Inclusive Communities Project v. TDHCA Ruling (11:54) Chair Lucio laid out interim charge #5.
Michael Lyttle, TDHCA, testified. Mr. Lyttle said the commissioner was not available due to his wife having surgery, but that Mr. Eccles was available from the OAG who had handled the case.
Beau Eccles, OAG, testified on the charge. Mr. Eccles said neither
SCOT S nor the District Court had issued directives requiring changes to statute yet, but that there may be considerations to creating such changes to ensure further losses in court.
Sen. Bettencourt said he was “fascinated” that the ruling did not overturn any existing statute. Mr. Eccles said the initial lawsuit was a challenge to the fair housing statute regarding certain actions of TDHCA such that the developments concerned were intentionally placed in low- income areas with large minority populations. Mr. Eccles said that while the court had found no intentional discrimination, but had found unintentional discrimination, using an analogy to employment discrimination law. Mr. Eccles said the case had been sent back to the District Court to rule on prime ephasia and possible requirements to change statute after identifying problems.
Sen. Bettencourt asked what the final vote at SCOTUS had been. Mr. Eccles said it had been 5-4.
Sen. Menendez asked how long Mr. Eccles had been on the case. Mr. Eccles said he had been on the case for 1 year. Sen. Menendez and Mr. Eccles discussed high-need and high-opportunity areas. Sen. Menendez said he did not believe there was enough affordable housing being developed in the state. Mr. Eccles said that “high-opportunity” areas had been a working definition that had been changing since 2009 through the evolution of the QAP. Sen. Menendez discussed Austin as an example of a place with high disparity geographically and requested that the commission advise the legislature on how to improve dynamics to make mixed housing more of a reality.
(12:12) Bobby Bowling, Texas Affiliation of Affordable Housing Providers, testified and said 80-85% of tax credit developers were represented by the organization. Mr. Boling said that he and his brother built about 250 housing units and 200 apartment units in El Paso each year for low income individuals and families. Mr. Boling said that the developers liked that they were exempted from the disparate impact and the ruling on HUD’s fair housing rule. Mr. Boling discussed the QAP requirement. Mr. Boling said that some of the rules originally created in the TX QAP were no longer in line with the Fair Housing Act and could be manipulated by “Not In My Back Yard” groups.
Sen. Menendez proposed that the legislature could lower the number of points awarded to certain portions of the approval process to put the affordable housing developments on equal footing with the neighborhood associations–particularly in regard to many of the NIMBY groups responding to tactics which were “not based on facts” and “manipulated fears.” Mr. Eccles said that the scoring section was already prioritized which required at least 1/10th of the support to come from local organizations and be backed up with a letter from legislative representatives. Mr. Boling said that he believed that no project had been begun in 2016 without the letter of support from either the legislature or the county governing board–essentially making such letters a veto.
Janine Sisak, TAAHP, testified. Ms. Sisak said she worked with Foundation Communities in Austin and discussed the problems they had encountered with the letters of support from letters–particularly after the advent of the identification of High Opportunity Areas. Ms. Sisak said that the tax credit program was largely becoming a suburban and rural program and that she felt such housing should be more equally distributed between urban, suburban and rural areas.
(12:28) Sen. Bettencourt asked what solutions could be changed. Ms. Sisak said that county and municipal support was 17 points, state representative support was anything from 8 points to -8 points which should be seen as a 16 point swing rather than an 8 point swing. Ms. Sisak suggested that the legislative letter and the county or municipal support be interchangeable. Mr. Boling said that there used to be no legislative mandate for the QAP. Sen. Menendez and Mr. Boling discussed how rules could be changed for mixed-use credits.
Neil Ratcliffe, TAAHP and Texas Apartment Association, testified. Mr. Ratcliffe discussed his understanding of the recent SCOTUS ruling and said he had encountered more organized opposition to affordable housing by NIMBY groups from the wealthier neighborhoods. Mr. Ratcliffe said the competitive nature of the developments meant that a decision could be made by 2-3 points. Mr. Ratcliffe said that while the city resolutions were well intentioned, they were cumbersome to the process given time constraints currently in place.
(12:45) Chair Lucio discussed he and Sen. Menendez’s dedication to the issue of affordable housing. Chair Lucio discussed his 23 city tour he would be embarking on in the fall and said he felt affordable housing would be a key issue during his travels. Sen. Menendez said he understood there was a recent development in Harris Co. where there had been support from a state representative who then tried to revoke his support in response to feedback from other constituent groups. Mr. Ratcliffe said the system had a few elements that took a process which was fair and gave room for minority groups to be protected which made the process “hyper-political.”
Mike Sugrue, Multi-Family Council – Texas Association of Builders, testified. Mr. Sugrue said that the organization was dedicated to the availability of affordable housing for families in TX. Mr. Sugrue discussed comparable rent and said that their product was nearly indistinguishable from private market options. Mr. Sugrue said there should be better ways to score affordable housing for seniors because they did not need to be located near a school like other affordable housing options.
(12:57) Sen. Menendez discussed the problem created by displacing certain individuals and how he believed such problems could be addressed without micromanagement by the legislature. Sen. Menendez said that in a state growing by 500 thousand per year, there needed to be more than 12 thousand affordable housing units created per year.
