Tackling the San Antonio housing crisis: Start enforcing the regulations

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It’s hard to believe at first glance that some of the city’s aging, run-down apartment complexes can be so attractive and profitable to outside investors.

How can properties with units riddled with water leaks, contaminated with mold, and made uninhabitable by broken air conditioners offer such a decent return on investment? The formula, it appears, calls for cheating renters in a city where local officials seem slow to respond to such practices.

Journalism at its best allows a single reporter to really make a difference. San Antonio reporter Waylon Cunningham has published reports on San Antonio’s so-called Class C real estate sector, its ever-changing occupation of greedy owners, and the long trail of largely ignored tenant complaints about neglect, delayed maintenance, and seemingly indifferent enforcement of regulations to be required reading.

David Shippy, CEO of Shippy Properties

The fastest growing company in the city, according to real estate data cited by Cunningham, is Shippy Properties, an Austin-based investor property management company that now owns more than 4,000 units in San Antonio. The stated strategy of David Shippy, the company’s founder and CEO, who wrote a book in 2019 promoting his get-rich-quick methods, is to buy up working-class apartment complexes, cut maintenance costs and charge tenants extra fees place.

“I like to think of every apartment complex as an ATM,” Shippy wrote in his book Money Matters for Financial Freedom: The Fast Track to Prosperity in Life and Business.

Nearly three new leases were signed for every new unit built and rented in San Antonio in 2021. Just over 4,000 units were built, but just over 11,500 units were re-let.

According to a December report by CoStar, a real estate analytics firm, about 1 in 7 units in San Antonio was sold last year, a rate greater than any other city in the state and any city nationally except Atlanta. Those deals had a combined value of $3.6 billion in 2021, nearly doubling the transaction volume from pre-pandemic 2019.

Shippy’s crass business philosophy will come as no surprise to residents of one of San Antonio’s many run-down apartment complexes, but to those chosen to lead this city, where a housing shortage has meant rents have skyrocketed, and so has demand With supply outstripping what is playing into the hands of unscrupulous landlords, there is an urgent need to address the unacceptable living conditions that have only worsened during the pandemic.

One obvious answer is that city officials are dramatically increasing their team of building inspectors with the intention of using consistent enforcement of the regulations and fines to get property owners to comply with city ordinances and provide tenants with decent housing. Once such fines begin to eat away at profits, otherwise indifferent landlords will react.

Right now, city officials are relying on 311 telephone complaints from tenants to trigger a response. It shouldn’t be left to individuals to alert the city to unacceptable practices by investors who are only engaged in profit-making. City inspectors, supported by City Manager Erik Walsh, who in turn should be vigorously supported by Mayor Ron Nirenberg and the City Council, should take the initiative and make it clear to offending property owners that inappropriate housing practices will no longer be tolerated.

Already, some renters have been forced to move into local motels while the apartment owners concerned avoid serious consequences for their unacceptable practices.

Councilwoman Ana Sandoval (D7) recently visited the notorious Seven Oaks apartment complex, one such substandard apartment complex in northwest San Antonio, to see first-hand the living conditions no family should endure. She also met with evicted tenants at a nearby Motel 6.

The housing authority, which represents Austin-based owner, Achieve Properties, responded by unsuccessfully attempting to have San Antonio Report Photo Editor Scott Ball’s vehicle towed to prevent him from taking photos.

After her visit, Sandoval called on the city’s other elected leaders to take action to address the deplorable conditions she found at Seven Oaks. One can only hope that a vigorous and lasting response from the mayor and other city council members is in the works.

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