The Texas Legislature is considering new laws regarding “traveling Housing Finance Corporation (HFC) projects” that could harm Dallas’ tax base and undermine affordable housing programs.
While the Dallas Housing Finance Corporation helps fund affordable housing by offering tax-exempt bonds to construct and rehabilitate multifamily housing for low-income families, traveling HFCs have exploited loopholes. These organizations operate outside their home jurisdictions, often removing valuable properties from local tax rolls without sufficient oversight or public input, CandyDirt.com reported.
Critics argue that traveling HFCs, by bypassing local review, are eroding the tax base in Dallas. Potentially, over $1 billion in properties will be removed from tax rolls in the next five months. Since these deals often offer limited public benefits, they are accused of reducing funding for vital services like education and infrastructure.
While the Dallas Public Facility Corp. (PFC) works to create mixed-income housing with more transparency and accountability, traveling HFCs are seen as problematic because they exploit legal gaps to avoid the necessary scrutiny that comes with property tax exemptions.
The Texas Legislature has taken notice, with House Bill 21 and Senate Bill 867 seeking to reform HFC rules.
These bills aim to prevent the abuse of the system before more properties are removed from tax rolls. The Dallas City Council is working closely with stakeholders to ensure the new legislation addresses these issues. Proposed actions include raising public awareness, halting questionable transactions, and tightening bylaws for both HFC and PFC boards.