Fort Worth could get rid of tax break that lets developers skip out on affordable housing
Developers will no longer get a tax break for paying their way out of affordable housing requirements if the Fort Worth City Council approves a change to a neighborhood tax incentive policy.
The proposed change comes five months after the City Council approved a $2.5 million tax break for a south side apartment complex that opted to pay a $357,000 fee rather than provide roughly 71 units of below-market rate housing. By paying the fee, it still gets the tax break.
The city’s Neighborhood Empowerment Zone program allows multi-family developers to get a five year break on their city property taxes provided they set aside at least 20% of the units for affordable housing. The program is meant to boost economic development and promote affordable housing in so-called “empowerment zones,” which are largely in the central city.
The city tweaked the program in 2015 to allow developers to pay a $200 per unit fee rather than set aside the affordable units. Every developer has taken the opt-out since the change was put in place, said Sarah Odle, a development coordinator with the city’s neighborhood services department.
The combination of population growth, rising construction costs and the city not wanting to have neighborhoods segregated by income made it so the opt-out was no longer a viable option, Odle said.
The program is not working, and the city has to be a good steward of taxpayer dollars, she said.
The average rent in Fort Worth is $1,436 per month, according to RentCafe.com. That means a household would need to make roughly $52,000 a year for the rent to be considered affordable.
The city hopes making this change will increase the supply of affordable housing.
The City Council will vote on the measure at its Jan. 23 meeting.
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