San Antonio multifamily investment guide

Our Houston guide makes a good deal of the fact that the city has no zoning ordinance, that its codes do not address land use, and that what constrains a parcel there is a privately recorded deed restriction the City can nonetheless enforce. That is true, and it is unusual enough that a reader could reasonably come away thinking it says something about Texas. It does not. It says something about Houston.

Texas grants municipalities the zoning power at Section 211.003 of the Local Government Code, which we set out in that guide. Houston has simply never adopted zoning. San Antonio adopted it and built it out in detail.

The Unified Development Code, at Article III, establishes base zoning districts that divide the city into residential, commercial and industrial zones. For a multifamily investor the relevant part is that the multifamily districts do not merely permit apartments, they cap how many. The City’s own explanation of zoning districts describes MF-18 as permitting multi-family and various attached dwelling types "with a maximum density of 18 units per acre," MF-25 the same "with a maximum density of 25 units per acre," and MF-33 "with a maximum density of 33 units per acre."²

That is a materially different underwriting environment from Houston’s, and neither is straightforwardly better. In Houston you cannot learn what may be built beside you without a title search, but nothing caps what you can build on your own site if the deed restrictions permit it. In San Antonio the constraint is legible on a map, and it is also a hard ceiling. A site zoned MF-18 does not become an MF-33 site because the pro forma needs it to.

The practical consequences are three. First, the entitlement is the asset. The difference between MF-18 and MF-33 on the same acre is a difference in permitted units of almost two to one, and that difference is capitalized into land value. Second, a rezoning is a discretionary political process rather than a private negotiation, so any business plan that depends on one should be underwritten as a contingency and not as a step. Third, an existing building at a density above its current district may be legally nonconforming, which affects what you may rebuild after a casualty. We would establish the district, the permitted density and the conforming status of the existing improvements before anything else.

The Texas statutory material that applies across the state, the conditional rent control provision at Section 214.902, the disaster definition it points to, the equal and uniform appraisal remedy at Tax Code 42.26 and the deed restriction enforcement power at Section 212.153, is set out in full in the Houston guide and applies here without modification. We would rather link to it than restate it.²

• Texas grants the zoning power; Houston declined it and San Antonio took it.
• MF-18, MF-25 and MF-33 cap density at 18, 25 and 33 units per acre respectively.
• The density ceiling is capitalized into land value, so the entitlement is the asset.
• Rezoning is discretionary, so treat it as a contingency rather than a step.

Houston tells you nothing about your neighbor and nothing about your ceiling. San Antonio tells you both, and the ceiling is hard.

This is the figure we would want a sponsor to have thought about, because the usual story told about San Antonio does not match what the data currently says.

The military presence here is real and it is large. Bexar County is home to 146,110 veterans, about 6.8 percent of the county population on our arithmetic. Government employment across the metro is 183,100, which is 15.4 percent of all nonfarm jobs, a share exceeded in our coverage only by places built on a state capital or a federal installation.¹²

That concentration is normally the argument for San Antonio as a defensive market. Federal and military payrolls do not respond to the business cycle, they pay reliably, and military households turn over on a predictable rotation that an operator can plan around rather than fear.

The complication is that government employment fell 1.6 percent over the twelve months to July 2026. On 183,100 jobs that is a meaningful reduction in the metro’s single most stable payroll, and it is the largest contraction of any sector here in absolute terms. Education and health services, the other institutional anchor, also fell, by 0.9 percent on 180,000 jobs.¹

What grew instead were the cyclical sectors: professional and business services 4.9 percent on 160,900 jobs, trade, transportation and utilities 3.3 percent on the metro’s largest sector at 216,800, and other services 2.1 percent. Total nonfarm employment rose 0.9 percent to 1,192,200, with unemployment at 4.7 percent, down from 4.8 in June but still the second highest rate we have measured after Houston at 5.1.¹

So the mix is moving in an unhelpful direction even while the total rises. The market is becoming slightly more cyclical and slightly less defensive than its reputation. That does not undo the supply argument in the previous section, but it does mean the defensive case for San Antonio should be made on the basis of the veteran population and the installations themselves rather than on the trajectory of the government payroll line, which is currently negative.

• 146,110 veterans, about 6.8 percent of the county population.²
• Government is 15.4 percent of metro employment.¹
• Government employment fell 1.6 percent and education and health 0.9 percent.¹
• The sectors that grew are the cyclical ones.