Early in 2024, the City of Irving discovered that two properties, collectively valued at over $150 million, had been removed from the property tax rolls without notice to the city. The properties became exempt under current state law, which allows Housing Finance Corporations (HFCs) to be entirely tax-exempt according to Local Government Code Chapter 394.
HFCs, often formed by city councils or commissioners courts, acquire land for multifamily affordable housing developments, which makes the properties exempt from ad valorem taxes. The issue is that HFCs do not have to restrict their ownership to the jurisdiction that created them, creating a major loophole against cities such as Irving.
In this case, the Irving properties are owned by an HFC established by the Cameron County Commissioners Court, located near the U.S.-Mexico border. This HFC also owns properties in other North Texas cities, including Dallas and Euless.
Under current law, HFCs are not required to notify local jurisdictions when properties are removed from the tax rolls.
In the 89th Legislative Session, which begins in January 2025, Irving plans to seek a change in state law that would require any HFC to get approval of the local city and/or county where the property is located before the property can become exempt from taxes.
