But those good times for renters might not last. The post-COVID development wave has largely subsided. Danny Khalil, CoStar\u2019s director of market analytics<\/a>, said that construction has slowed down and the demand for apartments will catch up.<\/p>\n \u201cThe supply cliff is real, or it\u2019s going to be by late next year,\u201d Khalil said.<\/p>\n CoStar projects the market to flip back in 2027 or 2028. That could mean rising rents and a tough market could return later this decade, which housing advocates fear will impact San Antonio\u2019s lowest-income residents the hardest.<\/p>\n Development bonanza leads to massive supply<\/p>\n In 2024, between 13,000 and 14,000 new apartment units were completed in San Antonio, said Ryan Baldwin, executive director of the San Antonio Apartment Association. Baldwin is a property manager who works with apartment owners and operators through the SAAA.<\/p>\n \u201cSince the fourth quarter of 2022, deliveries have been crazy in this market. San Antonio and Austin both have had some of the highest deliveries in the country,\u201d he said.<\/p>\n Investors had money to spend and housing was a good bet.<\/p>\n \u201cWe\u2019re in what\u2019s called a hypersupply when you look at a real estate cycle,\u201d said Pete Alanis, executive director of the San Antonio Housing Trust.<\/p>\n \u201cA lot of investor pools, whether it\u2019s private equity or tax credit equity \u2026 they look around the country and see where they\u2019re going to build,\u201d Alanis added.<\/p>\n Texas and San Antonio were popular destinations for several years.<\/p>\n Khalil said the 2022 Affordable Housing Bond, when the City of San Antonio allocated $150 million to maintain and incentivize cheaper housing, helped attract developers, as well. That had a particularly strong effect in the downtown housing market.<\/p>\n \u201cIt\u2019s quite clear from the numbers that the introduction of supply shifts the market in favor of tenants,\u201d Khalil said.<\/p>\n A good time to look for deals<\/p>\n At the beginning of 2022, 6.9% of San Antonio\u2019s apartments were vacant. By the beginning of 2026, that number was up to 16%. Renters have far more options this year and it\u2019s a good time to be looking for a new apartment, Alanis said.<\/p>\n Landlords are offering weeks without rent or waiving deposits.<\/p>\n \u201cFolks are still offering you concessions to get in the door,\u201d Alanis said. \u201cFor tenants, we\u2019re in a good place to get good deals, especially at new buildings in prime locations.\u201d<\/p>\n Baldwin said the opposite is true for landlords.<\/p>\n \u201cThere\u2019s a lot of challenges for owners and operators,\u201d Baldwin said.<\/p>\n Unfilled units and lower rents mean less profits and cash for people managing properties. In the short term, that can mean less amenities and delayed maintenance and upgrades, he said. In the long term, it can mean property sales and apartments going into receivership, where banks or lenders take over ownership.<\/p>\n \u201cThat\u2019s not always best for the property,\u201d Baldwin said. \u201cIn some cases, when that property is in that situation, those services aren\u2019t available.\u201d<\/p>\n Baldwin says he\u2019s concerned that it\u2019s hitting smaller, local landlords the hardest. Larger, institutional property owners can afford to take losses and even buy stressed properties, and newly built properties have an easier time attracting tenants, but those with smaller properties or finer margins don\u2019t have those luxuries.<\/p>\n Amber Esparza \/ San Antonio Report<\/p>\n A view of The Continental Residences looking down from the Sky Lounge, which is located on the 16th floor, faces San Pedro Creek. <\/p>\n The market will swing back<\/p>\n The development boom of the early 2020s has started to subside. Baldwin estimated that 5,000 new housing units would be built in 2026, less than half of what was finished two years ago. Khalil added that around 2,000 could be completed in 2027.<\/p>\n It takes time to create housing \u2014 apartment complexes aren\u2019t built overnight.<\/p>\n \u201cConstruction starts are way down,\u201d Khalil said. \u201cClearly, that\u2019s going to change the market between supply and demand.\u201d<\/p>\n Financing is not available in the same way there was a few years ago, Alanis said. \u201cRight now, with the capital markets, they\u2019re not as bullish on San Antonio,\u201d he said.<\/p>\n Khalil and Alanis said that high interest rates make it more expensive for developers to fund new projects. They also make it harder for current renters to move out, get mortgages and buy homes, further constricting the rental market.<\/p>\n There\u2019s also economic indicators that might make San Antonio less attractive to investors. Bankruptcies and unemployment are rising, according to data from the Bureau of Labor Statistics and U.S. Bankruptcy Court. People need good jobs to afford rent, Alanis pointed out.<\/p>\n But people are still coming to the area and moving into apartments. The vacancy rate has fallen from 16% at the beginning of the year to 14.9% in the third quarter of 2026, according to CoStar.<\/p>\n \u201cWe\u2019re absorbing those units, but there\u2019s still a lot of units to absorb. I think the timeframe for when we\u2019ll be back in imbalance is a year to 18 months,\u201d Alanis said.