Houston Mayor Rebukes Housing Authority on Tax Break Deals

Houston Mayor Sylvester Turner ordered the city’s Housing Authority to stop work on tax break deals with affordable housing developments, which the mayor previously ordered a pause on earlier this year.

According to an article by R.A. Schuetz in the Houston Chronicle, “At question are deals in which housing authorities can remove apartment complexes from the tax rolls in exchange for making a portion of their units affordable.” The ability for the housing authority to make such deals, which involve what are known as public facility corporations, was created by a 2015 state law. “Since then, use of the law has increased dramatically — the 10 deals that received final approvals Tuesday represented a 13 percent increase in the number of deals Houston since they became legal.” After they came under scrutiny for potentially removing tax revenue while still building mostly market-rate units, the mayor ordered the HHA to put a pause on approving any new deals. 

While the HHA says the deals have facilitated the creation of thousands of affordable units in Houston, policymakers are questioning their value, saying that the deals cost the state million in property taxes. Schuetz points out that “Voters have capped the property tax revenue the city can collect — and the city hits that cap every year, usually forcing it to reduce its property tax rate.” However, the impact would be felt directly by municipal utility districts and, “For Houston’s taxes, owners without the tax break make up the difference.”