Loopholes in Texas Development Tax Break Break Affordable Housing Promises

A tax break approved by the Texas Legislature is delivering massive benefits to developers in the state, but advocates say the public isn't getting the promised return on investment.

2 minute read

September 17, 2020, 7:00 AM PDT

By James Brasuell @CasualBrasuell


Texas Apartment Construction

Trong Nguyen / Shutterstock

Eric Dexheimer shares news of new analysis from researchers at the University of Texas School of Law about the effect of a 2015 tax break approved, ostensibly, for affordable housing projects in Texas. The tax break was approved in a last minute amendment "onto a densely worded bill updating finance statutes" by Republican State Senator Craig Estes and promised to deliver a financial boost to affordable housing developers. 

"Since then, the one-sentence amendment has resulted in private developers receiving tens of millions of dollars in property tax breaks. It has saved them millions more in tax-free construction costs — all with scant benefit to the public," explains Dexheimer of the findings of the study released earlier this week.

In response to the quick popularity of the tax break for projects around the state, estimated by the report to deliver annual property tax breaks to apartment developers of close to $1 million per property on average, advocates are pressing back on the idea that the project is delivering promised low-income housing. 

[T]hanks in part to a series of loopholes buried in the paperwork, the so-called affordable housing created in exchange for the 2015 tax breaks often is as expensive as market-rate apartments, said Heather Way, a professor at the Austin law school and lead author of the study. “The public’s just not getting the return on its investment,” she said.

John Henneberger, co-director of the Texas Low-Income Housing Information Service, is quoted in the article raising the stakes on Way's statement. Henneberger says the tax break is a misuse of taxpayer funds.

Monday, September 14, 2020 in San Antonio Express-News

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Use Code 25for25 at checkout for 25% off an annual plan!

Interior of Place Versailles mall in Montreal, Canada.

Montreal Mall to Become 6,000 Housing Units

Place Versailles will be transformed into a mixed-use complex over the next 25 years.

May 22, 2025 - CBC

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

May 28, 2025 - Diana Ionescu

Rendering of California High-Speed Rail station with bullet train.

California High-Speed Rail's Plan to Right Itself

The railroad's new CEO thinks he can get the project back on track. The stars will need to align this summer.

May 19, 2025 - Benjamin Schneider

Nevada State Senate building.

Nevada Legislature Unanimously Passes Regional Rail Bill

If signed by the governor, the bill will create a task force aimed at developing a regional passenger rail system.

5 hours ago - KRNV News 4

Blue sidewalk curb cut painted with white accessibility symbol.

How Infrastructure Shapes Public Trust

A city engineer argues that planners must go beyond code compliance to ensure public infrastructure is truly accessible to all users.

6 hours ago - Governing

Protester at Echo Park Lake, Los Angeles holding sign that says "Housing is a human right"

Photos: In Over a Dozen Cities, Housing Activists Connect HUD Cuts and Local Issues

We share images from six of the cities around the country where members of three national organizing networks took action on May 20 to protest cuts to federal housing funding and lift up local solutions.

May 28 - Shelterforce Magazine