"Luxury" developments getting affordable housing tax breaks
PLANO (CBSNewsTexas.com) - The Latitude apartment complex along the George Bush Turnpike in Plano boasts of luxury living.
It's where, according to its website, "modern luxury meets classic sophistication."
The Collin County Tax Assessor's Office estimates the new development would, under normal circumstances, contribute more than 1 and a half million dollars in property taxes to the area this year alone. Instead, it and many other multi-million dollar properties, that have pledged to provide affordable housing, will pay nothing at all.
"We're really seeking to understand the projects and understand what they've actually done to fulfill the premise they were created under," said Plano City Manager Mark Israelson.
Israelson noticed a recent surge of developments operating as public facility corporations (PFCs).
Their tax free status cuts local governments' annual tax revenue in the Plano area by $12 million dollars. The Texas Legislature in 2015 opened these big tax breaks up to developers to incentivize the development of affordable housing.
But, now the city of Plano is going to court to question if that's actually happening.
"Are they actually becoming affordable? Are we actually seeing them move into that affordable category?" said Israelson.
"Right now we're able to be able to house approximately 2300 families per year. That's 2300 folks that are able to work and live in this area," said Dave Young, Plano Housing Authority's executive director.
It signed off on 13 deals in Plano that, he says, make the area affordable for people working in retail, restaurants, and even the city itself.
We found roughly half the PFCs here, though, market themselves for luxury.
"Are we subsidizing luxury complexes?" CBS News Texas' Andrea Lucia asked Young.
"We're still in Plano. You're still in a top tier multi-family environment," said Young. "You can't just say, 'Oh well , I'm going to make affordable housing but it's going to be extremely low end where you get four walls and a door'."
"But aren't there people who just need four walls and a door?" asked Lucia.
"There are. Where do you find that in Plano?" asked Young.
CBS News Texas tracked down residents at the Jada Legacy and Opal Legacy apartments, both PFCS, who told us the rent is lower.
"Roughly how much do you pay in rent?" Lucia asked one.
"$1800," she said.
"That's affordable?" asked Lucia.
"No, but, I mean, it's worse in other places," she said.
Developers who strike PFC deals aren't obligated to decrease rent by any specific amount, but they do agree to set aside at least half of their units for low income residents, defined by state law as those who make up to 80% of the median household income for a family of four in the area.
In the Dallas Metro Area that equates to families earning about $82,500 or less.
"We know that the greatest need for housing is for people making income much lower than that," said Ben Martin, research director for Texas Housers, a nonprofit dedicated to low income housing.
