SUBJECT
title
Public Hearing and Introductory Ordinance amending the City of Laredo Municipal Housing Fund FY 2025-2026 Annual Budget by increasing revenues and expenditures in the amount of $65,800.00, establishing the rental rates and tenant policies for the Southern Hotel Apartments located at 1210 Matamoros St., and amending the Full Time Equivalent (FTE) position listing by adding one (1) Building Maintenance Mechanic.
body
PREVIOUS COUNCIL ACTION
On June 20, 2023, City Council approved the award of the rehabilitation contract to the lowest bidder Summit Building and Design, in the amount of $6,848,896.00.
BACKGROUND
The rehabilitation of an existing City-owned historic building, known as the Southern Hotel, to provide twenty-two (22) mixed-income affordable rental housing units. Of these units, thirteen (13) will be designated for low- to moderate-income households, while nine (9) units will be rented at market rate.
This project is funded through the Community Development Block Grant (CDBG), the Section 108 Loan Program, and the HOME Investment Partnerships Program, all provided by the U.S. Department of Housing and Urban Development (HUD). As such, the rental of these units must benefit low- to moderate-income households and maintain affordable rents in accordance with HOME Program rules and regulations.
The proposed initial rental rate per month is as follows:
HOME/CDBG
Units 11 - Studio's $675.00
2 - 1 Bedroom's $725.00
Market Rate 7 - Studio's $775.00
2- 1 Bedroom's $825.00
The security deposit will be equal to one month’s rent. Rental rates include water service. The rental rates are subject to change, as HOME Program rent limits are established annually by the U.S. Department of Housing and Urban Development.
VIVA LAREDO PLAN ALIGNMENT
Alignment Rating: Strong
Supporting goal(s)/policy(ies):
Goal 3.1 - Provide a Variety of Housing Options
“Encourage the development and preservation of a variety of housing types that are safe, accessible, and affordable for residents of all income levels.”
(Viva Laredo City of Laredo Comprehensive Plan, Housing Element, Goal 3.1, p. 3-6)
Relevance:
The rehabilitation of the Southern Hotel to create 22 mixed-income rental units, including 13 units reserved for low- to moderate-income households, directly expands the range of affordable housing options in the community. The project ensures both affordability and diversity of housing types within the downtown area.
Policy 3.1.2 - Support Affordable Housing Development
“Support public and private programs that increase the supply of affordable housing for low- and moderate-income households.”
(Viva Laredo City of Laredo Comprehensive Plan, Housing Element, Policy 3.1.2, p. 3-7)
Relevance:
The project utilizes HUD funding sources (CDBG, Section 108 Loan Program, and HOME Investment Partnerships Program) specifically intended to expand affordable housing supply. The proposed rental rates ($675-$725 for HOME units) ensure compliance with federal affordability requirements and align with the Plan’s emphasis on supporting programs that benefit low- and moderate-income residents.
Policy 3.3.1 - Encourage Rehabilitation of Existing Housing and Buildings
“Promote the rehabilitation and adaptive reuse of existing and historic structures to improve housing availability and preserve community character.”
(Viva Laredo City of Laredo Comprehensive Plan, Housing Element, Policy 3.3.1, p. 3-11)
Relevance:
The project rehabilitates the historic Southern Hotel building into residential apartments, preserving a historic structure while converting it into productive housing units. This aligns with the Plan’s emphasis on adaptive reuse and preservation of existing buildings to support housing supply and neighborhood revitalization.
Summary of alignment:
The proposed action to establish rental rates and tenant policies for the Southern Hotel Apartments demonstrates strong alignment with the Viva Laredo Comprehensive Plan. The project converts a City-owned historic building into 22 mixed-income rental units, directly advancing the Plan’s goals of expanding affordable housing opportunities and promoting housing diversity.
Key aspects supporting alignment include:
• Provision of affordable housing: Thirteen units are reserved for low- to moderate-income households at regulated HOME Program rent limits.
• Mixed-income housing model: Nine market-rate units help support financial sustainability while promoting economic diversity.
• Adaptive reuse of a historic structure: Rehabilitation of the Southern Hotel preserves historic character while increasing residential density in the downtown area.
• Leveraging federal housing programs: Funding through HUD programs (CDBG, Section 108, and HOME) supports local housing objectives and aligns with the Plan’s call for partnerships that expand affordable housing supply.
Overall, the agenda item advances broader planning themes within the Comprehensive Plan, including housing affordability, downtown revitalization, historic preservation, and equitable access to housing, thereby warranting a Strong level of alignment.
COMMITTEE RECOMMENDATION
NA
STAFF RECOMMENDATION
recommendation
To approve ordinance
end
Fiscal Impact
Fiscal Year: 2025-2026
Budgeted Y/N?: N
Source of Funds: Rental Income
Account #: 555-3965
Change Order: Exceeds 25% Y/N: NA
FINANCIAL IMPACT:
Funds to be appropriated as follows:
Annual Amended
Line Item Name Appropriation Amendment Budget
Revenues:
Southern Hotel Apartments 0 $65,800.00 $65,800.00
Expenses:
Southern Hotel Apartments 0 $65,800.00 $65,800.00