The Austin American-Statesman’s Eric Dexhiemer has a really good background story on the collapse of the American Housing Foundation in today’s paper.
The story attributes the economic collapse to the thin margins that the corporation operated on and the fact that they lost their property tax exemption through a series of unfavorable court rulings.
Dexhiemer reports that, “In the past 15 years, American Housing has received about $53 million worth of income tax credits for 16 projects, according to the Texas State Department of Housing and Community Affairs.”
American Housing also bought 13 apartment complexes across Texas by borrowing $128 million in tax-exempt bonds issued through the Texas State Affordable Housing Corporation (TSAHC). This was one of the factors that caused some Texas lawmakers to demonstrate their dissatisfaction with TSAHC by refusing to allow it to continue in business following a Sunset review of the agency. The Legislature reversed that decision during the special session concluded this week, at least temporarily, by granting TSAHC the ability to continue to operate through September 1, 2011.
Dexhiemer reports that the man behind American Housing Foundation, Steve Sterquell, “distributed hundreds of thousand of dollars in campaign donations to state politicians. A licensed pilot, he ferried some of them around on his private jet. He went on big-game safaris in Africa. Court documents in Amarillo show that he rewarded local private investors handsomely, paying them up to 18 percent interest to use their money.”
Sterquell is reported to have committed suicide April 1.