CORPUS CHRISTI, Tx — The Corpus Christi Housing Authority Board of Commissioners voted Wednesday to halt approximately $435 million in apartment property transactions that critics say would cost local schools, the city, and other public entities millions in lost tax revenue.
The board unanimously paused $235 million worth of pending acquisitions and tabled another $200 million in proposed agreements with the Cameron County Housing Finance Corporation. The decision does not affect $350 million in apartment complexes that have already been purchased by the CCHA.
The vote marked the first major action by three new board members appointed this month by Mayor Paulette Guajardo, one day after the city council unanimously opposed the housing authority's tax exemption practices.
City Manager Peter Zanoni has warned that Corpus Christi could lose up to $7 million in annual revenue from the program, while Del Mar College estimates a $1.1 million yearly impact from properties already purchased by the housing authority.
The program works by having the housing authority acquire apartment complex land at no cost, then immediately lease it back to the original owners while claiming 100% tax exemptions. In exchange, property owners must reserve 50% of units for residents earning 80% or less of area median income, with 10% designated for those earning 60% or less.
"Housing authorities were established to address the legitimate need for affordable housing for low-income residents, the city supports this mission. Under state policy, housing authorities are expected to manage their housing projects efficiently with the goal of providing safe, decent, and sanitary housing for low-income individuals," Corpus Christi City Attorney Miles Risley told commissioners at Wednesday's meeting. "With this latest tax avoidance scheme, however, there is no housing authority management of the units, only the diversion of tax obligations for the benefit of private, out-of-state corporate entities."
He said the projects on the agenda represented an estimated $16.8 million loss in property tax revenues for 2025 alone.
"The Corpus Christi Housing Authority has departed from their laudable mission by their latest activities, partnering with private apartment complex owners to obtain property tax exemptions for privately owned developments," Risley said. "I use the term partnering loosely because the advantage to the private property owners is massively disproportionate to the benefits to the housing authority. The operating agreements under this scheme use legal fictions to shift the financial burdens of providing government services to taxpayers other than the corporate owners of the apartment complexes."
Housing authority CEO Gary Allsup has defended the program as a legal "workforce housing initiative" benefiting teachers, firefighters and police officers.
"Our mission is to enhance housing opportunities for families within our community. In other words, privileged safe, affordable, quality options. In fulfilling our mission, we joined with multi-family apartment developments and created workforce housing, the WHO program, to support local workforce teachers, healthcare workers, first responders, military service, industry employees, and many others to earn 80% or less of our area's median income." Cathy Mehne, the Corpus Christi Housing Authority Board Chairwoman said.
The new board members — former Mayor Joe McComb, former City Council Member Greg Smith, and West Oso ISD counselor Judith Gonzalez-Rodriguez — joined existing commissioners in reversing course on this workforce housing initiative.
“I’d like to make a motion to pause all pending real estate transactions related to the Workforce Housing Opportunity, WHO, including all pending property closures and any new MOU’s," McComb said.
Wednesday's vote follows unified opposition from the Corpus Christi City Council, Del Mar College Board of Regents, Nueces County Commissioners and community leaders.
"We just thought that this was not appropriate, and how that would negatively impact each one of these entities and the fact that the money that would be lost from that, many times would have to be made up through tax increases," Mike Pusley, Nueces County Commissioner for Precinct 1 said.
The Cameron County Housing Finance Corporation, whose proposed partnerships were tabled, has faced statewide criticism for similar tax-exemption arrangements. CCHFC properties in Corpus Christi, including Island Villa, Encore Crossing, and The Retreat, have removed approximately $200 million from tax rolls since 2022.
Risley argued the program ultimately harms those it claims to help, noting that apartment residents "still require the services of all the taxing entities" and "generally need the services of our taxing entities more intensely than most."
The meeting saw some procedural disputes when Board Chairwoman Cathy Mehne attempted to move into executive session without citing any statutory reasons for the closed session. 6 Investigates objected, but the board proceeded with the closed session.
The three new board members also declined to take a ceremonial oath during the meeting, saying they had already been sworn into office.
While Wednesday's actions pause new acquisitions, they don't address the $350 million in properties that have been potentially granted tax-exempt status.
