Last month, the Lone Star Standard reported that the City of Plano and Plano ISD had filed a lawsuit against the Plano Housing authority and five other public facility corporations (PFC).

The lawsuit aims to reverse, what the city and ISD called ,“lucrative tax exemptions” for PFCs because they believe the law is unconstitutional and the PFCs are not holding up their end of the bargain - namely, providing for the required affordable housing. 

Plano told the Lone Star Standard that the PFCs “have not been able to produce records showing the required number of affordable units are leased to citizens who qualify based on their income and, in some cases, that they are providing affordable housing at all.” 

The City of Euless, which is in Tarrant County and represented by Representative Salman Bhojani, tells us they are having a similar issue. 

In a statement provided to the Lone Star Standard, the city of Euless said they “became aware that the Cameron County Housing Finance Corporation purchased an apartment complex in the city of Euless in March of 2023 and received an absolute [property tax] exemption on the property. Cameron County Housing Finance Corporation took this action without any discussion, disclosure, or consent of the city of Euless.” 

Cameron County is more than 500 miles from the city of Euless. 

The property tax exemption, according to the city, “resulted in the loss of over $500,000 to the city of Euless and the loss exceeded $2 million for all taxing entities in Tarrant County.” The loss is equivalent to 1% of Euless’ General Fund operating budget.

The city claims that they have “provided substantial services to the apartment complex with over 500 calls for service. The costs of providing these services have now shifted to other residential and commercial taxpayers.” 

Former City Council Member from Euless, and now its State Representative, Salman Bhojani told us in a statement that his office is “incredibly concerned to hear about this situation from the City of Euless and other municipalities in DFW. These tax abatements are meant to incentivize counties to build local, affordable housing developments. Counties from 500 miles away should not be abusing the tax breaks the Texas Legislature provided for monetary benefit.” 

On June 25, 2024, Euless and neighboring cities, Hurst and Bedford, passed a joint resolution in support of legislative action to amend Chapter 394 of the Texas Local Government Code, which grants Housing Finance Corporations (HFCs) the authority to conduct real estate transactions which result in property tax exemptions across the state.

Representative Gary Gates told us in April that with the changes to the rules regarding PFCs, developers are now using HFCs to get the same tax exemptions. The legislation passed during the last session changed the requirements for PFCs, not HFCs. 

Rep. Bhojani’s office said they “will continue to investigate this issue as we plan for a legislative solution in the upcoming session."