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Loopholes in Texas Development Tax Break Break Affordable Housing Promises
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.