Council briefed on Public Facility and Housing Finance corporations after out-of-city HFC bought local apartments
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Summary
Deputy Director Darren Harris explained differences between a Public Facility Corporation (PFC) and a Housing Finance Corporation (HFC), noted a Valley View property purchased by a traveling HFC and warned of potential 10-year tax-exemption consequences and impending appraisal-board review while litigation continues in other counties.
City economic development staff told the Farmers Branch City Council on Nov. 18 that two corporate structures — Public Facility Corporations (PFCs) and Housing Finance Corporations (HFCs) — can be used to finance public projects, but differ in scope and governance.
Darren Harris, deputy director of economic development, said a PFC is a nonprofit structured to own, finance and build public facilities and may include council members or other public officials on its board. An HFC, he said, is limited to housing-related projects, requires a five-person board with a chair and managing director, and can be used to acquire, construct and finance affordable housing. In materials staff provided, multifamily PFC projects must reserve 50% of units for lower-to-moderate income households (10% lower income, 40% moderate income) for a 10-year period; Harris said that affordability restriction can end after the 10-year term.
Harris raised a specific local example: a Valley View property that staff materials listed as 440 Valley View (the transcript later also references 4040 Valley View), which a traveling HFC purchased and which is now going before the Dallas County appraisal review board on Dec. 3. Staff advised holding any revenue from that property separate because they expect litigation and said the chief appraiser for the Dallas County Appraisal District (DCAD) told the city appraisal staff the district would not approve off-roll tax status while the cases are being litigated. Staff also said recent legislative changes are intended to require HFCs to operate within municipal geographic boundaries once the law takes effect (noted in materials as effective January 2027).
Council members raised procedural and policy concerns. Councilman Neal said the idea of approving new city involvement in residential projects appears at odds with recent council direction to move away from acquiring or rehabbing residential property. Others (including Councilman Riggs) asked to see specific project plans before committing; staff said proposals would be considered on a case-by-case basis if a developer submits a project using an HFC or PFC model.
No formal action was taken; staff and councilors asked for additional research and questions to be compiled for a future session.
Notes on sources and uncertain details: the transcript contains inconsistent references to the property address (440 vs. 4040 Valley View) and uses the term "traveling HFC" when describing out-of-city HFC entities purchasing apartment complexes; city staff recommended holding revenue separate in case courts later rule against the tax status and cited ongoing litigation in other North Texas jurisdictions.
