On the final day for filing legislation, a Dallas mayoral candidate who’s also a member of the Texas Legislature submitted a bill that would take city council members’ hands out of the affordable housing tax credit cookie jar.
State Rep. Eric Johnson (D–Dallas), who’s serving his fifth term in the state legislature while also running for mayor, filed House Bill 4370 on Friday to remove local government officials from the scoring process for low-income housing tax credit applications.
Under current law, developers who apply for these government incentives have their projects “scored” by the Texas Department of Housing and Community Affairs using a point system. Among the criteria scored is “quantifiable community participation,” which is evaluated based on official recommendations from city councils, county commissioners, and state representatives, as well as input from neighborhood organizations.
The tax credits can be worth millions of dollars to real estate developers and create “an open invitation to corruption.” HB 4370 removes that invitation by removing local and state officials from the scoring process.
Johnson said last month the affordable housing tax credit program “has become the mother’s milk of political corruption in Dallas.” His statement followed ex-Dallas council member Carolyn Davis’s guilty plea in the city’s latest public corruption scandal involving bribes for low-income housing tax credits.
This source of corruption is well known to Johnson. He was elected nine years ago in the wake of a huge housing scandal that became known as the “Dallas City Hall Corruption Case.” Federal authorities prosecuted over a dozen defendants—including then-Mayor Pro Tem Don Hill and Johnson’s predecessor, State Rep. Terri Hodge (D–Dallas)—in an extortion and money-laundering scheme involving low-income housing.
Studies have shown that low-income housing tax credit programs are costly and inefficient mechanisms for helping low-income families find affordable housing, instead mainly benefitting developers and investors, and are rife with abuse and corruption.