happens along these lines. Right, because you want folks to be able to access transportation and be able to walk to the nearest bus stop or the nearest VIA Transit regional center. So we have to make sure that those are linked. And again, historically, there hasn't been the synergy between transportation and housing. VIA does its thing, Housing Authority does its thing, city does its thing.

Michael Reyes [00:23:32]:
But right now there's great collaboration. And so as we look at our own strategic plan in the next 10 years and how it works in concert with the city's housing roadmap, we have to ensure that transit oriented housing is a priority.

Bob Rivard [00:23:46]:
So your offices, Michael, are near downtown, just on the edge of South Town, on, on South Flores Street. And I want to talk about downtown a little bit and how you address housing shortages there. We've been working assiduously since the administration of Mayor Julian Castro, who launched the Decade of Downtown initiative to make the urban core as accessible to locals as it's been to visitors traditionally with our visitor and convention economy. And so we've added quite a few housing units from river north down to South Town and a lot of restoration and gentrification in the historic neighborhoods around the downtown. Area. I noticed there was an op ed in the Express news this week from UTSA President Taylor Amy saying the development on the west side, what we're calling now downtown West, I think, or west downtown, where the new Missions ballpark's gonna be. And then he was advocating for people to vote yes on propositions A and B and making the case that the expansion of the downtown campus and bringing a lot more students downtown is going to be dependent on those kinds of amenities existing as well as more housing. So we need student housing.

Bob Rivard [00:25:04]:
We know from our own downtown visitor economy we're desperately in need of workforce housing for people that do work in that visitor economy. And then of course there's market rate housing that's being built. So how do you see us solving the, the downtown riddle to where it's more accessible for everyone of all incomes?

Michael Reyes [00:25:26]:
Absolutely. You know, it's really interesting. It's been interesting to hear the conversations the last few months on especially the sports and entertainment district and the need for affordable housing. And I think Opportunity Home has been kind of sitting here in the back, you know, watching from afar and thinking, wait a minute, we've been here the last 10 years. The largest affordable housing footprint is across the street from the Future Project Marvel, and that's in Victoria Commons, right along labor street and Cesar Chavez Street. And we've been working actively for 10 years to bring affordable housing to that area to downtown.

Bob Rivard [00:25:57]:
I drove it last night in anticipation of this episode. It's amazing what's going on over there and how much is still going up out of the ground and for sale.

Michael Reyes [00:26:06]:
We've built so far around 700 affordable units. We're in the process of building another 400 units. So it's a thriving neighborhood and it's a stone throws away from the future if it happens. Future arena. From our vantage point, we've been actively working on it. We anticipate getting the job done, but at some point we're going to run out of land and options. And so what? There are two things we can do. One is the existing affordable units, which are affordable.

Michael Reyes [00:26:32]:
We can really make them deeply affordable and put some vouchers in there. So instead of it being a tax credit rent, which is, you know, I'm going to throw out a number, 1200 bucks and we put a voucher in there. It's 30% of one's income. So if you're working at a Riverwalk restaurant or you're working across the street at the Tower of the Americas and you're making $20,000 a year, it's 30% of your income. And so that rent dramatically falls down and provides opportunities for those working across the street at Hemisphere to work to live across the street. So we're talking with the city and we had a discussion with the mayor recently about how we can draw down those rents to ensure that there's opportunities for those working nearby to live, to continue living in that area. The second thing is the land around the Alamo Dome. There's opportunities there as well.

Michael Reyes [00:27:22]:
In fact, just a block north of the sports and entertainment district north of the Alamo Dome, we just produced a new development there. We're in the process of producing a new development there, about 275 affordable units. We provided $50 million in housing bonds to build this new development. It's going to be smack on the very silver line, future silver line right in front of it.

Bob Rivard [00:27:46]:
This is a public private partnership. It's actually under private development.

Michael Reyes [00:27:49]:
It's under private development, but it's a public private partnership. We remain the owner, we own the ground lease and it remains affordable as long as we remain the owner, which we will remain the owner for 99 years. But it's one example of working along the future line and to ensure that we're bringing affordable units to our city and to the immediate downtown area.

