The New Braunfels City Council has unanimously rejected a proposal to discount municipal utility fees for an upcoming affordable housing development, while simultaneously instructing local government staff to explore alternate avenues to help cover the project's funding shortfall.
The planned residential community, known as Park at Dogwood, is slated to bring 76 apartment units to 1869 McQueeney Road. Developer The Park Companies is currently confronting a $2 million financial deficit in its construction budget, according to Jeff Jewell, the city’s economic and community development director.
In an effort to bridge that multi-million-dollar gap, the development team sought relief by requesting that city officials and New Braunfels Utilities forgive up to $500,000 in utility impact fees. These mandatory assessments are routinely charged to newly constructed developments to offset the broader costs of connecting to and expanding public infrastructure.
With the total utility impact assessments for the McQueeney Road property estimated at approximately $1.3 million, granting the requested $500,000 relief would have delivered a nearly 40 percent fee reduction to the builder.
Because New Braunfels Utilities operates as a city-owned entity handling water, wastewater, and electric services, its established fee relief policies mandate formal guidance from elected city leaders. During their Monday session, council members voted 5-0 to advise the utility board against approving the waiver, while formally directing municipal staff to explore alternative funding channels. Neither Mayor Michael French nor Councilwoman Toni Carter attended the proceeding.
As designed, Park at Dogwood is intended to house low- to moderate-income households earning between 30 percent and 60 percent of the area median income. Depending on the size of the family, that qualification threshold translates to an annual household income ranging from roughly $21,000 to $54,000.
Monthly rental rates across the complex are projected to vary between $424 and $1,196, based on unit dimensions and the tenant's verified income bracket.
According to official municipal filings, the total price tag for the development stands at approximately $22.3 million. The primary financing mechanism relies on the federal Low-Income Housing Tax Credit program, which granted allocations to the Dogwood complex back in 2024.
However, progress stalled after the Federal Emergency Management Agency introduced revised local floodplain designations, forcing the development team to undertake extensive redesigns. Although the tax credit allocation was initially forecast to yield $17.6 million toward construction, the resulting project redesign and schedule delays diminished that equity value to roughly $15.7 million, triggering the current budgetary gap.
To mitigate remaining expenses, municipal records outline additional relief strategies, including the potential waiver of approximately $250,000 in roadway impact fees. Furthermore, Jewell noted that the developer has negotiated a partnership with the New Braunfels Housing Authority to grant the site an exemption from local property taxes.
Despite expressing general enthusiasm for adding affordable housing inventory to the city, council members took issue with using utility revenue to subsidize the development. Councilwoman Nikki Shaw emphasized that New Braunfels Utilities has systematically increased its utility rates each year since 2023 to finance capital infrastructure needs, making fee waivers for private development inappropriate.
Characterizing the concept of waiving developer impact fees during ongoing rate increases as problematic, Shaw advocated instead for utilizing the New Braunfels Economic Development Corporation. She noted that the economic board oversees a dedicated segment of local sales tax proceeds intended to foster business growth, which could serve as a more suitable incentive vehicle to cover development expenses.
The discussion also addressed pushback from community members who spoke during the public comment portion of the meeting. Among the critics was local resident Eva Pepitone, who argued that the complex would harm the neighborhood and overburden local schools, asserting that an influx of single-parent households would result in parents being unavailable after school hours to assist students with homework.
Council members firmly pushed back against those characterizations. Councilman Michael Capizzi rejected the negative portrayal of prospective tenants, calling the housing development a vital hand up for working families and expressing support for Shaw’s proposal to seek economic development funding.
Councilman D. Lee Edwards delivered an emotional personal reflection to underscore the value of attainable housing, recalling a period in 1977 when his circumstances shifted drastically from financial stability to residing in a rural South Carolina single-wide mobile home for $125 per month with an infant. Edwards emphasized that affordable developments offer essential footing for ordinary families striving to overcome economic hardship.
Other participating residents echoed the council's perspective, expressing support for workforce housing initiatives while maintaining that standard utility customers should not absorb the infrastructure costs associated with private development fee waivers. City administrators will now evaluate alternative municipal tools and economic development resources to assist the project without directly reducing utility fee collections.
(0)