Naked City

A Solid Foundation

C. Kent Conine
C. Kent Conine (Photo By John Anderson)

They made their move slowly, tentatively, almost apologetically. But the Texas Dept. of Housing and Community Affairs board members who voted Friday to disband the committee that has overseen the agency's tax-credit housing program and place the full board in charge clearly felt they could no longer remain outsiders.

"I, for one, have yielded to the committee's recommendations time and time again -- but quite frankly, I'm also kind of tired of getting blamed for something I don't think I have materially participated in," board member C. Kent Conine said moments before the vote, referring to chronic allegations that the program has been mismanaged and is possibly tainted with corruption.The day before the board met, Lt. Gov. Rick Perry had instructed the Senate Committee on Intergovernmental Relations to review TDHCA's administration of its housing programs.

The debate provoked tax-credit committee member Florita Bell Griffin -- who is under investigation by the FBI for allegedly pushing through projects that benefited her personally -- to openly declare war on certain board members, alleging that Conine and board chair Don Bethel illegally tried to profit from government-sponsored projects in 1998. Tax committee chair Margie Bingham chided board members, all of whom except Bingham, Griffin, and Robert Brewer voted for the change, for instigating a personal attack.

"Your desire is to eliminate the committee because you have some concerns about its members," Bingham said. But Lydia Saenz, who joined the tax-credit committee last year and has since quietly voiced her discomfort with its actions, replied that the job was too big for three board members to handle. James Daross said he just wanted to know what was going on. "I took an oath to fulfill my duty to the state of Texas," Daross said, but "I don't feel like I've really got a good handle on what goes on in that committee and with the staff."

The distribution of the $200 million in tax credits TDHCA awards to low-income housing developers each year has been controlled almost exclusively by TDHCA staff and a three-member board subcommittee. Though the tax-credit applications are inches thick, the full board typically gives only a cursory review to those recommended by staff and the subcommittee before rubber-stamping its approval. Last year, a handful of projects were added to the recommended list only days before the board voted on them, amplifying cries that the process is infected with favoritism. Bingham has denied that anyone on her committee illegally singled out those projects for approval.

Whether the tax-credit allocation process is truly rigged, or merely relies on selection criteria too complex for lay persons to easily understand, as TDHCA executive director Daisy Stiner has contended, the TDHCA board has taken small but firm steps toward making the process more accountable. In addition to putting themselves in charge of reviewing staff recommendations, the board added language to the program guidelines which more objectively defines whether developers competing for tax credits should be disqualified for compliance problems at pre-existing tax-credit properties. In the past, staff has decided whether violations were serious enough to warrant disqualification, but the new rules set in place a scoring system that kicks out applicants with too many transgressions. The board also lowered the maximum tax-credit allocation any developer can receive in a single year from $2.4 million to $1.8 million.

Dick Kilday, head of the Texas Association of Affordable Housing Providers, a trade group of developers, builders, and banks which has been generally supportive of the program's status quo, said the TDHCA board had acted fairly to tighten compliance without punishing developers for minor infractions. Kilday said he hadn't been expecting the board to take the reins of the tax-credit program, but added he couldn't see that the change would have a big effect, other than making board members a lot more tired.

Reymundo Ocañas, executive director of the Texas Association of Community Development Corporations, a nonprofit builders group, also complimented TDHCA staff for the compliance monitoring system they devised. Reymundo, whose organization represents smaller development entities governed by citizens boards, said the TDHCA board had definitely aided the cause of responsible builders this year, but a lot more needed to be done. The board, for example, did not tackle one of the program's most controversial elements: the routine selection of projects that score lower than competing developments based on the agency's "geographic" or "submarket" criteria, an ill-defined formula that prompts frustrated head-shaking from developers every year. "I'm still perplexed why there is so much resistance to positive change," Ocañas said.

Austin housing activist John Henneberger was less charitable. "The process is still about developers and their needs, not about the people this program's for," he said. "When you have an agency that's this dysfunctional, you can't take baby steps."

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KEYWORDS FOR THIS STORY

Texas Department of Housing and Community Affairs, C. Kent Conine, Florita Bell Griffin, Margie Bingham, Lydia Saenz, James Daross, DickKilday, Texas Association of Affordable Housing Providers, Reymundo Ocañas, Texas Association of Community Develop

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