Fredericksburg City Council on a mid‑July agenda meeting voted to table a proposed cooperation agreement that would have allowed the Texas Housing Foundation (a nonprofit housing developer) to develop a 150‑unit income‑restricted apartment community on 11.37 acres at the northwest corner of Friendship Lane and South Eagle Street.

Developers presented the project as a 100 percent income‑restricted property with units targeted at households earning 50, 60 and 70 percent of area median income (AMI). Jonathan Larson, vice president of development for Lone Star Development Partners, described the project as a garden‑style, two‑story, Class‑A product with 48 one‑bedroom, 56 two‑bedroom and 48 three‑bedroom units and community amenities including a pool, playground and clubhouse. Allison Smith, president and CEO of the Texas Housing Foundation, said the organization operates roughly 6,000 units statewide and that the developer transitioned the project from market‑rate to an affordable product structure in response to local feedback.

The cooperation agreement before council would enable the Texas Housing Foundation to hold title and use its statutory authority to deliver tax‑exempt multifamily housing controlled by the nonprofit. Staff noted the previously approved site plan and entitlements for a market‑rate project had expired and would require renewed site‑plan approvals and Planning & Zoning review if the council approves a cooperation agreement.

Public comment was substantial and mixed. Several residents and longtime local leaders urged deeper analysis of fiscal impacts to the city, county and Fredericksburg Independent School District, and asked the council to arrange a joint conversation with those taxing entities before approving tax‑exempt status. Charlie Kinney and others said city and county taxpayers ultimately bear the revenue effects of tax exemptions and asked for a local fiscal impact assessment. Other commenters highlighted workforce housing shortages and urged the council to pursue affordable housing partnerships.

Council members said they wanted more outreach to the school district and county and asked the developer for a clearer economic benefit analysis. Several members praised the Texas Housing Foundation’s track record but said they did not yet have sufficient information about long‑term tax implications for local taxing jurisdictions.

The council voted to table the cooperation agreement and requested staff arrange discussions with county and school officials and that the developer provide additional fiscal and market analysis as part of the next presentation. Tabling leaves the developer able to return with the requested materials; no cooperation agreement or exemption was granted at this meeting.