Who are the winners in Houston’s affordable housing market? The numbers suggest it’s not renters

Landlords are saving millions through a state program, but not passing all those savings to their tenants.

By Sarah AschApril 2, 2025 12:49 pm,

On paper, the Houston Housing Authority has been producing affordable housing at a breakneck speed, providing 17,000 apartment units in eight years.

The public agency says it’s accomplished this by exempting apartment complexes from property taxes in exchange for making some units affordable.

But is the system really in the best interest of renters? And who benefits from the millions in tax savings each year?

The Houston Chronicle looked into these questions, and investigative reporter Yilun Cheng said the biggest winner in this system is the landlords.

“My colleagues and I looked into the winners and losers of Houston’s affordable housing system, specifically the use of a state program called Public Facility Corporations, or PFCs,” she said. “The owners of a large apartment complex are saving around a million dollars in property taxes every year.

“And on top of that, lawyers, consultants and other third-party service providers are also making huge profits from these deals. Collectively, they made at least $100 million from these projects.”

On the flip side, Cheng said this system does not really benefit the renters that it is designed to help — especially people with very low incomes.

“That’s because many of the so-called affordable units are not actually affordable to low-income families. They’re priced more for middle-class tenants, people who can afford around $1,500 for a one-bedroom,” she said. “That’s not really what you’d think of when you hear affordable housing. It’s also not part of the housing market where Houston has the biggest shortage.

“And the other losers are local taxing entities because we’re taking over a hundred apartment complexes off the tax road just in Houston. That hits a wide range of government agencies.”

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In their reporting, Cheng and her colleagues looked at the financial closing documents for over 70 Public Facility Corporation deals made by the Houston Housing Authority.

“That showed us where the money’s going, how much attorneys, consultants, and the housing authority itself were making on each deal,” she said. “And we also got rent rolls for some of the largest PFC complexes in Houston and looked at what tenants were actually being charged. And that allows us to see if the rents are actually lower than market rates.

“And finally, we used property tax data from Harris County to estimate how much the landlords saved in taxes. And we compared that to what they gave up in rent. And in many cases, we found they are saving hundreds of thousands of dollars or more each year.”

Cheng said some changes have already been made to this system to try and redirect some more of the benefit to renters.

“In 2023, state lawmakers passed a reform bill that required stricter affordability rules and some basic accountability measures,” she said. “And Houston officials also recently started requiring some units in each new project to be affordable to extremely low-income families. But here’s the issue: Many of the new rules only apply to new projects – so not a hundred or so deals that were already approved.”

Cheng said some developers have also switched to an almost identical program called housing finance corporations, which allows them to carry out basically the same deals with fewer restrictions.

“Right now, lawmakers like State Senator Paul Bettencourt and Representative Gary Gates are pushing for new legislation to close some of these loopholes,” she said. “So we’ll have to see what happens next.”

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