Texas Housing Board Asking to Reissue Tax Credits Two Projects Handed Back

Two stalled apartment projects are asking the Texas housing board to reissue federal tax credits they handed back, skipping the yearly competition that normally decides who gets them. The board votes Oct. 8.

Those credits are the main subsidy for building below-market apartments in Texas, and developers ask for far more of them than the state has to hand out. A narrow exception in the board’s own rules lets a developer who returns an award get the same amount again the following year, outside that competition. The board has to find all eight of the exception’s conditions met, and it is not allowed to waive any of them. Construction must already have started. A sudden event outside the owner’s control — fire, flooding, a hard freeze, vandalism, a change in the law, a supplier failure, a lawsuit by an unrelated party — must have made the work impossible or materially slowed it. The owner must have been insured and must have warned the agency in time, and the deal has to still pencil out after any insurance money.

The rule shuts several doors on the way out. Anything caused by the owner’s own negligence is excluded by name. For rainfall, material shortages or labor shortages — the three claims a builder reaches for first — the owner has to show the problem could not reasonably have been foreseen and planned around. The two developments are Sagebrush Apartments and Connect Hillcroft. What each says went wrong is not public yet: state law gives the board its meeting book three days before it meets, and nothing had been posted when this was written.

They are not the only deals in trouble. Half the twenty numbered items concern a single development each — two requests to raise a credit award, one for more time to build, two application amendments, an ownership change and two rule waivers. A separate item would dock one developer points for failing to meet its obligations. The scoring rule lets the board subtract as much as two points per application from an applicant’s score in the next competitive round, or bar it from competing at all. The board has made no finding.

Also up: self-help center grants for colonia residents in Starr and Nueces counties, two bond issues that fund mortgages for first-time buyers, and a resolution asking the Texas Bond Review Board to waive a single-family bond set-aside for the year. Anyone wanting to speak has to show up in person, because the notice offers no phone or online option.

Meeting at a glance

Board members

• Leo Vasquez — chair; Houston; corporate finance consultant; term to 2029.
• Kenny Marchant — vice chair; Coppell; former U.S. congressman; term to 2031.
• Cindy Conroy — El Paso; community outreach director, WestStar bank; term to 2027.
• Anna Maria Farías — San Antonio; former HUD fair housing official; term to 2027.
• Holland Harper — Paris; chief development officer, Harrison, Walker and Harper; term to 2029.
• Ajay Thomas — Austin; head of public finance, FHN Financial; term to 2031.
• One of the seven seats is vacant.

Names and term dates are from the department’s board page, checked October 1, which lists six members for a seven-seat board and names no chair; Vasquez and Marchant are shown there as chair and vice chair. Cities and occupations come from the governor’s appointment releases for Vasquez and Conroy, Marchant and Thomas, Harper and Farías. The Dispatch could find no state source stating when the seventh seat was vacated. Government Code §2306.032(c) requires board materials to be posted no later than the third day before the meeting. Meeting contact: Michael Lyttle, (512) 475-4542.