Harris County now using little-known state law for affordable housing tax breaks

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Monday, October 30, 2023
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HARRIS COUNTY, Texas (KTRK) -- Spurred by a group of nonprofit leaders who turned to a little-known 2003 state law, Harris County launched a new program in August to aid affordable housing by offering property tax breaks to nonprofit groups.

The video above is from ABC 13's 24/7 livestream.

With insurance and construction costs rising, many of those organizations are struggling to keep costs low enough to qualify as affordable housing. The new program in Harris County now allows for a 50% cut in property taxes for qualifying nonprofits.

The Houston Chronicle reported this first came about when a group of housing providers led by Mary Lawler with Avenue CDC discovered the law and took it to Harris County Commissioners Court.

Harris County then became the first major county in Texas to opt into the law.

Lawler says her group had to get creative when they received an insurance bill that doubled the premium for the upcoming year.

"We have an inflationary situation right now: property taxes, insurance, and utilities have really escalated dramatically in the last couple of years, and that's made it difficult to keep the apartments affordable," Lawler said. "This will help us and enable us to continue to operate these apartments on an affordable basis. But we still have work to do because the cost pressures we're facing right now are severe."

A recent Rice University study found 6 out of 10 households in Harris County are cost-burdened when it comes to meeting rent, with over 200,000 evictions filed in the county since 2000.

However, the new program is far from a sweeping blow. The total revenue reduction is capped at $1.5 million, though a spokesperson for Commissioner Adrian Garcia's office says that number could go up. County taxes account for about 25% of a resident's total property tax bill, which includes school district & city taxes.

"A lack of access to affordable housing poses a major threat to Harris County's future. I am proud to have led the efforts to give tax cuts to nonprofits that allow low-income residents to stay in their homes without forcing them to make difficult decisions like keeping a roof over their head or putting food on the table. This new policy is a major part of the answer to addressing the affordable housing crisis that we find ourselves in," Garcia said in a statement to ABC13.

The program could spur other municipalities to consider opting into the state law. A spokesperson for the Houston Housing and Community Development Department says a similar measure is being considered.

Organizations that qualify must be a Texas nonprofit and rent a majority of housing to residents who earn less than 60% of the area's median income, among other requirements.

The application window for next tax season will open from Jan. 1 through March 1. The Harris County Appraisal District will receive notification of qualifying properties and process the 50% exemption.