Relating to the requirements for applications for low income housing tax credits for developments financed through the private activity bond program.
If enacted, HB 2856 will notably impact low-income housing development in Texas by emphasizing local political influence over state-sponsored funding. The bill could lead to a chilling effect on potential housing projects, as developers might find it difficult to secure credits if they encounter opposition from a local representative. This provision alters the balance of power in the application process, with local politics potentially defining the viability of affordable housing projects more than merit-based assessments by the TDHCA. It also applies specifically to applications submitted in line with the upcoming 2024 qualified allocation plan, establishing a timeline for its implementation.
House Bill 2856 addresses the application requirements for low-income housing tax credits for developments financed through the private activity bond program. A significant aspect of the bill is the inclusion of a provision that allows a state representative to effectively veto a housing tax credit application by submitting a letter opposing the project. This new requirement mandates that applicants notify both the state representative and local governing bodies of their intent to apply, ensuring political oversight on housing developments before any submissions are made to the Texas Department of Housing and Community Affairs (TDHCA).
The sentiment surrounding HB 2856 is sharply divided. Proponents argue that greater local control through the inclusion of state representatives ensures that developments align with community interests and concerns. However, critics, including housing advocacy groups, view the bill as an unnecessary hurdles for affordable housing, and an example of political overreach jeopardizing the urgent need for housing in low-income areas. They argue that this could exacerbate the housing crisis by limiting the availability of tax credits necessary for developing affordable housing units.
Controversy mainly stems from the proposed authority of an individual legislator to reject housing projects, which some argue could lead to biased decisions influenced by political motivations rather than community needs. Opponents of the bill express that this could stifle new supply of affordable housing and create a system where housing development is subject to the whims of individual state representatives, thereby undermining the established processes that have previously prioritized efficiency and fairness in allocating housing tax credits.