Paul Farmer, Rural Rental Housing Association of Texas, testified. Mr. Farmer said he did not see how rules designed to be applied to places like Dallas were or should be applicable to more rural areas like Cedar Park.
Chair Lucio said he would like to see how many more units could be created if funds available were being used or leveraged more efficiently. Mr. Ratcliffe added that he felt the agency was doing a great job of working within the legislative constructs, but that legislation was needed to de-politicize the process. Mr. Ratcliffe provided an anecdotal story of a child in his church who lived in affordable housing and who he felt should have the same opportunities as everyone else. Chair Lucio described living in government housing (which now has a plaque indicating that any child who lived in that housing could be a state senator one day) as one of 10 children.
(10:10) Dr. Heather Way, UT School of Law, testified on fair housing law. Dr. Way provided her legal opinion on the SCOTUS case and other recent changes to federal statute. Dr. Way said that the legal practices under the FHA required that housing should be created under the idea to create an integrated society. Dr. Way said that ICP v. TDHCA ruled that there were still unintentional disparate impacts created by statute.
Chair Lucio asked about the new fair housing regulations. Dr. Way said there had been new regulations added the previous year and in 2013. Chair Lucio asked for more detailed information to be submitted to the committee to assure that the changes were productive.
Sen. Menendez discussed the qualified census tracts.
Charlie Duncan, Texas Low Income Housing Information Service, testified. Mr. Duncan said that he also felt the weight of the legislative and county/municipal supportive measures were problematic. Mr. Duncan said he felt it would be a mistake the do away with the tax credit program even temporarily as part of the 4% budget reduction. Mr. Duncan said the
SCOT S decision only regarded the provisions for affordable housing to be available, but not the places which such housing should be available. Mr. Duncan recommended statute also be amended to create performance measures to ensure affordable housing was being built to best serve those who need it.
Chair Lucio and Dr. Way discussed provisions to prevent direct and indirect disparities in the availability of affordable housing.
(1:28) Sen. Garcia asked if the map of racial and incomes in Houston was meant to show, “white people are poor, too.” Mr. Duncan discussed the information used the create the map. Mr. Duncan said it was his intention to show that some subgroups had benefited where others had not.
Sen. Garcia asked if Dr. Way’s studies did income breakdowns in addition to ethnicity. Dr. Way said that because income level was not a protected class, they did not have that information–though other studies had shown a direct connection between race/ethnicity and income level. Sen. Garcia and Dr. Way discussed additional burdens of building in zoned areas. Sen. Garcia asked what the state could in regard to unincorporated areas. Dr. Way said she had not thought about the particular issue. Mr. Duncan said that he had participated in roundtable sessions on QAPs and that Mr. Eccles had suggested that a more regional approach may be necessary for the QAPs to function best. Sen. Garcia concluded, “Well, you can’t argue with numbers–though some people try.”
Sen. Bettencourt discussed the disparities in the disparity maps Mr. Duncan had provided. Sen. Bettencourt asked what the initial purpose of the map had been. Mr. Duncan said it had been derived from data on reinvestment on the block level combined with block level census data.
(1:40) Sen. Bettencourt noted there were 12 affordable housing projects in the area Mr. Duncan’s map focused on and asked why the city changed its mind as to where to place such complexes after initial plans to base it on the map. Mr. Duncan said that some of it had to do with proximity to public transportation and schools, but that it was also in response to opposition by neighborhood groups.
Sen. Menendez recommended that similar maps be created for all the urban counties. Sen. Menendez asked how it could be proven that the current point system worked counter to the SCOTUS ruling. Dr. Way said she did believe that a study could be helpful and that the county regional planning committees would be the best to approach for the collection and analysis of such quantitative data. Sen. Menendez asked that Mr. Duncan to provide information on the different types of affordable housing available in the state.
(4:33) Tracey Fine, National Church Residences and Leading Age Texas, testified on interim charge #5. Ms. Fine said seniors living in affordable housing complexes had a higher rate of chronic disease to their peers and were more likely to be dual-eligible for Medicare and Medicaid. Ms. Fine said that in 2014, Texas spent $2.4 billion on nursing homes which she asserted would be better spent on service coordinators and affordable housing complexes. Ms. Fine said that currently seniors made up 20% of the Medicaid population, but represented 60% of the cost. Ms. Fine made recommendations for better construction which would benefit seniors in affordable housing complexes or services which could be provided to keep seniors in the current homes.
Jonathan Campbell, National Interfaith Foundation, testified on interim charge #5. Mr. Campbell said SCOTUS did not define “equitable” in their decision, but that his organization believes that there should be minimum quotas for all communities to assure equal distribution and opportunity while avoiding population shifts.
Clark Colvin, ITEX and Coalition of Affordable Developers, testified on interim charge #5. Mr. Colvin said they agreed that the points system was unfairly weighted and recommended that there be no change to the tax credit to adjust for the 4% reduction.
Sen. Lucio added his thoughts as to the need for more affordable housing. Ms. Fine added that she did not believe housing and healthcare should be siloed because they were very integral to each other. Sen. Lucio said, “It’s true. People are dying to live.”