Ron Waszczak August 17th, 2022
Paul Bettencourt’s purview of KISD:
https://wrm.capitol.texas.gov/fyiwebdocs/PDF/senate/dist7/r5.pdf
Randy Crump – August 12th, 2022
I think this is an issue of how you define “lower income rentals.” To keep the tax exemption, at least 51% of the units must be reserved for families or individuals making less than 80% or 60% of the area median income. Specifically, 134 are reserved for the 80% group and 34 for the 60% group. Additionally, a much smaller number of units must be made available to tenants with subsidized housing vouchers (Section 8). From the best I can decipher, that number is 5.
These two developments are slated to be exempt from sales and use taxes, as well as ad valorem property taxes. The properties, leased from Lakeside PFC for 75 and 99 years respectively, have deed restrictions placed on them which require that a certain minimum number of units be set aside as affordable housing.
Though little information about the value of these projects is available, the Harris County Real Property records reflect that the Caroline at Memorial project has been loaned not less than $57,265,000 from Amegy Bank. It is expected that the developer will add some of its own capital to the construction of the 340 unit project. The loss of tax revenue, if the value were based solely on the loan amount, is over $1,425,000 annually. This would greatly impact Katy ISD, which would be denied $774,000 in ad valorem tax revenue annually, but still be required to increase their own cost to provide education to the additional students.
The Memorial at Six property is projected to have a slightly a smaller number of units – 307 units – than its neighbor down the street. If the cost is proportional (10% fewer units), we can project the lost ad valorem taxes on that project to be $1,282,000.
Between the two proposed new construction projects, the taxing authorities will lose over $2,700,000 in annual tax revenue than if these projects were built without the tax benefits. This lost revenue to the taxing authorities is not for only a single year, but possibly for the entirety of the 99 and 75 year lease terms.