Public Facility Corporation Reform Passed in The Last Legislative Session. What Happens Now? 

Public Facility Corporation reform laws were approved in this year’s Texas Legislative session, but an affordable housing watchdog group says it falls short. It also grandfathers PFCs approved before the passage of House Bill 2071.

The new legislation provides affordability, accountability, and transparency. It also makes headway in curbing abuses and tenant protections, advocates say. 

It falls short in three critical areas, according to affordable housing supporters with Texas Housers: 

• PFC developments are still not required to reserve any units for renters earning 50 percent Area Median Income or below.
• Unlike acquisitions, new construction deals are not required to show that a specific percent of the tax savings has gone toward reducing rents in income-restricted units.
• Audits are conducted by auditors hired by property owners and only reviewed by the Texas Department of Housing & Community Affairs, rather than being conducted by TDHCA.

Three Public Facility Corporation Projects Approved Following Another Debate Over Whether They’re Good Deals

Plano and Plano ISD Take Legal Action on Public Facility Corporation Projects

Referencing a loss of about $12 million in property tax revenue, Plano and Plano ISD filed lawsuits last month questioning whether PFC developers are compliant with their pledges to provide affordable housing. 

Dallas Public Facility Corporation Projects Still Going Strong Despite City’s Lack of Outreach

The City of Plano entered 13 PFC deals this year through its housing authority that have provided 2,300 affordable units, according to reports. Roughly half the approved Plano PFC projects are marketed as luxury units and charge at least $1,800 a month in rent, CBS News Texas reported in November. 

“We’re really seeking to understand the projects and understand what they’ve actually done to fulfill the premise they were created under,” Plano City Manager Mark Israelson told CBS News. 

In Dallas, the Public Facility Corporation is overseen by a board appointed by City Council members. District 3 Councilman Zarin Gracey was the first PFC board chair, and Councilman Chad West has repeatedly pointed out that the incentive is necessary; otherwise, affordable housing isn’t getting built. 

Texas Sen. Paul Bettencourt, who authored House Bill 2071, told CandysDirt.com back in March that Dallas is not the problem when it comes to PFCs. The legislation was filed, he said, to rein in “out-of-control housing authorities” that were granted up to 99-year tax exemptions while only designating 10 percent of the units affordable. 

State Sen. Paul Bettencourt’s Bill Aims to Rein in ‘Out-of-Control’ Public Facility Corporation Projects

“Dallas is kind of late to the party on this,” Bettencourt said. “With all things, there are scenarios where it’s good. Dallas has a few projects, but the proliferation, and the abuse, have occurred in San Antonio and Houston. The City of Houston put out a horrid suite of these, including one project that had 66 percent market rates, not reduced rates, and one at 10 percent [Area Median Income]. That’s pathetic. They’re being used as property tax shelters.”

Lack of Oversight on Dallas Public Facility Corporation Projects 

Dallas Assistant Housing Director Kyle Hines served as the point person for PFC projects when the PFC board was formed and started reviewing projects. Once the projects were approved by the PFC board, Hines sat in the hot seat before the Dallas CIty Council as they asked tough questions about why the city was foregoing much-needed property tax revenue. 

Dallas City Council Approves Four New Housing Developments Under Public Facility Corporation Finance Structure

Hines left the City of Dallas in mid-2023 to become the first housing trust fund manager for Oakland County, Michigan. 

Director of Housing and Neighborhood Revitalization David Noguera left in September for a job with the U.S. Department of Housing and Urban Development in Miami. 

In a brief farewell speech at City Hall, Noguera pleaded with city staff to “continue to support the housing needs of those who call Dallas home.”

Albert Gonzalez is now the staff liaison for PFC projects. 

Thomas Buck, who oversees communications for the Lochwood Neighborhood Association, fought alongside his neighbors against one of the first Dallas PFC projects, the Standard Shoreline on Garland Road. Ojala Partners, now calling the project “The Hayden,” recently closed on the land and is expected to break ground in early 2024. 

All of the staffing upheaval has Buck asking a very important question:

“With so many people leaving City of Dallas Housing, do we really think we’ll get adequate oversight with Dallas PFCs?”