Conference committee strikes anti-NIMBY provisions from TDHCA legislation, continues agency 2 years

The Texas House/Senate Conference Committee on SB 1 has reached agreement to extend the life of the Texas Department of Housing and Community Affairs two years. The committee also voted to strike provisions in the Sunset Bill requiring disaster planning as well as Texas Sunset Advisory Commission recommendations designed to reduce Fair Housing violations that plague the State’s administration of the Low Income Housing Tax Credit program.

SB 1 eliminates all provisions for improving planning before future disasters through better utilization of federal CDBG funds for disaster recovery. These provisions, also developed by the Texas Sunset Advisory Commission, were cited by the Governor as the basis of his veto of the TDHCA Sunset Bill passed by the Legislature during the regular session.

SB 1 extends the life of TDHCA until September 1, 2013. This means the housing agency will be allowed to continue to operate through the next regular legislative session, but will be eliminated at that time unless the Legislature reauthorizes the agency.

Stunningly, the House/Senate conference committee struck the provisions from the Sunset Bill, recommended by the Texas Sunset Advisory Commission, designed to address the NIMBY and resulting Fair Housing Act violations that plague the Texas Low Income Housing Tax Credit program.

Legislative sources tell TxLIHIS this was a condition of the Governor’s approval of the extension of the life of the state housing department.

The most important change between the Sunset Bill passed in the Regular Session and vetoed by Gov. Perry and the current version of SB 1 is the elimination of the reduction of the number of points awarded to letters of opposition from neighborhood associations in TDHCA’s scoring applications for Low Income Housing Tax Credits from the highest point category to a lesser level. The current policy, retained in SB 1 effectively blocks affordable housing produced under the State administered low-income housing tax credit program from many middle class, all white neighborhoods.

An investigation by the Austin American Statesman documented that the State’s scoring of neighborhood letter’s impacts the program by giving power to NIMBY interests. A December 2010 study by University of Texas researchers commissioned by TxLIHIS found Low Income Housing Tax Credit housing is more likely than other rental housing to be built in low-income, predominantly minority neighborhoods.

The State of Texas is set to go to trial this Summer on a lawsuit brought by Dallas civil rights attorney Mike Daniel over the State’s alleged segregation of  LIHTC developments on the basis of race.

The lawsuit alleges:

• TDHCA uses race and ethnicity as one factor in its decision whether to award Low Income Housing Tax credits and this factor is a cause of unlawful segregation and other discrimination.
• The use of race as a factor subjects minority tenants to slum and blighted conditions.

The lawsuit, on behalf of the Dallas-based Inclusive Communities Project can be found here.  The response filed by the State of Texas on behalf of TDHCA can be found here.

On December 11, 2010 Federal Judge Sidney A. Fitzwater rejected all of the claims made by TDHCA and ordered the lawsuit to go forward.  The judge’s order can be found here.

In addition to striking the anti-NIMBY language, SB 1 now contains a handful of special interest provisions for the benefit of private developers culled from the original Sunset bill that…

• Allows USDA Section 515 project to compete in the general LIHTC pool.
• Allows biennial Qualified Allocation Plans for Low Income Housing Tax Credits.
• Raises the amount an applicant for LIHTC can receive from $2 million to $3 million and caps the individual development limit to $2 million.
• Increases the distance required between development in a calendar year from one mile to two miles.
• Reduces the required hours of instruction for persons in the mobile home business from 20 hours to eight hours.

Aside from these special interest provisions, two general clean up provisions survived from the original Sunset bill. The first would eliminate the applicability of the regional allocation formula for housing trust fund appropriations less than $3 million. The second surviving provision increases the distance required between LIHTC developments built in a calendar year from one mile to two miles.