Legislative letters of support for affordable housing projects continue to be a hot topic for many Texas legislators as well as federal officials involved in the housing tax credit program administered by the state. Legislators often find themselves in the untenable position of having to take a stand on a local apartment development as a result of small but vocal NIMBY groups that oppose any form of housing they perceive as “government housing.” Developments built through the housing tax credit program are not “government housing” and often closely resemble apartments built with traditional financing.
The letters have even spawned accusations of cronyism and, in the instance of one community, a federal bribery investigation.
In 2013, members of the Texas Senate agreed to remove themselves from among those able to submit letters of support or opposition to a proposed development. Members of the Texas House of Representatives will be given the opportunity during the 2017 legislative session to follow the Senate’s exit from this usually contentious role.
“Requiring a letter of support from local lawmakers often puts them in a position they would rather avoid,” said Frank Jackson, executive director of the Texas Affiliation of Affordable Housing Providers. “Rural lawmakers with sprawling districts, for example, are forced to pick winners and losers within their own district.”
“Most agree that no one person should be able to determine where affordable housing will or won’t be built,” Jackson said. “Removing legislative letters will help depoliticize the process of building affordable housing financed with tax credits.”
It might also help keep Texas from fighting a losing battle over fair housing law in federal court.
Following the publication of new Fair Housing guidelines by HUD in 2015, federal agencies have been dedicating more time to exploring the impact of local support mechanisms in states’ Qualified Allocation Plans (QAPs) — the scoring process used to determine the location of affordable housing developments.
Earlier this year, the IRS issued a bulletin that seemed to make an example of Texas’ process of requiring letters of support from lawmakers, among others.
The IRS found that, while local jurisdictions are required to have a “reasonable opportunity” to comment on proposed developments, their approval is not required. The bulletin goes on to say that requiring local support promotes racial discrimination and violates Affirmatively Furthering Fair Housing laws.
In May, the Government Accountability Office published a report examining how local support is valued in the 19 states, including Texas, that use it as either a threshold item or a points item in their QAP. Of the 11 states requiring local support as a threshold item, the majority only require local jurisdictions be notified of the application to allow them time to provide comment.