⚖️ Who Really Wins in Houston Real Estate? 🏠

🚨 Affordable Housing or Developer Jackpot? 💵

Bill Rapp, Commercial Mortgage Broker
December 09, 2024•3 min read

🚨 Affordable Housing or Developer Jackpot? 💵

⚖️ Who Really Wins in Houston Real Estate? 🏠

Houston’s housing crisis isn’t just about rising rents—it’s also about a multi-million-dollar loophole that’s robbing taxpayers blind. Enter the Public Facility Corporation (PFC) scheme, a system designed to create affordable housing but now better known for funding developers' dreams while delivering almost nothing to low-income communities. Let’s break it down, Houston-style.

What’s a PFC? Sounds Official, Right? 🏦

Think of PFCs like Houston’s version of that too-good-to-be-true deal on Facebook Marketplace. Created to fund public projects, PFCs partner with developers to build “affordable housing.” The catch? The properties become tax-exempt, and developers promise 50% of units will be affordable… ish.

But here’s the kicker: “affordable” units often cost as much—or more—than market-rate apartments. So, developers get fat tax breaks while low-income renters keep struggling. Meanwhile, taxpayers foot the bill. Cool system, right? 🤔

How the Tax Trick Works đź’°

Developers “sell” properties to a PFC they create, which then leases the buildings back to them—granting a 99-year tax exemption. They still control the property, rake in rents, and legally avoid paying millions in property taxes. It’s like playing Monopoly where only the developers get hotels… for free.

Example:

  • Retreat at Riverstone: Worth $57.7M, tax bill $1.2M/year. Zero paid.

  • The Trestles: Worth $22.7M, tax bill $400K/year. Nope, nothing.

And guess who gets stuck with the bill? Local schools, fire departments, and public services that rely on property taxes to function. 🎓🚒

Key Players: The Real Monopoly Champs 🏢🎩

  • Rosenberg Housing Authority (RHA): Created its PFC in 2021 and started handing out tax-free deals like candy on Halloween.

  • Houston Housing Authority (HHA): Basically playing “Houstonopoly” with properties across the city and beyond. An audit revealed they’ve taken billions off local tax rolls while offering minimal affordable housing.

Oh, and fun fact: Some lawmakers benefiting from these deals just happen to be connected to development firms. Coincidence? We think not. 🙄

Who Really Pays the Price? 📉

Public schools like Fort Bend ISD are left scrambling for funds, while housing advocates keep asking, “Where’s the affordable housing?” (Spoiler: It’s not in those tax-free developments).

An audit found only 1% of PFC-created units in Houston actually serve low-income residents. Meanwhile, renters often pay more after the tax-exempt switch. It’s like ordering a burger and only getting the napkin. 🍔🧻

The Fix? Legislative Whack-a-Mole 🛠️

State Rep. Gary Gates tried to tighten the rules with a revised bill demanding transparency and oversight. Developers, in turn, got creative and found new loopholes faster than a cat dodging bath time.

Still, there’s hope if lawmakers, local leaders, and community advocates keep pushing for real reform. Until then, Houston’s housing crisis remains a cautionary tale of what happens when corporate greed goes unchecked.

Final Thought: Accountability, Please! 🔍

If Houston wants real affordable housing, it needs real oversight, honest policies, and a government that can’t be bought with campaign checks. Until then, taxpayers will keep paying for developers’ “affordable housing” that’s anything but.

What’s your take on Houston’s housing crisis? Sound off in the comments!

I’m an experienced Commercial Real Estate Mortgage Broker, please feel free to reach me at 281-222-0433.

#HoustonHousingCrisis #AffordableHousingReform #TaxpayerAccountability #CREWatch #StopTheScam #RealEstateTruths

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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory

Houston Housing CrisisPublic Facility Corporations (PFCs)affordable housing HoustonHouston Housing Authority (HHA)real estate tax loopholeslow-income housing Texashousing development scamsTexas real estate corruptiontaxpayer accountability Houston
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Bill Rapp - Commercial & Residential Mortgage Broker

Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: • Fixed-rate mortgages: Offering stability with predictable monthly payments. • Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. • FHA loans: Making homeownership accessible with lower down payments. • VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: • Purchase loans: Financing the acquisition of new buildings or land. • Construction loans: Facilitating the development of your project. • Refinance loans: Restructuring your existing mortgage for better terms. • SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: • Expertise: Our brokers have a deep understanding of both residential and commercial lending. • Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. • Streamlined Process: We handle the paperwork, keeping you informed every step of the way. • Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

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