State of Texas Legislative Update
The special session of the Texas Legislature opened on July 18 with the Senate speedily working to pass two bills reauthorizing the Texas Medical Board and four other state agencies. When Governor Abbot announced that he is calling the Texas Legislature back for special session he specified that sunset legislation must be addressed first before legislators can address any of the other 19 items on the Governor’s agenda. Whereas special session is just beginning, we can now look back at the 85th Regular Legislative Session and review how affordable housing efforts in Austin fared. In all, Governor Abbot vetoed 50 bills focused on a range of issues, including a number of bills benefiting Austin residents.
On June 15, Governor Abbot announced that he vetoed H.B.3281 filed by Representative Eddie Rodriguez. A companion senate bill, S.B. 1656 was filed by Senator Kirk Watson. The bill would have continued to make the City of Austin eligible to establish homestead preservation districts. Establishing the districts allows a city to use housing tools aimed at increasing homeownership, providing affordable housing and preventing gentrification. Even though the final bill prohibited cities from imposing inclusionary zoning in homestead preservation districts it was vetoed by the Governor.
In his veto statement, Governor Abbot stated the bill would give “special tax treatment to certain neighborhoods at the expense of other taxpayers, with the apparent goal to stymie the natural forces of the free market” and that “we should not empower cities to spend taxpayer money in a futile effort to hold back the free market.”
The Governor went on to say further that the best way to ensure that residents do not lose their homes is for the City to decrease their tax burden. However, Mayor Adler has clearly stated that if state legislators truly wish to reduce Texans’ property tax burden they must address the state’s school finance system. In a tweet on July 18, the Mayor stated, “Seventy-five percent of Austin’s property tax increase is school taxes, a direct result of the failure to fix broken school finance system.”
H.B.3281 would have allowed the City of Austin to operationalize new homestead preservation districts established in southeast, east and north Austin in 2015. However, since the bill was vetoed by the Governor, the original 4.5 square mile East Austin homestead preservation district is now the only fully established and operationalized district in the city. You can learn more about that here. The Austin American-Statesman reported in June that according to the City of Austin’s Interim Chief Financial Officer Greg Canally, the City would be able to raise $240,000 this fiscal year for funding affordable housing efforts in the East Austin district.
Governor Abbot also vetoed S.B. 1992 filed by Senator Watson. The bill would have allowed the allocation of housing tax credits in Austin to more than one development in a single community in the same year, only if the developments will be located more than two linear miles apart or will serve different types of households. In his veto statement, the Governor simply stated, “Existing law governing the density of subsidized housing in large cities should remain in place, and Travis County should be subject to the same rules as Bexar, Dallas, Harris, and Tarrant counties.” The bill aimed to allow Austin to gain increased tax credit financing for affordable housing and was championed by local affordable housing advocates.
In all, the 85th Regular Legislative Session led to meager gains for the affordable housing advocacy community in Austin. Along with the vetoing of the above bills, the signing of H.B.1449 that prohibits local governments from imposing linkage fees on new construction dealt a severe blow to local affordable housing efforts. However, a few bills enacted during the regular session help in furthering affordability goals, such as H.B. 1099 filed by Representative Terry Canales that clarifies tenants’ rights to call police or emergency assistance without the fear of the landlord imposing monetary or other penalties. Over the course of the special session, it will be important to see if legislators are able to address affordability concerns in Texas by tackling school finance and property tax reform.