Two Texas counties more than 300 miles away from each other are engaged in a legal fight over tax breaks for affordable housing.
The housing finance corporation for Cameron County, along the southern border, plans to buy two properties in Williamson County, outside Austin. Counties in Texas can set up housing finance corporations to encourage developers to build more affordable housing through tax breaks.
Williamson County officials have filed a lawsuit to prevent the deals from going through. Officials there claim that the Cameron County authority is exploiting a loophole with developers, and depriving Williamson County of its rightful tax dollars.
Kailey Hunt, who covers Williamson County for KUT News, spoke to Texas Standard about the conflict. Listen to the interview above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: What can you tell us about the properties that the Cameron County Housing Corporation plan to buy in Williamson County?
Kailey Hunt: Well, we know that last month, the Cameron County Housing Finance Corporation purchased a brand new multifamily development known as the Siena Round Rock Apartments in Williamson County. And we also know that the corporation has plans to buy another similar apartment complex just down the road, actually, from the Siena Round Rock apartments called The Sommery.
And what’s important about those locations is that in addition to being in Williamson County, both of these apartment complexes are also located in a local municipal utility district, school district and emergency services district. So local officials are worried that not only the county, but also these other local governmental entities, will lose out on their hard-earned tax dollars if, in fact, these properties are removed from the tax rolls.
Well, tell us more about how officials in Williamson County have responded.
So officials in Williamson County held a big press conference last week where they announced details of the lawsuit. The county judge, Bill Gravell [was] there, as well as one of the commissioners – where both of the apartment complexes are located within his precinct. They also had the local independent school district superintendent there, as well as emergency services leaders to show collective support for this lawsuit.
Judge Bill Gravell called it one of the most egregious acts in his time in office. All of the elected officials here in Williamson County have essentially accused the Cameron County Housing Finance Corporation of stealing the tax dollars away from the local school children. So not a great reaction here in Williamson County.
On top of that, Williamson County officials say that nobody from the Cameron County Housing Finance Corporation or Cameron County – the jurisdiction responsible for creating that housing corporation back in 1979 – no one from those organizations actually reached out to Williamson County ahead of these deals being made. So they were upset about that as well.
Well, I understand there’s another court hearing on this matter scheduled for later this week. What might happen then?
That’s right. So last week, a judge actually granted Williamson County a temporary restraining order against the Cameron County Housing Finance Corporation, essentially halting any sort of deals or efforts that the corporation had to remove those two apartment complexes in Williamson County from the tax rolls.
So this court hearing, scheduled for Thursday, will be when the judge reevaluates that temporary restraining order and will decide if a more permanent injunction should be put into place, effectively halting any sort of deals from being made between the two entities while the lawsuit proceeds forward.
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Are there any efforts to address this issue in the Legislature?
Yes. So two Republicans from the Houston area – state Rep. Gary Gates and state Sen. Paul Bettencourt – they have each filed identical bills in their respective chambers, essentially looking to amend the Texas Housing Finance Corporation Act, which is where this issue actually originates.
Right now, there’s a loophole in the law that allows these housing finance corporations to partner with and grant property tax exemptions to developers outside where they were created.
So, Gates and Bettencourt, they want to close this loophole by creating boundaries for where these corporations, like the one in Cameron County, can actually legally operate under their proposed legislation. The corporations would only be allowed to operate in the local jurisdiction where they were created.
