Relating to the allocation of low income housing tax credits.
Summary
SB 2137 changes how the Texas Department of Housing and Community Affairs may score and select applications for low-income housing tax credits. The bill prohibits the department, as part of its qualified allocation plan, from requiring a public school campus’s educational quality to meet certain thresholds when the campus is in the attendance zone of a proposed development site, and it also bars the department from awarding points based on that same school-quality criterion.
The restriction is temporary: the new limits expire on September 1, 2027. The bill also directs the department to study the effects of this change on the allocation of low-income housing tax credits in Texas and to report its findings to the legislature by November 1, 2027. The law applies only to applications submitted during application cycles based on the 2026 or 2027 qualified allocation plans, and the act takes effect September 1, 2025.
Impact
The bill amends Section 2306.67022, Government Code, to limit the Texas Department of Housing and Community Affairs’ authority in designing qualified allocation plans for low-income housing tax credits. It removes school-campus educational quality from both threshold criteria and scoring criteria tied to a development site, which could broaden where affordable housing projects are eligible or competitive under the tax credit program. The bill affects applicants for low-income housing tax credits, the department’s plan-making process, and local housing siting decisions, while requiring a post-implementation study and legislative report.
Sentiment
The bill appears to have passed with meaningful but not overwhelming support, suggesting a divided but workable consensus. It cleared the Senate 24-6 and the House 91-44, with some members voting against it in both chambers. The vote pattern indicates that many lawmakers supported limiting school-quality criteria in housing tax credit decisions, while a substantial minority remained concerned about the policy change.
Contention
The main point of contention is the removal of public school educational quality from housing tax credit scoring and threshold requirements. Supporters likely viewed the change as reducing barriers to affordable housing development and preventing school-performance measures from being used to exclude projects, while opponents likely worried that the bill would weaken local control or allow developments in areas with lower-performing schools to receive favorable treatment. The temporary nature of the change and the required study suggest lawmakers wanted to test the policy’s effects before deciding whether to extend it.