HUD Cites Houston with Civil Rights Act Noncompliance over Blocking LIHTC Project

HUD Cites Houston with Civil Rights Act Noncompliance over Blocking LIHTC Project

HUD recently sent a letter to Houston Mayor Sylvester Turner stating that it found the city in noncompliance with Title VI of the Civil Rights Act of 1964. HUD asserted that the city’s refusal to issue a Resolution of No Objection for a mixed-income, 233-unit apartment building to be racially motivated. HUD concluded that the city’s procedure for approving proposed projects for financing through the LIHTC program to be influenced by racially motivated opposition to affordable housing, perpetuating segregation.

The Houston Housing Authority (HHA) proposed developing the apartments in a predominantly white, high-opportunity area. HHA had worked with city staff on the project for a number of years. Financing for the proposed project would include $26 million in Community Development Block Grant Disaster Recovery funds, $14 million in LIHTC, and $12 million in tax-exempt bonds.

HUD’s letter noted that after several months of delay, the mayor refused to place a resolution for the apartments on the city council agenda, claiming the cost of the project was too high. But no city funds were involved, and LIHTC projects with similar costs have been approved. In addition, LIHTC projects seeking a resolution are not typically vetted for cost by the city, and the mayor did not recall the city reviewing any other resolutions during his tenure, although 10 resolutions had been successfully issued over that period.

HUD found that Houston does not consider LIHTC projects using objective metrics or systematic assessments; instead, the city defers almost entirely to neighborhood opinion. HUD’s letter outlines eight remedies for Houston to address. If the city does not arrive at a Voluntary Compliance Agreement, HUD indicates that it will initiate administrative proceedings or refer the issue to the Department of Justice for judicial enforcement.