In late October, the Texas Comptroller of Public Accounts announced a freeze on all new and renewed certifications under the state’s Historically Underutilized Business (HUB) program — a decision that has already reshaped state housing policy. Acting Comptroller Kelly Hancock said the move was part of a broader review to ensure compliance with Governor Greg Abbott’s January executive order banning diversity, equity, and inclusion (DEI) initiatives in state agencies.
As a direct result, the Texas Department of Housing and Community Affairs (TDHCA) removed the HUB scoring category from the Draft 2026 Qualified Allocation Plan (QAP):
TDHCA Draft 2026 QAP – §11.9(b)(2)(A) Sponsor Characteristics:
“Scoring category for HUBs has been removed in response to the recent announcement from the Texas Comptroller of Public Accounts regarding the suspension of the issuance of new HUB certificates.”
What the HUB Program Does
Created in the 1990s and co-authored by Sen. Royce West (D–Dallas), the HUB program certifies businesses that are majority-owned by women, minorities, or service-disabled veterans and encourages state agencies to include them in contracting opportunities. The law does not set quotas; it directs agencies to make a “good faith effort” to solicit bids from HUB-certified firms.
While the Comptroller’s office oversees certification, the program itself is established in statute and cannot be repealed without legislative action. Still, the freeze halts participation for new or expiring HUB entities—affecting every state program that depends on HUB verification, including affordable housing.
Impact on the Housing Tax Credit Program
Under the 2025 QAP, developers could earn up to two points in Sponsor Characteristics by including a certified HUB in the ownership structure or through an active partnership. Those points were created to recognize diversity, mentorship, and inclusion among development teams, principles that have become integral to the industry’s leadership pipeline.
The HUB scoring category traces back to former TDHCA Board Member Shadrick Bogany of Houston, appointed by Governor Rick Perry. During his seven years of service, Bogany championed the inclusion of HUB participation in the Qualified Allocation Plan, seeing it not as a box to check, but as a pathway to ownership, mentorship, and lasting industry capacity.
TAAHP Members Defend HUB Program as a Pathway for Capacity
At the May 2025 TDHCA Board meeting, TAAHP members delivered powerful testimony defending the HUB policy and highlighting its impact across Texas.
Many members shared how the HUB point enabled them to
- Launch their first development
- Leverage partnerships to strengthen technical skills
- Build long-term, community-rooted firms
- Mentor other underrepresented developers entering the field
The testimony reflected a strong sense of unity among developers, consultants, and housing authorities. Each emphasized that HUB participation has produced real capacity-building outcomes and tangible projects across the state.
Policy Context and Why It Matters
Acting Comptroller Kelly Hancock framed the statewide review as part of a broader effort to “end all DEI in Texas,” asserting that “businesses deserve a level playing field where contracts are earned by performance and best value, not race or sex quotas.” The freeze on HUB certifications coincides with an ongoing lawsuit from an Austin-based firm challenging the program’s constitutionality and reflects growing scrutiny of state initiatives tied to equity and inclusion.
For the affordable housing community, the implications are significant. The HUB scoring category has been one of the few mechanisms in Texas’ housing tax credit program to formally recognize diverse ownership, mentorship, and partnership—values that have strengthened both the market and the leadership pipeline within the industry. With the Comptroller’s freeze, that pathway is now on hold.
TDHCA has stated it will continue to monitor the Comptroller’s guidance on requirements and any related legislative action during the 2027 session before determining whether the HUB scoring category can be reinstated.