<\/p>\n When the market tightens up again, landlords will stop offering concessions and could start raising rents again. Khalil said that could happen late into 2027 and continue in early 2028.<\/p>\n What is being done?<\/p>\n \u201cWe\u2019re monitoring that very closely,\u201d said San Antonio City Councilwoman Sukh Kaur.<\/p>\n Kaur also serves on the board of the Housing Trust. This is part of the real estate cycle, she said, where supply and demand constantly dance around each other. She said council members are concerned about the housing supply issues on the horizon and are discussing a new housing bond in 2027, though the City of San Antonio might not have the bond capacity it had in 2022.<\/p>\n She suggested other strategies, including tax increment reinvestment zones, which could be used for affordable housing<\/a>. Those are designated parts of the city where property tax dollars are set aside for specific projects instead of going into the general fund.<\/p>\n Kaur was part of the Midtown TIRZ board<\/a> that recently decided to use those dollars for projects at Brackenridge Park, the San Antonio Zoo, the San Antonio Botanical Gardens and for a land purchase for the Spurs new stadium.<\/p>\n She added that the city was looking for opportunities to use federal grant funding for affordable housing projects.<\/p>\n \u201cThere are a lot of other ways we\u2019re continuing to work on as a city and with our partners,\u201d Kaur said. \u201cThat\u2019s one thing a majority of council does agree on when it comes to spending public dollars.\u201d<\/p>\n Alanis said the Housing Trust is trying to build more affordable housing in advance of any rental supply cliff. Even though capital is hard to come by, the nonprofit is being aggressive about acquiring land and working with city and VIA Metropolitan Transit officials on transit-oriented projects.<\/p>\n He wants to see smaller developments in urbanized areas that are close to existing infrastructure in jobs, also known as \u201cmissing middle\u201d housing.<\/p>\n In the long run, housing development in San Antonio is tied to private investment, which public officials and nonprofits have little control over, Alanis said. That\u2019s simply a part of living in a capitalist economy.<\/p>\n \u201cIf the demand isn\u2019t there, investors aren\u2019t going to come, lenders aren\u2019t going to lend,\u201d Alanis said. \u201cThat\u2019s how things are built in our world today.\u201d<\/p>\n Amber Esparza \/ San Antonio Report<\/p>\n Councilwoman Sukh Kaur (D1) raises a point about affordable housing in downtown San Antonio after an update on the city\u2019s sports and entertainment district during a city council meeting. <\/p>\n He does see ways to make neighborhoods more attractive to investors by improving transportation, growing jobs and economies and creating better educational opportunities. The Housing Trust will do its part to make sure that out-of-town investors and companies are building housing that benefits communities and neighborhoods, he added.<\/p>\n Solutions need to include San Antonio\u2019s lowest income residents, say Leticia Sanchez, a co-chair of the Historic Westside Residents Association, who works with families in her neighborhood who need housing.<\/p>\n Sanchez said, particularly if rents rise again. She\u2019s seen homelessness spike on the West Side because residents have nowhere they can afford.<\/p>\n \u201cThey\u2019ll be on the street. It\u2019s not a difficult assumption to make. It\u2019s already happening,\u201d she said.<\/p>\n Sanchez said the 2022 Affordable Housing Bond could have done more. There weren\u2019t enough units set aside for residents making 30% of the area median income<\/a>, about $24,200 each year for a family of two, she said.<\/p>\n Many are on fixed incomes between $800 and $1,200 per month if they\u2019re retired or disabled, she said. Others are working multiple, low-wage jobs. They can\u2019t afford San Antonio\u2019s median rent, which was around $1,300 a month, according to the most recent U.S. Census Bureau data<\/a>.<\/p>\n Sanchez said there\u2019s still a strong demand for public or subsidized housing, even in this renter friendly market.<\/p>\n An annual income of $40,000 is what\u2019s needed for stable housing, she said. More than a quarter of San Antonio households make less than that, according to the Census Bureau\u2019s data<\/a>.<\/p>\n \u201cThere\u2019s not enough apartments for our people and what they need,\u201d she said. \u201cIt\u2019s just getting worse and worse. That\u2019s how landlords establish rates, they\u2019re not looking at everyone who lives in San Antonio, they\u2019re just interested in their profits.\u201d<\/p>\n Sanchez was critical of incentives that went to developers who didn\u2019t include enough of those types of units.<\/p>\n \u201cWe\u2019ve given so much to these for-profit developers and we didn\u2019t get much in return,\u201d she said. \u201cThis is an issue that has a solution, but our leaders choose to listen to the wealthy and developers.\u201d<\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/us-tx\/wp-content\/uploads\/2026\/09\/1789461141_169_.jpeg\"\/)
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