Bob Rivard [00:28:10]:
So developers I speak with cite two significant impediments to pursuing more affordable housing down here, or really any housing of any kind. One is interest rates, which are beyond our control. It's just too expensive to access capital right now. But the second one is getting the city to restore incentive levels so that they can build multifamily developments that have various price points within them. With the percentage of the units being dedicated to workforce or affordable housing.

Michael Reyes [00:28:41]:
On the interest rates, I think that's that. You're right. The interest rates have been really high. And what's different, again, we're trying to. This is not your grandfather's housing authority. We're trying to move to the future and be innovative and be a 21st century housing organization. And as is the case, you know, a few months ago, I was mindful of high insurance rates, high interest rates and high construction costs. And so what we did, for the first time in our 88 year history, we sought to leverage our equity, that $500 million you mentioned earlier of housing equity, and obtain a credit score from Standard and Poor's, an S and P credit score, just as everyone individually has a credit score.

Michael Reyes [00:29:22]:
Now the housing Authority for the first time in eight decades has a credit score. What does that mean. It means we've effectively become our own bank. This is a game changing moment for the organization. It's a huge milestone. What does that mean? We can. Now to your point about high interest rates. Instead of borrowing from a traditional bank at 8%, we can lend from our new credit rating at 6%.

Michael Reyes [00:29:45]:
8% versus 6%. We're talking about millions of dollars of savings, which means millions of dollars being pumped back into affordable housing. So now it's actually doable, right. To produce in a really sought after area downtown where land is really expensive. Despite the construction costs and insurance costs, we now are able to leverage this new financing mechanism through our credit rating. And so I anticipate we're going to see a lot more coming down the pike with this.

Bob Rivard [00:30:12]:
Getting Those rates below 5% would be even more effective for everyone. I want to go back to where you were born, Alizon Apache Courts over there on the near west for. For people that have never seen. Seen them. A lot of controversy a couple years ago, Michael, when. When the community first debated whether to raise the property as being beyond repair or to repairing them. And community advocates very much wanted to go the restoration route. I think people that were more focused on costs and economic development wanted to start over.

Bob Rivard [00:30:47]:
I think I did the math at the time, correct me if I'm wrong, but the cost of renovating was more than $200,000 a unit for what was anticipated. Which at the time raised the issue for me. Why not just build these families a new house and give them the title for $250,000? Because you could certainly, certainly do that with entry level housing. And the cost just seemed to be unsustainable. But give me your feeling about that, because you have probably a very different perspective than I do.

Michael Reyes [00:31:17]:
Let me go back, right. I think of former city manager Cheryl Scully, who was a terrific manager and took our city to a different direction. But what happened is she touched the holy grail of contracts and she paid a price for it. There's also the talk about the police union. Those are those union contracts that we.

Bob Rivard [00:31:34]:
I didn't know we were going to talk about that.

Michael Reyes [00:31:36]:
The holy grail of contracts. But in housing, there's the holy grail of housing, and that's Alazan. And former mayor T. Snettles, when he was mayor, tried to do it over the years.

Bob Rivard [00:31:46]:
He lives in the neighborhood and he.

Michael Reyes [00:31:47]:
Lives in the neighborhood. The last two my two predecessors lost their roles in this organization because of Alazan.

Bob Rivard [00:31:54]:
And we want you to stay. Let's be clear on the podcast, we're not trying to usher you out, and.

Michael Reyes [00:31:59]:
I want to stay. But what a greater achievement, right? Personally, to rehab and to provide 21st century living to the community where I was born, where my mother, grandparents, and great grandparents lived. What greater achievement. What greater achievement to that legacy that they left behind? Where mom in the mid-1970s said, you know what? My kids deserve a backyard. And she saved money for two years quietly, without my father knowing, and said one weekend, we're going to move because my kids deserve a backyard. That action she took gave me an opportunity to sit here before you, and I want other kids to have that opportunity. Right. So nothing more than I want to do is to rehab and give Those families, those 501 families living in those units, that opportunity as well.

Michael Reyes [00:32:48]:
But I know that if I try now, I'm now going to be the third person to pay a price for getting into that space.

Bob Rivard [00:32:56]:
So are we saying that we have to pay whatever price we have to pay because of nostalgia?

