Tarrant County’s bid to revoke tax exemptions for out-of-town housing groups denied
The Tarrant Appraisal Review Board has denied requests from Tarrant County and five cities to revoke tax exemptions for housing complexes not operated in the county. Tarrant attorneys claimed the corporations do not provide affordable housing, as the exemptions were claimed for.
Known as traveling housing finance corporations and often associated with a city or county, these groups own and operate property outside of their home jurisdiction. Each of the six housing finance corporations discussed at Tuesday’s Appraisal Review Board hearing is considered “traveling.”
Each owns land in Tarrant County, some bought for $10 cash and “other good and valuable considerations” that aren’t listed, but are based outside the county. Some are nearly 400 miles away in West Texas or as far away as the southernmost tip of Texas.
The corporations claim tax exemptions for affordable housing, then lease out the land to private developers who operate apartment complexes.
Each of the housing finance corporations were taken off of the tax poll by the Tarrant Appraisal District (TAD). The county and cities challenging TAD’s decision to grant 28 tax exemptions argue that the housing finance corporations do not provide affordable housing.
Mark Kratovil, primary counsel for Tarrant County, asked that the Tarrant Appraisal Review Board decide that those tax exemptions were improperly given by TAD and to “claw back” taxes owed to the taxing entities affected. Another attorney clarified that this means the corporations would owe taxing entities the full amount of taxes from the time the tax exemptions were granted.
Tarrant County, which filed jointly with five cities, challenged six housing finance corporations’ tax exemptions. The six groups are: Pleasanton Housing Finance Corporation, Pecos Housing Finance Corporation, the Cameron County Housing Finance Corporation, Edcouch Community Housing Finance Corporation, Garland Housing Finance Corporation.
The cities who joined in the fight were Fort Worth, Mansfield, Grand Prairie, Euless and Haltom City. The Appraisal Review Board, made up of citizens who are trained by the Texas Comptroller, denied the requests 2-1.
Euless additionally challenged one of the same housing finance corporations on its own. That hearing also resulted in a split-vote denial. Arlington, separate from the county, challenged two of the same corporations plus a public facility corporation. Arlington’s requests were all denied, 3-0.
Texas Gov. Greg Abbott signed House Bill 21 into law on May 28, which went into effect immediately. The law closed a loophole in previous legislation which allowed housing finance corporations to be operated outside of their home jurisdiction.
All of the tax exemptions being challenged Tuesday were approved prior to May 28. The decision not to revoke the exemptions means the Appraisal Review Board believes the exemptions are still valid because they were approved prior to House Bill 21 becoming law.
The arguments surrounded House Bill 21
Tarrant County’s attorneys argued that the housing finance corporations only own the apartment complexes in name only, because the property is leased and operated by private developers who then set the rent prices. Many of the apartments, Kratovil argued, do not provide low-to-moderate income housing.
Kratovil said the county lost $1.8 million in taxes on these apartment complexes. The total taxable value of the 28 properties is $974 million in 2025.
Where the county and city attorneys disagree with the Tarrant Appraisal District is that, though clarified by House Bill 21 this year, tax exemptions for housing finance corporations claiming tax exemptions outside of their own city or county was never legal.
Jim Evans, the attorney for TAD, said the statute regarding traveling housing financial corporations, as it existed prior to House Bill 21 permitted such exemptions.
Tiffany Bull, the attorney for Grand Prairie, said that while that may be the interpretation TAD holds, the Appraisal Review Board does not have to follow that interpretation since the legislature clearly outlined that traveling housing financial corporations are not legal.
The Tarrant Appraisal Review Board agreed, 2-1, with Evans.
The county attorneys said they could not yet say if they would appeal the decision.