San Antonio City Council members unanimously approved changes to the city’s Tax Increment Financing (TIF) program policy on March 19, 2026, strengthening protections against residential displacement linked to development projects. The revisions, championed by District 4 Councilmember Edward Mungia, aim to address concerns that public funds intended for economic growth could inadvertently contribute to the city’s ongoing housing affordability crisis. The updated policy places greater emphasis on assessing and mitigating the potential for displacement, particularly in vulnerable neighborhoods.
The core of the changes centers on expanding the definition of “direct residential displacement” and requiring more thorough impact assessments. Previously, displacement was defined as the permanent relocation of households directly on a project site. The new language extends this definition to include households displaced by future phases of a project, or on property adjacent to the project site controlled by the developer. This broader scope is intended to prevent developers from circumventing the rules by phasing projects or acquiring surrounding land to displace residents indirectly. Understanding Tax Increment Financing (TIF) is crucial to understanding these changes.
“In the midst of a housing affordability crisis, the last thing our residents need is for displacement to occur at or near sites of development projects using public funds,” Councilmember Mungia stated. “We have a responsibility to ensure that we preserve and protect the current affordable housing stock in our city while balancing our commitment to supporting economic development projects.”
A Deeper Seem at the Policy Changes
The revisions approved by the council build upon a TIF policy initially adopted on December 15, 2022. The original policy stated that a Tax Increment Reinvestment Zone (TIRZ) or a TIF-funded project “shall not cause direct residential displacement,” defining it as the permanent relocation of occupied households on the project site. The updated policy expands this definition to include households displaced from contiguous properties under developer control. This change addresses a potential loophole where developers could displace residents on adjacent parcels to expand a project without technically violating the original policy.
Beyond the expanded definition, the new policy introduces two key requirements for proposed projects: a review of past displacement and a mandatory Displacement Impact Assessment (DIA). Projects will now be scrutinized for any direct residential displacement that occurred within the two years prior to the application date. This provision aims to prevent developers with a history of displacement from benefiting from TIF funding.
The DIA, a tool already utilized by the city, will be applied more consistently and with greater scrutiny. The assessment analyzes the vulnerability of surrounding neighborhoods to increased property values resulting from the project. The assessment area now includes a minimum of one-quarter mile radius from the project boundaries, encompassing all phases of the development. Projects scoring “Medium” or “High” risk on the DIA will be required to submit a detailed plan outlining efforts to mitigate potential displacement effects. Tax Increment Reinvestment Zones (TIRZ) are established by the City Council to capture incremental tax revenue for reinvestment.
Understanding Tax Increment Financing and TIRZs
Tax Increment Financing (TIF) is a tool used by cities to finance public improvements and stimulate economic development. As explained by the City of San Antonio, a Tax Increment Reinvestment Zone (TIRZ) is established by the City Council, freezing the existing tax base. As property values increase due to new development or redevelopment, the resulting incremental tax revenue – the difference between the original tax base and the new assessed value – is captured in a special TIRZ fund. This fund is then used to finance eligible improvements and support further development within the zone.
The city began utilizing TIF in 1998 and these zones have develop into a key component of San Antonio’s economic development strategy. However, concerns have grown in recent years about the potential for TIF-funded projects to exacerbate housing affordability issues and displace long-term residents. The changes approved on March 19th represent a direct response to those concerns.
The Role of District 4
Councilmember Mungia’s push for these changes stemmed from a dissatisfaction with the vagueness of the previous policy language. He argued that the existing policy did not adequately prioritize the prevention of displacement, particularly in light of the city’s escalating housing crisis. His advocacy led to briefings by City staff to the Planning and Community Development Committee in January and February of 2026, ultimately culminating in the policy revisions approved this week. The changes reflect a growing awareness among city leaders of the need to balance economic development with the preservation of affordable housing and the protection of vulnerable communities.
Councilmember Mungia expressed hope that these changes will empower the City Council to make more informed decisions about future development projects, ensuring they align with the intent of the TIF policy and prioritize the well-being of all San Antonio residents.
The next step in the process will be the implementation of the revised policy and the evaluation of its effectiveness in mitigating displacement. City staff will be responsible for developing guidelines for conducting Displacement Impact Assessments and monitoring the impact of TIF-funded projects on surrounding communities. The City Council is expected to review the policy’s effectiveness in one year.
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