Houston raises the bar for public-private housing deals
Writer: Andrea Teran
June 2025 — The Houston Housing Authority (HHA) has approved tax exemptions for two apartment complexes — The Enclave at Louetta and Regency Park Apartments—under a public facility corporation (PFC) structure. The new agreements mark a departure from previous deals by requiring that all units be affordable to households earning no more than 60% of the area median income (AMI).
The approvals follow a recent announcement by HHA President Jamie Bryant, who said in April that the agency would no longer accept new proposals under the PFC program. Bryant cited concerns that past agreements delivered limited public benefit while granting significant tax exemptions to developers.
The Enclave at Louetta, a new 358-unit complex in Spring, received preliminary approval before Bryant assumed leadership in February 2025. The 252-unit Regency Park Apartments, located in the South Belt/Ellington area, includes five units reserved for extremely low-income households earning 30% or less of AMI. According to HHA, the tax exemption will support renovations and maintain long-term affordability at Regency Park.
Both developments combine the PFC tax exemption with federal Low-Income Housing Tax Credits (LIHTC), a common method of financing rent-restricted housing. The tax break can reduce a development’s property tax burden by up to $1 million annually, depending on project size and location.
The tax exemption program, active since 2016, has been criticized in media reports and by city officials for producing few units affordable to the city’s lowest-income residents. A Houston Chronicle investigation found that over 100 PFC deals approved by HHA produced units largely priced for middle-income earners, with only 1% targeted to households at or below 30% AMI.
Local and state officials have raised concerns about how tax-exempt housing deals are structured. In late 2024, the Houston City Council delayed approval of two proposed PFC-backed developments due to questions regarding the rent levels. Council members debated whether rents targeted at 60% to 80% of AMI met the needs of residents in lower-income neighborhoods. One proposed project in Sunnyside drew specific concern due to gaps between the community’s income levels and the regional AMI used in rent calculations.
“My concern with Orem is that this is not affordable enough for the residents of Sunnyside,” said Council Member Julian Ramirez, as cited by Houston Public Media. “When you have a plan for at least 50% of the units to be above market rate, that sounds like gentrification to me.”
Meanwhile, the city of Houston’s Housing and Community Development Department (HCD) has been using ArcGIS Urban, a 3D digital modeling platform, to evaluate housing proposals and their neighborhood impacts. HCD staff use the platform to inform decisions about where to prioritize affordable housing investment.
According to the 2024 Kinder Houston Area Survey by Rice University’s Kinder Institute, more than 20% of the Houston-area residents identified housing affordability as the region’s top concern. Nearly half of the respondents said they could not cover a $400 emergency expense, highlighting the area’s widespread financial instability.
Since 2016, HHA has facilitated more than 17,000 apartment units through its PFC program, though most were priced for households earning up to 80% of AMI. Following a late 2024 audit revealing procedural deficiencies and financial oversight issues, former CEO David Northern resigned. The agency is no longer accepting new PFC proposals while it reassesses the program’s structure. No updates have been provided on whether a revised model will be introduced.
Additionally, regional planning officials continue to highlight the connection between housing and economic growth. “As businesses relocate to this region, one of the primary considerations before selecting a site is housing availability and affordability,” Rick Guerrero, chief outreach and government affairs officer at the Houston-Galveston Area Council, told Invest:. “Housing is an issue facing communities across the country. With housing being one of H-GAC’s top five priorities in 2025, we have established a committee that will help develop strategies, resources, and guides for large cities and small towns to remain an attractive place for private industry and ensure that the people employed in those communities can afford to live there as well.
Image courtesy of pixabay/ArtisticOperations
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