Will Gov. Rick Perry’s little-noted veto of legislation making procedural reforms at the Texas Department of Housing and Community Affairs continue the ghetto-ization of low-income housing being built in Texas? That’s the premise of a series of thoughtful and intriguing posts by the dedicated folks at the Texas Low Income Housing Information Service.
The background: In the world of affordable housing financed by federal tax credits — which is to say most of the low-income housing being built in Texas and the country — critics complain that support from nearby neighborhood organizations and elected officials has assumed an out-sized importance. Within the competitive point system the Texas housing agency uses to award hundreds of millions of dollars worth of the tax credits for new projects, a letter of support from neighbors is worth more points than any other criteria. A letter from an elected state representatives is worth slightly less.
Either, however, is so valuable that it can make an entire project. Conversely, a letter of neighborhood opposition — which subtracts points from a developer’s application — can kill a project.
“This might appear to be representative democracy at work,” TxLIHIS co-director John Henneberger wrote in one recent blog post. “But the process has produced some of the most serious public corruption in recent state history.”
That’s because “a single State Senator or House member or a single city council member has enormous power over the competitive application process for a program annually worth hundreds of millions of dollars,” Henneberger added.
The financial incentives have also caused some applicants to game the system. For example, last October, I wrote about how some developers appeared to form new neighborhood associations for the express purpose of generating the valuable letter of support.
Another consequence is that it has become difficult to build new affordable housing projects in more affluent neighborhoods that have vocal neighborhood associations, or whose elected representatives reflexively oppose such developments because of fears about increased crime and lower property values. That, in turn, advocates say, has forced developers to build either in the middle of nowhere, where no neighbors exist to complain; or in areas — typically poor and minority — that have already allowed low-income projects, with the effect of further concentrating low-income housing.
According to this TxLIHIS post, for example, the latest competition for the federal tax credits produced more than a dozen letters of opposition from elected state representatives and senators that, by killing certain projects, “had the effect of moving development to lower income, higher poverty areas of the state.”
In its evaluation of TDHCA prior to the recent legislative session, the Sunset Advisory Commission recommended reforms that would blunt much of the NIMBY-ism permitted by assigning community and politician letters so much importance. In that spirit, the initial bill to continue funding the housing agency removed most of the points that are now awarded for the neighborhood association’s opinion, assigning them instead to a letter from the nearest local elected body — city council or commissioners’ court — that would be voted on in open session. The letter from an elected state lawmaker was taken out of the scoring system entirely.
After some legislative back and forth during this spring’s session, lawmakers approved a bill with most of the Sunset reforms intact. Yet on June 17, Perry vetoed it. Ten days later, a conference committee substituted language in SB 1 - a budget-related bill - that continues the housing agency for two more years but which contains none of the above-referenced reforms.
Why the veto? In his proclamation, the governor primarily cited “a new layer of bureaucracy” the bill would have created, but did not address the low-income housing tax credit program.
“Who knows what lurks in the mind of the governor,” Henneberger said.