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

Young Professional

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 and Environmental 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 and Environmental Planner

Get top-rated, practical training for planners

"Planetizen federal action tracker" logo superimposed over black and white image of US Capitol dome.

Planetizen Federal Action Tracker

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

October 28, 2026 - Zachary Whalen

A car drives through a puddle, making a large splash. Rain pours down.

California plans to bury El Niño’s downpour

If the state plays its cards right, it may be able to store a billion acre-feet of El Niño’s water in aquifers.

October 28, 2026 - Grist

Lake Powell with much of the water evaporated.

Desperate measures: Advocates weigh draining Lake Powell to fill Colorado River

Draining the reservoir could reduce evaporation losses by a couple hundred thousand acre-feet.

October 30, 2026 - Yale Environment 360

A group of officials stand in a patch of dirt holding golden shovels and white hardhats.

California city breaks ground on transit connector

The project includes three mobility hubs and a pedestrian bridge.

4 hours ago - Mass Transit

People walking by a brick school in Cambridge.

After public outcry, Massachusetts city releases housing development tracker

Cambridge’s tracker currently shows 250 housing projects in various stages of development.

5 hours ago - Smart Cities Dive

A rendering of the park, with green grass and a bass sculpture that looks like several tall arches in a row.

40 years after approval, Chicago breaks ground on new park

The park honors Jean Baptiste Point du Sable, the city’s first permanent non-native settler.

6 hours ago - Block Club Chicago