Michael Reyes [00:33:01]:
Nostalgia and history and culture? And I think the conversation over the last few years has morphed into, let's care about the buildings and not necessarily the people in there. We're trying to preserve housing, and I think there's some folks who are trying to preserve buildings, and they're two different things here. Right. And we have to really respect both. The history of the neighborhood is important, but the lives of the folks living in these buildings are important, too. In this year, 2025, we have families living in the cinder block home was built in 1937.

Bob Rivard [00:33:31]:
And they're very small, almost claustrophobic rooms. I've been in many of the units. They're not welcoming.

Michael Reyes [00:33:37]:
They're not welcoming. As a kid, I remember going to my grandmother's house every Sunday or her unit at Alazan and having to navigate the staircase. And everything was so intimate because it's. The square footage was already tiny. There's so many challenges with getting there, but I think the conversation has gone off track. And so what we want to do, what I want to do is I need to prove myself. I get that. I want to be able to rehab our other legacy properties around the city and show them this is what's possible.

Michael Reyes [00:34:05]:
Doing it the right way, not the way it was done before. My predecessors had. They were good people. They had good intentions. They were using the only tools, financial tools that they had. That meant tax credits to come in, which meant that these units were not going to be as affordable as they are now. Was it the best option? No. But that was the only option they had.

Michael Reyes [00:34:23]:
My immediate predecessor, you know, again, a good person, he was trying to do the best he could to make it happen. My intentions are to preserve them that affordability the families deserve. If we don't provide that affordability, no one else will. But I want to make sure we do it the right way. Right.

Bob Rivard [00:34:39]:
One way to increase affordability is to increase inventory. Let's just take the case of the soap factory apartments that are on the, you know, the west side of downtown here, where there was so much controversy and people who had never set foot over there took a highly polarized position of protecting them. But there are 300 units over nine acres. And any developer will tell you, well, you can almost go 10x on that in terms of how many units that much land should support. And I would argue that rather than redo the existing Alizon Apache, with their cinder block construction and their small rooms and lack of modern, even late 20th century amenities, you might be able to double or triple the number of units on that footprint. If you embrace 21st century design.

Michael Reyes [00:35:27]:
Absolutely, we can do it. So they're currently 501 units. What we need to do is ensure those 501 deeply affordable units remain, but add an additional 200, for example, and those could be, you know, higher rents to subsidize those 501. What we cannot do is to rehab it and create only 501 deeply affordable units, because in 50 years we're going to be in the same space and these buildings not having the resources to address capital needs and maintenance deferment and not have a rainy day emergency fund. So we cannot do that. If any redevelopment is going to require that we replace all 501 units that are deeply affordable, but we have to have additional units to subsidize those. And that's where it gets a little controversial because there's some folks who are saying, no, no, no, we don't want what's considered mixed income, but you need those higher subsidized units to pay for the 500 won. So that's where the conversation is going to be at.

Michael Reyes [00:36:21]:
And it's going to be a long, hard conversation. We can have it or right now we have 59 housing, public housing properties across the city. I want to focus on the other 58 and show what's possible and what can be done and do it the right way. Maintain their affordability, maintain their public ownership, and then come back saying, look what we've done. Don't listen to the words, but see the actions. Right? And I Think that's the goal here, is we need to show what's possible with this new funding strategy. And I think that's. And we'll be okay.

Michael Reyes [00:36:50]:
But we need some time to get there. And I don't want to make a knee jerk decision or a reaction because it's so politically sensitive and there's just so much work to do.

Bob Rivard [00:36:58]:
It's been going on for some years. Do you think realistically that it can occur under your watch if I'm here.

Michael Reyes [00:37:06]:
In a few years, the way things are going, you know, the tenure has been two or three years because of Alazan. Alazan has been that one point where it's so sensitive. If I decide to tackle Alazan now, I'll be gone in about a year or two.

Bob Rivard [00:37:19]:
I think we ought to get elected officials and other community leaders to agree that we're sick and tired of leadership changes at opportunity home and that we're not going to tolerate community pressure to sacrifice somebody because somebody's not getting their way. It's just not a good. That's not a good way to do the public's business.

