SAN ANGELO CITY COUNCIL
The San Angelo City Council on Tuesday discussed potential ways the city could assist developers with infrastructure costs in new residential subdivisions, as rising expenses continue to slow housing development across the area.
Public Works Executive Director Shane Kelton presented ideas to the council, focusing on how the city might share costs associated with “oversized infrastructure” — such as larger water and sewer lines or expanded roadways — that are often required to accommodate future growth beyond the boundaries of new subdivisions.
“We’ve had some developers that have recently approached the city and [are] looking for some assistance in some of the oversized infrastructure that we ask them to place within their subdivisions as they are building them out,” Kelton said.
“A lot of times we ask these developers for increased sewer sizes, water pipe sizes, things like that … because we’re looking at what’s going to happen in the future … we need to make sure that we have everything sized correctly so that we can handle future expansion as we move forward.”
Kelton said the rising costs of infrastructure since 2020 have significantly impacted developers and contributed to stalled projects.
“Ever since 2020, we have definitely seen … just a staggering increase in the cost of putting in these utilities and streets and the infrastructure necessary to move forward,” he said. “We want to assist and help move development forward and continue development, especially in some of these outlying areas on the edge.”
To address those challenges, Kelton proposed a cost-recovery model where the city paid for the initial infrastructure, with reimbursements collected as the lots are sold.
“One of the things that we have come up with … is to work with the developers and [the] city would put in the oversized infrastructure … whether that’s a voluntary assessment type situation or a developer’s agreement, some kind of contractual arrangement where we would put the infrastructure in up front, but as the lots sold … the city would be reimbursed those costs over time,” Kelton said.
He added that the idea has been shared with the city attorney’s office and that developers have been receptive to it.
Mayor Tom Thompson expressed optimism about the proposal.
“There is a lot of hope and there’s a lot of optimism with being able to create something that helps our builders and the HBA go through and help us gain more housing,” Mayor Thompson said. “I campaign on the fact that we don’t need 50 or 100 more homes, we need 200 more homes. And the point of it is we need to do whatever we can to help be fiscally responsible to our citizens, but also help builders, because every time one of those goes in and it gets completed, that’s $3 or $4 thousand dollars [added] to the tax roll.”
“We have to let our short-term obstacles not get in the way of our long-term objective of creating more housing,” he added.
During public comment, developers voiced support for the city’s willingness to explore assistance options.
“We’re having great conversations with staff and we feel like it’s going in a good, positive direction,” said Russell Gully, managing partner with SKG Engineering.
Eric von Rosenburg of von Rosenburg Custom Homes said he supports both proposed approaches — a developer’s agreement or a work-assistance loan — and emphasized the importance of higher-density, affordable housing.
“There’s several ways to do it—the developer’s agreement and basically a work assistant loan from the city that would be paid back over time—both are great ideas,” von Rosenburg said. “As a developer, we’re open to both because we do want to do smaller lots, higher density—we know that both of those will give us what we ultimately need in this town, and that’s affordable housing.”
No action was taken on the item, and council members are expected to revisit the topic at a future meeting once further details are worked out.
