A 2015 tax break for nonprofit groups trying to boost the number of affordable housing units in Texas, has had the opposite result, a new University of Texas Law School study reveals.
As reported by the Houston Chronicle, the study shows that private developers are using it to earn a 100% property tax break. And those units they’re building are not affordable for most low-income renters.
Chronicle reporter Eric Dexheimer told the Standard a last minute amendment to a bill raised only a single question at the time, about who would benefit, nonprofits or private developers.
“The lawmakers assembled there were assured that the tax breaks would be for nonprofits only, but it turned out to be not the case,” Dexheimer said.
These 100% tax breaks mean that the entire value of the land and the improvements on it are not taxed. “And in addition to that, if you’re building a new project that construction materials don’t have sales tax on them either,” he said.
The result is that a lot of units were built for people who were at the top of what most consider to be low-income – those people making $60,000 a year. But the tax break did not result in units for most low-income renters, those making under that amount.
“There is a great need for units, for people earning what’s called 60% of the average median income and below,” Dexheimer said.