Council directs rewrite of Low‑Income Housing Tax Credit policy and issues ‘no objection’ resolutions for four applications

The City Council on Feb. 4 directed the city manager to rewrite the city’s policy for evaluating 9% low‑income housing tax credit (LIHTC) applications and set a 240‑day timeline for a recommended final policy aligned with the city’s regional housing plan. The rewrite will consider a geographic index for location‑based scoring, minimum point thresholds to qualify for city letters of support or letters of no objection, and an option to designate a single city location in a given year for focused consideration.

At the same meeting council also voted to issue “letters of no objection” — documents that add local points when developers apply to the Texas Department of Housing and Community Affairs (TDHCA) — for four 2025 LIHTC applications. The vote on the letters was contentious: a motion to issue no‑objection letters to all four projects passed by a narrow margin, with a 5–4 split and the mayor breaking a tie on a separate related vote earlier in the meeting.

Why it matters: The 9% LIHTC program is the primary federal/state financing route for new deeply affordable multifamily housing. The city’s policy on whether and how to give local support matters because local points and local letters can materially affect which projects receive scarce state tax credits.

What the rewrite will address: Representative Chris Canales, who sponsored the directive, told council the existing geographic “bubbles” used in scoring are outdated and do not reflect current patterns of need. The rewrite should add a “geographic index” that scores locations across the whole city (rather than just tiered bubbles), set minimum point thresholds so only projects meeting certain standards receive city support, and include an option for one year to focus support on a single city‑designated parcel (for example, a city‑owned property). Staff asked for time to align the rewrite with the ongoing El Paso regional housing plan and the council approved a 240‑day deadline for a recommended final policy.

Voting and projects: After the policy directive passed unanimously, council voted to issue letters of no objection for four projects seeking 9% credits in the current cycle: Pebble Hills Place; Pebble Hills Estates; Ridgestone Senior; and Vias at Augusta. Council discussion noted widely varying application scores and competing views about whether the projects’ locations matched city strategic priorities. Several members urged staff to produce clearer criteria and better public guidance for future rounds.

Next steps: The city manager will convene staff to prepare a policy rewrite addressing geographic indexing, minimum thresholds and an optional single‑site year; staff will return with a draft within 240 days and align the rewrite with the regional housing plan. Meanwhile, the four applicants will proceed with their TDHCA applications with the city’s letters of no objection as part of their local scoring attachments.