Houston Housing Authority CEO Halts Controversial Developer Tax Breaks
The new CEO of the Houston Housing Authority halted the agency's use of controversial tax breaks for landlords that were intended to spur affordable housing development.
Jamie Bryant, who took on the role in February, said HHA will immediately stop considering new public facility corporation and Chapter 392 projects, The Houston Chronicle reported.
The PFC program, created in 2015, grants a 100% property and sales tax exemption for apartment owners that set aside half of their units for residents making less than 80% of the area median income.
Legislators tightened the rules for PFCs in 2023 after allegations of rampant abuse, but some argued the reform did not go far enough. Another nearly identical program called Chapter 392 is also being used for similar tax breaks, according to the Chronicle.
State lawmakers have again filed bills this legislative session in an attempt to reign in what they call abuses of the system.
The programs give Houston developers much larger tax breaks than what they lose on rent for making units affordable, according to a Houston Chronicle analysis. Only 1% of Houston units in the programs are set aside for extremely low-income renters.
Some, including council member Julian Ramirez, argue that these programs reward development that the market was already creating, meaning it’s not spurring new affordable housing. Landlords also bought existing complexes that already had modest rents, then used the programs to avoid paying taxes without substantially lowering rental rates, according to the analysis.
One apartment complex in Houston saved $1.38M in taxes last year while only missing out on $405K in rent.
“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 told the Chronicle.
Bryant stepped into the CEO role after former president and CEO David Northern’s November resignation amid an investigation into his duties, including how Northern was awarding contracts and approving payments.
Bryant has extensive commercial real estate experience, most recently as co-CEO of Parkway. Prior to that, he was president and chief operating officer of Midway, the developer of the CityCentre mixed-use project.
