Primary Department: Housing and Community Development
Primary Department Head/Elected Official: Thao Costis
Secondary Department: Choose an item.
Secondary Department Head/Elected Official:
Regular or Supplemental RCA: Regular RCA
Type of Request: Policy
Project ID (if applicable): N/A
Vendor/Entity Legal Name (if applicable): N/A
MWBE Contracted Goal (if applicable): N/A
MWBE Current Participation (if applicable): N/A
Justification for 0% MWBE Participation Goal: N/A - Goal not applicable to request
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Justification for 0% Grant Indirect Costs Rate (if applicable): N/A - Not a grant item
Request Summary (Agenda Caption):
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Request for approval and authorization to form the Harris County Public Facility Corporation for the purpose of incentivizing the creation and provision of affordable housing in Harris County.
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Background and Discussion:
The Harris County Housing and Community Development Department (HCD) made a recommendation to Commissioners Court to create a Public Facility Corporation related to affordable housing on June 26, 2025.
HCD recommends that the County create the Harris County Public Facility Corporation (HCPFC) for the purpose of incentivizing the creation and provision of affordable housing in line with the County’s Strategic Plan.
Texas offers few tools encouraging affordable housing development, and PFCs represent a viable, untapped option. According to the County Strategic Plan, the County wants to “help residents achieve Housing Stability” (Goal 6) and “build and preserve affordable housing, particularly for low-income families” (Objective U). Creating a PFC will provide the County with an additional tool to do just that. As a part of Initiative U1, “develop community housing plan…” the PFC will allow the County to make progress on the creation of additional housing for low- and moderate-income households. The HCPFC would not require funding from the general fund and would generate its own funding raised by fees on the transactions. Additionally, at scale the HCPFC would be able to generate funding for the county to create additional affordable housing.
If the County does not create a PFC, developers will continue to pursue PFC deals with non-County controlled PFCs that operate in Harris County (both incorporated and unincorporated areas). Non-County PFC’s would still require approval for PFC deals in unincorporated Harris County by Commissioners Court. Developers could still benefit from the tax exemptions; however, the County will have limited influence over the property’s affordable housing levels, additional tenant protections and will not receive any financial proceeds from deals to invest in other affordable housing programs because they are not partners in the PFC deal.
Currently, the majority of affordable housing created in Harris County is through the Low-Income Housing Tax Credit Program which is governed by TDHCA. TDHCA rules allow a State Representative’s opposition to a LIHTC project in their district to negatively impact a project’s score for 9% LIHTC, effectively limiting a project’s chance for an award. Creating a PFC will give Harris County another tool to create housing affordability for our residents.
The current step in this process is to authorize the creation of the HCPFC.
The next steps in the process to create the HCPFC, that is Directors must be nominated by Commissioners Court and the Articles of Incorporation finalized and submitted to the Secretary of State, Court approval of Bylaws. As drafted, the Articles of Incorporation envision that Commissioners Court appoint at least three (3) elected officials as Directors of the HCPFC. The composition of the Board with a majority of elected officials will allow the PFC to operate more efficiently. Without a majority of elected officials, any PFC deal would have to come back to Court or the City Council, if located inside a City’s jurisdiction, for final approval.
Articles of Incorporation and By-laws have been drafted by the County Attorney’s Office (CAO) and will need to be finalized and approved at a future Commissioners Court.
Expected Impact:
No immediate additional fiscal increase is expected with the creation of the PFC.
HCD recommends the HCPFC starts with a pilot program of no more than 5 PFC transactions, then assess and report back to Commissioners Court with recommendations for future program design. If this recommendation is adopted, the HCPFC would support the creation of hundreds of units of affordable housing with these first 5 projects.
Revenue Implications Texas law currently limits local governments to a 3.5% annual increase in property tax revenue from existing property without voter approval. However, new construction is excluded from this revenue cap for the first year, allowing the County to collect additional revenue from growth without triggering an election. When a property receives a tax exemption, such as through a HFC or PFC, the County forfeits the opportunity to capture this uncapped revenue for new construction or receives the same amount of revenue but from a smaller tax base for existing properties, thereby shifting the same tax burden to all other taxpayers. For HFCs and PFCs, billions have been exempted in recent years in the County, resulting in either (1) potential loss of revenue for new construction or (2) a reallocation of tax burden to the non-exempt taxpayers of existing properties. With new construction PFC projects, one factor to consider is if the property would have been built without the advantage of the tax abatement. This could reduce or eliminate the concern of a hypothetical loss of additional revenue for new construction projects
Alternative Options:
Commissioners Court could decide not to create the HCPFC.
County Strategic Plan Goal: 6. Help residents achieve housing stability.
County Strategic Plan Objective: U: Build and preserve affordable housing, particularly for low-income families.
Justice/Safety Initiative (Goal 1): Choose an item.
Infrastructure Initiative (Goal 2): Choose an item.
Economy Initiative (Goal 3): Choose an item.
Health Initiative (Goal 4): Choose an item.
Climate/Resilience Initiative (Goal 5): Choose an item.
Housing Initiative (Goal 6): Choose an item.
Additional notes related to the Strategic Plan:
Prior Court Action (if any):
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Date |
Agenda Item # |
Action Taken |
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6/26/25 |
94 |
Discussion only, regarding: recommendations for Harris County usage of Public Facility Corporations (PFC) for the purposes of creating and preserving affordable housing. |
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2/6/25 |
270 |
Discussion only, regarding: the development of guidelines and recommendations for the usage and approval of PFCs for the purposes of developing affordable housing. |
Location:
Address (if applicable): N/A
Precinct(s): Countywide
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Anticipated Court Date: 11/13/2025
Anticipated Implementation Date (if different from Court date): Click or tap to enter a date.
Emergency/Disaster Recovery Note: Not an emergency, disaster, or ARPA related item
Contact(s) name, title, department: Tory Gunsolley, Chief Program Officer, Housing and Community Development
Attachments (if applicable): N/A