Two Mile Rule - Senate Bill 493
Current law prohibits the Texas Department of Housing and Community Affairs (TDHCA) from awarding more than one 9% tax credit in the same calendar year if the projects are within two linear miles of one other. The purpose of the law is to limit the concentration of affordable housing developments in minority communities and direct developers to build affordable housing in high-opportunity neighborhoods. Accordingly, these projects can only be constructed within two linear miles in different calendar years.
Senate Bill 493, by Sen. Carol Alvarado and Rep. Senfronia Thompson, will allow the City of Houston to expeditiously rebuild its multifamily housing stock that was severely damaged or destroyed by Hurricane Harvey. Moreover, this legislation will facilitate Houston spending its federal disaster recovery funds by the 2024 deadline.
SB 493 (incorporating HB 1839) grants the Houston City Council authority to waive the two-mile rule after taking an affirmative vote on a project-by-project basis. SB 493 will assist the City of Houston in replacing its severely damaged — and in some cases destroyed -- affordable housing stock rather than concentrating affordable housing in minority neighborhoods.
Houston City Council is comprised of members elected from at-large and single-member districts. Accordingly, council members representing single-member districts will know when neighborhoods in their districts have been rebuilt. Once recovery is complete, Council will resume observing the two-mile rule. The City of Houston fully supports the U.S. Department of Housing and Urban Development (HUD) policy of de-concentrating subsidized, affordable housing in low-income neighborhoods. Further, the Council believes affordable housing should be dispersed throughout the city.
Current law has slowed the rebuilding process and delayed displaced families from returning to their neighborhoods. Staggering the construction of multifamily projects financed with tax-credit dollars could put the City in jeopardy of not spending the $1.17 billion in Community Development Block Grants for unmet housing needs by 2024, thereby possibly triggering a retraction of funding and reallocation to other states.
The City of Houston, under Mayor Turner's Complete Communities initiative, identified five historically underserved neighborhoods which sustained major damage from Hurricane Harvey: Acres Homes, Gulfton, Near Northside, Second Ward and Third Ward. Three of the five Complete Communities boundaries would be impacted. The City has designed and implemented planning processes that align with each community's needs. Out of the hundreds of engagement meetings involving all sectors of the community, an action plan was developed in each area.
Approval and implementation of SB 493 will allow the City to facilitate projects as outlined in the plans and rebuild Houston for the residents who need it most. By making this change in law, we will be able to recover faster and replace the damaged and destroyed housing stock.
The Government Relations team worked closely with state leadership and housing advocates on the language contained in SB 493. The Governor's Office in particular was closely consulted, especially after the veto of Senate Bill 1992 in 2017 when the Governor stated, "Existing law governing the density of subsidized housing in large cities should remain in place, and Travis County should be subject to the same rules as Bexar, Dallas, Harris, and Tarrant counties." The difference in 2019 was the damage to affordable housing and repairs necessitated by Hurricane Harvey's floodwaters that uniquely impacted the City of Houston.
After incorporating all feedback, SB 493 received overwhelming bipartisan support in both chambers of the Texas legislature, passing with votes of 30-1 and 107-26.