A controversial tax break program that promised affordable housing but mostly padded developers’ pockets is on ice in Houston.
The Houston Housing Authority halted new deals under the program in which the biggest beneficiaries have been landlords and political insiders, not low-income renters, the Houston Chronicle reported.
The authority’s CEO Jamie Bryant said the agency has stopped accepting proposals tied to public facility corporation projects, which allow apartment developers to avoid property taxes in exchange for setting aside half the units as affordable.
Bryant, who took over in February after Mayor John Whitmire overhauled the agency’s board, said he has rejected dozens of recent proposals, citing poor public returns.
“We are providing a dollar’s worth of tax exemption to a developer, but in return we’re getting maybe 20 cents worth of additional rent subsidy in affordability,” Bryant said.
The housing authority delivered 17,000 apartment units over eight years under its aggressive use of PFCs, but most of those projects were priced for middle-income tenants, not the lowest-income households the program was intended to serve. Some landlords secured tax exemptions by buying existing modest-rent properties without significantly reducing rents.
Texas lawmakers tightened the rules for PFCs last year, but many deals were grandfathered in under the old looser standards. Bryant said the agency may revisit them in the future under tighter guidelines but, for now, it’s closing the door.
The pause marks a sharp pivot for an agency that once championed PFCs as a fast track to affordable housing but now faces a reckoning over whether the model served the public as intended.
The freeze applies to deals made through Chapter 392, a similar loophole-rich program. Bryant said he has already fielded calls from frustrated developers and brokers but stressed that public mission, not private profit, will guide future housing efforts.
The agency’s shakeup follows months of leadership turmoil and reports of mismanagement.
Former CEO David Northern resigned in November after the board launched an investigation into financial mismanagement. Auditors found shadowy deficiencies in the Houston Housing Authority’s bookkeeping and oversight of its federal housing voucher program; 35 out of 40 reviewed housing choice voucher files lacked required paperwork for annual recertification, risking inaccurate subsidy payments.
Bryant, a former executive at real estate development and investment firm Midway, said he plans to improve financial oversight and hire a new CFO.
City officials including Council Member Julian Ramirez have pushed for reforms, warning that past deals under the arrangement often produced little true affordability despite million-dollar tax breaks.
— Judah Duke
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