Michael Reyes [00:37:37]:
Our city suffers, right? And the people who are living there suffer. And I challenge anyone who says keep them the way they are to spend a night there, spend a weekend there and tell me how you feel afterwards. I saw it as a kid. I saw it with my grandparents. I saw it with my aunts and uncles and cousins. Most people would not want to live in those conditions. And it keeps me up at night that the organization has been. Its hands have been tied and unable to move the needle because of these political issues.

Michael Reyes [00:38:14]:
The residents in that neighborhood deserve a better way of living a better life. Again, half of them are children. They deserve better. I remind our staff, our 600 staff every day. I try to. Whenever we are doing the hard work and we get the pressure from external pressure and political pressure and financial pressure, we have to remember we're doing it for these kids and these older adults who depend on us. They depend on us to make quicker decisions, faster decisions. And if we keep that as our narrative, right, maybe we process that voucher faster, maybe we build that building faster, maybe we move the needle a bit faster, given that that's our motivation.

Michael Reyes [00:38:54]:
And I think we're going to be okay if we keep our eye on the ball. We have a strategy that we're building in place that's going to take us the next 10 years. That 10 year strategy that leads up to our 100th anniversary in 2037 is going to include Alazan, but it's not going to include Alazan in the front end. It'll be probably in the middle or in the back end. Again, we need to prove ourselves because I understand, I get the history of broken promises and maybe intentions that were not genuine. I get that history and that's important history. But there's folks of us, there's folks coming into this space like new elected members of the city council and new elected officials who should be given the chance to prove themselves. My intentions are to ensure that we have deeply affordable housing for our community.

Michael Reyes [00:39:38]:
But it has to be financially sustainable for the future. That way we're not revisiting the same issues in 50 years.

Bob Rivard [00:39:43]:
Do you feel like you're aligned, you and your senior staff, Michael, with your board?

Michael Reyes [00:39:48]:
We are. We have a terrific board and there's great momentum now. The problem is, to your point, Bob, earlier, is when you look at successful housing authorities around the country, right, Louisiana and Dallas and Austin, the key to their success is the stable boards and stable leadership. When you have folks reacting to news stories here and there and make these knee jerk decisions, you're affecting the entire ecosystem here. So we need some stability here. We've had it for a year, which doesn't sound like much, but in our world it's a start. But my advice is let's maintain a strong board, maintaining strong leadership. You know, these are good folks, right, with good intentions.

Michael Reyes [00:40:28]:
We have a lot of work ahead of us and it's really important to maintain that stability.

Bob Rivard [00:40:32]:
Well, I hope this conversation helps bring that into focus for everybody and not just our leaders, but people that vote and pay taxes and those of us who live so comfortably and privileged that need to pay more attention to this issue, but because it's such a pressing one in our city, I want to ask you, Michael, we're going to be running out of time here in a few minutes. Is the government shutdown in Washington going to affect your organization? And specifically? We've already talked about the red tape and bureaucracy surrounding vouchers, but could we see that program paused or the pipeline closed down temporarily to where that puts people at risk because they're not getting their vouchers or private sector landlords are not getting the voucher income?

Michael Reyes [00:41:14]:
I think there's some angst right now. I think we were notified recently that we'll have enough funding until the end of November.

Bob Rivard [00:41:19]:
That's only one month away.

Michael Reyes [00:41:21]:
That's one month away. I'm optimistic, being a former Hill staffer, understanding that politics, national politics, tends to dominate the front pages. But if you look underneath, there's some really key staffers, congressional staffers and really moderate and good people working on the Hill. And they all know that this is not sustainable.

Bob Rivard [00:41:42]:
The deep state.

Michael Reyes [00:41:46]:
November 1st is going to come around and the checks are not going to arrive and suddenly that public pressure is going to come into play and suddenly the White House is going to listen up, members of Congress are going to hear from their constituents. And so that pressure will eventually lead to the government coming back open. And I think we're going to be okay because and I say that there is bipartisan support on the Hill, both in the Senate and the House for voucher assistance, housing assistance. Again, our families here are 85,000 residents are constituents of elected officials. Right. So we're assisting the same families here. So I think cool heads will prevail and the government will open again sooner than later. But I hope it's a longer, a bigger lesson right down the road that these closures really affect communities at the local level.

