Earlier this month Governor Abbot announced that he is calling the Texas Legislature back for special session in July. Legislators will be addressing a long list of issues during special session including sunset legislation, property tax reform, caps on state and local spending and school finance reform. In general, the affordable housing did not fare well during the regular session since few bills were able to clear both chambers. Even though Governor Abbot has yet to sign all the bills that passed during regular session, we can review the major housing bills that passed in the 85th Regular Legislative Session that affect Austin.

The biggest blow to affordable housing in Austin this session came from H.B.1449 which prohibits local governments from imposing linkage fees on new construction. As we discussed in our last newsletter, linkage fees are broad-based, mandatory fees that are levied on all new construction and are used to fund the affordable housing needs of a jurisdiction. The bill was filed by Representative Ron Simmons and was signed by the Governor on May 29. By prohibiting use of this tool, H.B.1449 will limit the City of Austin’s ability to fund affordable housing initiatives.

Representative Eddie Rodriguez filed H.B.3281 and Senator Kirk Watson filed S.B. 1656 during the session. Both would continue 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. The final bill prohibits cities from imposing inclusionary zoning in homestead preservation districts. The identical bills made their way through both chambers but Governor Abbot has yet to sign them.

Senator Watson also filed S.B. 1992 which would allow 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. The bill has not been signed by Governor Abbot but it could potentially allow Austin to gain increased tax credit financing for affordable housing.