The City of San Antonio has taken a housing-first policy Downtown for a reason; a critical mass of residents spurs retail and then office. But building multifamily Downtown is very challenging. Panelists at Bisnow’s San Antonio Multifamily event this week delved into it.

City of San Antonio director Lori Houston is one of the people most involved in bringing housing Downtown, and she’s doing it by helping developers overcome the serious barriers to building multifamily there. Downtown is really a hotel market, she told the crowd—land costs around $200/SF along the river. (In comparison, you can buy in the Pearl or Southtown for $80/SF.) That just doesn’t pencil for apartments, especially when you have to build structured parking. This June, the city may amend its incentives Downtown upward to help offset those costs even more.

Pictured is our Downtown panel: Hemisfair CEO Andres Andujar, Lori, Lynd Co EVP Madison Marceau, IPA executive director Will Balthrope and NRP Group SVP Dan Markson.

Financing isn’t the only challenge, Dan (snapped with Lynd CEO Mike Lynd) says. Assemblages are very complicated Downtown. You can’t always get a whole block, and if there’s a house holding out or a historic structure that can’t be changed, you need to work around it and create a transition from that to your new property. Although it adds complications, he sees it as a plus because it adds flavor and character to the city.

Dan’s working on the Crockett Street Urban Lofts in Sunset Station with an emphasis on providing housing for service workers. The east end is packed with them, Dan says, with River City Mall, the convention center and so many hotels around. And although there are incentives targeting tax credit housing (20% to 30% of area median income—AMI), there’s a huge base of workers around 80% of AMI and few projects serving them because the capital stack is very tricky. Half the 260 units at Crockett Street will be for this group.

Hemisfair’s housing will also target this workforce; Andres says any projects built there have to dedicate 10% to 50% of units to workers earning between 50% and 110% of AMI. There will be about 2,000 units in the project overall, starting with AREA Real Estate’s Acequia Lofts breaking ground next spring.

Jobs and housing projects alike are trying to appeal to Millennials, Madison says. (We snapped him, right, with COM CAPP’s EJ Bartolomew.) His suggestion: Go for the intangibles. Millennials are driven by social incentive and experiences, so you want to create atmosphere and community activities or be near activated public space. Madison says one big challenge Downtown (regardless of age group) is the price and complications of parking. The city’s working on a fix to the latter, Lori says; it has an RFI out for a company that would pick up your car wherever you asked and bring it back to you wherever you asked, using an app.