If you read one thing: In 2019, Texas lawmakers granted a small group of Central Texas businessmen permission to form their own government to develop agricultural land near the Austin airport. Now, the tiny district is granting tens of millions of dollars in tax breaks to private developers across the state.
How is this possible? The SH130 Municipal Management District No. 1 is pushing the limits of an obscure 2015 law that allowed the creation of public facility corporations, or PFCs, which can acquire title to development projects that pledge to include some affordable apartments.
Then, the PFC leases the property back to the developer to build, manage and profit from for up to 99 years. Because on paper it's owned by a public entity, the property pays no property taxes.
Most PFCs are created by a local housing authority or trust whose members are appointed by public officials. The SH130 district, which is, again, run by businessmen, created its own PFC and profits off the deals.
The SH130 district says it is working within the law, providing a valuable public benefit that traditional housing agencies couldn't, and creating desperately needed housing for priced-out middle class professionals.
Spokesman Aundre Dukes: "No one questions that this housing crisis exists, but no authority appears to have the resources to move expeditiously toward a sustainable solution."
Sen. Paul Bettencourt of Houston said the SH130 district is "the poster child" of all that is wrong with the new affordable housing tax break, using its 1,100-acre piece of land to create valuable tax breaks in far away jurisdictions, whose own taxpayers must make up the difference.
In exchange for arranging tax deals the SH130 district's PFC collects 10 to 15 percent of each developer's property tax savings, worth millions of dollars over the lifespan of each deal, plus hundreds of thousands of dollars in fees. It all flows into the back office of the small Travis County special district.
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