"These exemptions were not giveaways. Developers agreed to build and maintain affordable units; in return, they got predictable tax incentives that made the math work. HB 21 blows up that understanding. The new law imposes new, more stringent affordability mandates, annual audits, and most significantly forces every project to secure the blessing of local politicians. Even more troubling, the law applies retroactively to agreements made years ago. Some counties have already used it to revoke exemptions that developers and investors relied upon for existing developments."
"Retroactive policy changes undermine the bedrock principle of stable expectations. Housing is capital-intensive. Projects require financing that's predicated on clear, durable rules. When those rules shift after the fact, capital dries up, projects stall, and housing supply shrinks. The Texas Workforce Housing Coalition recently filed suit against the Bexar Appraisal District, arguing that HB 21's retroactivity violates basic constitutional protections and amounts to a war on Texas' affordable-housing developers."
House Bill 21 (HB 21), enacted in May, changes eligibility for property tax abatements for affordable housing partnerships in Texas. The law imposes stricter affordability requirements, mandates annual audits, and requires local political approval for every project. The law applies retroactively to prior agreements, prompting some counties to revoke existing exemptions and creating uncertainty for owners and renters. Financing for affordable developments depends on predictable tax incentives, and retroactive changes risk drying up capital, stalling projects, and reducing housing supply. The Texas Workforce Housing Coalition filed suit alleging unconstitutional retroactivity; affected tenants face potential instability and rent increases.
Read at www.housingwire.com
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