The San Marcos City Council voted 6-1 to approve two conditional use permit requests at its April 15 meeting for a proposed seven-story student housing complex across from the downtown H-E-B.

The permits, submitted by Illinois-based developer Next Chapter Properties, allow the building to exceed the current five-story height limit and officially designate the project as purpose-built student housing, which is housing designed, marketed or used specifically by college students.

The Planning and Zoning Commission recommended denial on March 25, which required both permits to gain approval from at least six of the seven council members to pass.

In its initial vote, the council voted 4-3 to deny the permits.

However, after negotiating with the developers for additional requirements, including extending a restriction on selling the property to a tax-exempt entity, such as Texas State University, from seven years to 12 years, the council instead approved the permits.

Councilmember Amanda Rodriguez was the only member to vote against the final approval.

“Our taxpayers lose out when these buildings get sold, and this has happened time and time again,” Rodriguez said at the April 15 meeting. “People’s perception in this city is that the university bleeds us dry, and that we put so much [in], but it’s not a reciprocal relationship. I just want to feel more comfortable about this, and I don’t.”

Kelly Quinn, NCP chief executive officer, said at the April 15 meeting the company has met with leadership from the city and university as well as community leaders and advocates.

“I understand that you have worked with developers in the past that have been less than reputable,” Quinn said at the April 15 meeting. “We do not operate that way, and I would appreciate it if what people did in the past…doesn’t affect the way you look at me or how I do business.”

Council discussed numerous amendments to the permits, including adding a screen for the pool, requiring posting the lease publicly on the apartment’s website and offering both individual and conventional leases.

Councilmember Matthew Mendoza said at the April 15 meeting he would prefer to see students housed near campus and the downtown areas as opposed to in local neighborhoods, particularly as local residents are continually facing increases in rental homes and short-term rentals.

“I am a huge single-family neighborhood preservationist,” Mendoza said at the April 15 meeting. “It’s not the developers’ fault, [and] it’s not even the students’ fault. It’s the environment we’re in, but we’re losing generational wealth in those neighborhoods…This is another way to keep 600 people downtown.”

The development site, located in the CD-5D (Character District-5 Downtown) zone, allows multi-family housing up to five stories under the current development code.

Shannon Mattingly, a director of land use and entitlements at the Drenner Group, a real estate law firm that concentrates on land-use projects, said at the April 15 meeting that additional height was necessary to accommodate structured parking beneath the building.

Quinn said at the April 15 meeting that while they would offer both kinds of leases, she has found students typically prefer rent-by-the-bed to a conventional lease, where the rent is tied to the unit.

Although the developers previously described the rent as affordable if it were to be converted to purpose-built student housing on March 25, Mattingly said at the April 15 meeting that they “have not used the word affordable, [but they] like to think that it would be somewhat attainable for students.”

City planning staff previously recommended denial of the story increase and remained neutral on the student housing request, citing conflicts with the city’s development code.

Jared Chumsae, San Marcos resident and Tenant Advocacy Group (TAG) volunteer, said at the April 15 meeting TAG wanted the development to remain multifamily, not student purpose built housing.

“Right now, [developers are] targeting students with some predatory leasing practices that we’ve opposed since TAG has been formed,” Chumsae said at the April 15 meeting. “Staff mentioned during the visioning session that not a single developer has opted to go for city incentives to construct affordable housing…why opt for affordable [housing] when developers realize that they can just ask city council to build more high rises that only cater to trying to maximize profit?”

Darla Munoz, San Marcos resident, said at the April 15 meeting she is against the ongoing pattern of downtown high-rise housing developments, such as the McLain Project that city council approved in April 2024, which Mattingly was also the representative for.

“Exactly a year ago, we were here fighting the development on Lindsey Street, which Shannon Mattingly was a representative for the out-of-town developer, and she pretty much got what he wanted,” Munoz said at the April 15 meeting. “We warned you that dominoes would start to fall, and so here we are now.”

In a letter to Amanda Hernandez, San Marcos planning director, Mattingly referenced a Texas State University housing demand study and public comments by Bill Mattera, Texas State executive director of residential and housing (DHRL), that said San Marcos was short approximately 10,000 to 12,000 off-campus beds.

However, The Star filed a public information request for a copy of this study and received a housing presentation by consulting group Brailsford and Dunslavey, and there was no information present related to the 10,000 to 12,000 figure.

The study did reference housing demand numbers for 2022-2033, which show the university currently has a current gap of nearly 1,250 beds, primarily upper division, and a gap of approximately 2,400 beds by 2033 for all class levels.

According to the meeting packet, which contains an unspecified study and data, it states the “shortage will continue to grow as TXST projects another 5,846 additional students by 2027, when [the development] is expected to open.”

This data appears to contradict Texas State’s recently released 2025–2035 Campus Master Plan, which was presented to San Marcos City Council on Dec. 3.

According to the presentation, while the university anticipates enrollment will grow to 50,000 students, the majority of that growth is projected to occur at its Round Rock campus—not in San Marcos.

“I think we have a pretty good handle of the challenges that San Marcos faces as well as its needs,” Quinn said at the April 15 meeting. “One challenge I can’t help you with is reducing the amount of students in San Marcos. The students are here, and it will continue to grow.”

With the project’s approval, the developers will complete a traffic impact analysis study and work with the city to determine what road infrastructure changes will need to be made near the site.

“This is the second developer that we’ve engaged in this type of back and forth with,” Councilmember Alyssa Garza said at the April 15 meeting. “I think it shows that we are starting to raise the bar and be more intentional with how we grow as a city.”