Texas Housing Crisis: Coalition Takes a Stand with Lawsuit
The Challenge Facing Affordable Housing in Texas
The Texas Workforce Housing Coalition is standing up for affordable housing by taking legal action against the Bexar Appraisal District. This lawsuit questions the constitutionality of the recent housing reforms outlined in House Bill 21 (HB21). The organization believes these reforms violate the Texas Constitution.
Concerns About the Impact of HB21
The coalition warns that unwarranted changes to the tax-exempt status of properties will worsen the existing affordable housing crisis in Texas. They argue that these changes will lead to mass evictions, particularly affecting middle- and working-class families, including those who serve as teachers and first responders.
History of Texas Housing Laws
For many years, Texas law had supported affordable housing initiatives through Old Chapter 394, which allowed real estate developers to collaborate with publicly-sponsored Housing Finance Corporations (HFCs). This partnership resulted in significant investments designed to create and maintain affordable housing for essential workers across the state.
Implications of House Bill 21
Passed previously this year, HB21 has altered these promising arrangements. It retroactively changes the laws that governed previous contracts, potentially nullifying agreements made under Old Chapter 394. Despite HB21 not being scheduled to take effect for existing affordable housing developments until January 2027, appraisal districts have started to reverse previously approved deals.
The Legal Basis for the Challenge
The lawsuit seeks a declaration from the court that HB21 violates the Texas Constitution. Plaintiffs assert that the state must uphold the agreements made under Old Chapter 394, which allowed for property management beyond the developers' home jurisdictions.
The Fallout from Unconstitutional Reforms
Should the state law be allowed to change retroactively, it may severely deter future investments in Texas. Developers and investors could hesitate to navigate a landscape where agreements might be rendered void at any moment.
Defending Affordable Housing
Recent legal developments include the Texas Workforce Housing Coalition's petition to intervene in additional litigation concerning the Cameron County Housing Finance Corporation. This intervention seeks clarification about whether the CCHFC had the authority to manage properties outside of its jurisdiction.
Who is the Texas Workforce Housing Coalition?
The Texas Workforce Housing Coalition is a united front of affordable housing providers committed to preserving and enhancing housing options for Texans. They partner with industry and advocacy groups to tackle the complex challenge of maintaining affordable housing in the state.
About Post WB Apartments, LLC
Post WB Apartments, LLC operates in Bexar County and is tied to several affordable housing initiatives. Their investment in the Willowbend Apartments aims to support the local community by providing homes for working families.
Frequently Asked Questions
What led to the lawsuit by the Texas Workforce Housing Coalition?
The lawsuit was initiated in response to the implementation of HB21, which the coalition claims violates the Texas Constitution and jeopardizes affordable housing.
What impact does House Bill 21 have on affordable housing?
HB21 could lead to the loss of tax exemptions for affordable housing developments, exacerbating the housing crisis and potentially leading to mass evictions.
What was the purpose of Old Chapter 394?
Old Chapter 394 facilitated partnerships between developers and Housing Finance Corporations, allowing for tax exemptions and encouraging the creation of affordable housing.
How has the current legal situation affected investments?
The retroactive application of HB21 could deter future investments in Texas, as developers might fear potential legal complications.
Who is involved in the case?
The case involves the Texas Workforce Housing Coalition and Post WB Apartments, LLC, represented by Gibson, Dunn & Crutcher LLP and Chasnoff | Stribling LLP.
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