Plano ISD and the city of Plano are considering legal action against local Public Facility Corporations to ensure transparency and availability when it comes to affordable housing for Plano families.
According to Plano ISD, over the past few months, various city staff members and council representatives have been working to verify that projects initiated by local Public Facility Corporations (PFCs) adhere to all legal criteria necessary to qualify for the 100% property tax exemptions, which can extend for as long as 99 years in certain instances. In order to be eligible for this exemption, the PFC properties in question must allocate a minimum of 50% of their units for households with incomes lower than 80% of the median income for families in the local area.
However, according to the district, the PFCs have been unable to provide records demonstrating that the mandated quantity of affordable units has been leased to individuals meeting the income criteria.
In Plano, the rental rates deemed affordable for a family earning 80% of the local median family income remain prohibitively high for numerous residents. Consequently, PFCs may not be effectively fulfilling their intended purpose, simultaneously leading to a loss of tax revenue for the city, which could otherwise be employed to bolster the inventory of affordable housing through alternative means.
This year, the Texas Legislature passed a measure aimed at reducing the potential for misuse of property tax incentives. The recent law introduces provisions to enhance accountability and transparency, as well as to deter developers from evading substantial tax payments when they do not provide affordable housing as promised. Under this law, the duration of tax exemptions is shortened, a portion of the affordable units must cater to lower-income residents who are particularly vulnerable and in urgent need of housing solutions, and local taxing authorities such as cities and school districts must be involved in the approval process.
The city of Plano and Plano ISD claim that over the past two years, they experienced substantial losses in tax revenue. During this time, the Plano Housing Authority's PFCs entered into multiple PFC agreements with developers without obtaining the consent of the city of Plano and the school district.
The city and the district are currently pursuing additional information regarding these contractual agreements.
“We are prepared to initiate a legal process to obtain information to clarify how these PFCs conduct business in our city,” the district said in a statement. “Our ultimate goal is to ensure accountability, to verify that taxpayer funds are, in fact, supporting affordable housing and that the housing is available to Plano families who need it the most.”