Michael Reyes [00:42:34]:
And there's unnecessary heartache and burden that folks feel whether, again, it's a family of children or an older adult. We're better than this as a country and we're better than this as a state and city. And we have to be mindful of that as we move forward.

Bob Rivard [00:42:50]:
Last question. We're going to get past the Nov. 4 county election and we're going to overcome our budget deficit that city Council is wrestling with and have a new fiscal 2026 year budget and will go into 2026 and start serious conversations about that 2027 bond. And I can't let the program conclude without mentioning that you have an incredible waiting list of people that are hoping for some form of assistance for Opportunity Home from Opportunity Home. And of course, a $300 million bond would open up a lot of new opportunities for you to to whittle away the size of that list at this point. How many people are on your waiting list hoping for some sort of assistance?

Michael Reyes [00:43:37]:
We're at 63,000 folks.

Bob Rivard [00:43:40]:
So as many or more than you actually serve presently.

Michael Reyes [00:43:43]:
Right. Keeping in mind about 18% of the 63,000 are actually from out of state. So if you reduce that number, it's a lot less. Nonetheless, it's still a good chunk of folks.

Bob Rivard [00:43:52]:
You mean people that have moved here from out of state or that are applying for it even though they're not here?

Michael Reyes [00:43:58]:
There are folks who are not here and applying for it. So you can join a wait list in any part of the country if you want to and surprisingly enough, a good chunk of the 18% are from Chicago and Northern Illinois. Why? We're not sure why, but so they're applying and if they get their voucher, they can move down to San Antonio and use their voucher. So we are actually adding a local preference now to ensure that San Antonians first get called off the list versus folks from other cities and states just because it's the right thing to do. So we are actually addressing that this year.

Bob Rivard [00:44:28]:
So it's more like 50,000 locals.

Michael Reyes [00:44:31]:
Yeah, about 50,000 locals who are on the list. Nonetheless, it's still a large number. Any monies from the future housing bond are going to help address that. The larger strategic plan that we're putting together as well is going to have defined targets and deliverables. So it's not just kind of this ad hoc, you know, let's use these housing bonds to build sporadic places or with no direction. There is a direction. There's a city roadmap now. It's going to be in concert with our roadmap.

Michael Reyes [00:44:56]:
And so I'm really optimistic about what we can do.

Bob Rivard [00:44:58]:
Well, Michael, for a Elizann Apache boy who came out of multi generational poverty and had a fascinating career in Washington, in the world of diplomacy and protocol and working at the U.S. senate and the U.S. house and then the Asian Development bank, which I didn't know about until you told me about it, I think we're really fortunate that you came home and that we're fortunate to have you in the position you're in. So thanks for coming on to Big City Small Town and promise to come on again next year when we're serious conversations about the bond.

Michael Reyes [00:45:28]:
Absolutely. Thank you for having me and it's good to be back home.

Bob Rivard [00:45:35]:
As we approach this podcast's 150th episode later this year, we'll be adding some new sponsors that reflect the robust growth we've enjoyed this year after welcoming producer and co host Corey Ames to our enterprise, launching our YouTube channel, and our weekly Monday Musings newsletter. If you do not yet subscribe to my free digital commentary, I hope you'll do so now by going to our big City small town website and clicking on newsletters. The local media presence in San Antonio has been steadily shrinking since 2007. Believe me, I've experienced it personally, first as the executive editor at the San Antonio express news from 1997 to 2011, and then as we launched the Rivard Report in 2012, where I worked until 2022. If your company or organization would like to consider supporting our local journalism and programming as a sponsor, please drop me a line via social media or to my email@robertjrevardmail.com thank you. Thanks for joining us for this episode of Big City, Small Town. Please share this episode with friends and colleagues, and if you haven't already, sign up for Monday Musings, my weekly newsletter. Just go to bigcitysmalltown.com and add your email.

Bob Rivard [00:46:48]:
Big City, Small Town is brought to you by Western Urban Building a city our children want to call home, and by Geekdom, where startups are born and smart ideas become businesses. Thanks to Corey Ames of Ensemble, Texas for the production of this show. We will see you next week.