CORPUS CHRISTI, Tx — The Corpus Christi Housing Authority may have violated the Texas Open Meetings Act when it approved controversial workforce housing deals worth $350 million, potentially making those agreements legally invalid, a KRIS 6 News investigation has found.
The housing authority failed to provide adequate public notice before approving the purchase of 13 high-end apartment complexes between July 2024 and March 2025, according to a review of meeting agendas. The deals could remove approximately $7.4 million annually from local tax rolls.
The Texas Open Meetings Act requires government entities to provide written notice that clearly informs the public about subjects to be discussed at meetings. Courts have established that topics of special public interest require enhanced notice.
6 Investigates found the housing authority's meeting agendas provided minimal information. For example, the February 21 agenda listed only "Consider Resolution for MOU - Shadow Bend" and "Consider Resolution for MOU - Ocean Palms Apartment" without additional details. The proposed agreements were not made publicly available before the meetings.
Despite this lack of notice, an attorney representing Azure Apartments argued in a letter to the Nueces County Appraisal District that the complex qualifies for tax exemption specifically because it was "approved at a public hearing of a regular meeting" on December 4, 2024.
The controversial program allows the housing authority to acquire apartment complex land at no cost, then immediately lease it back to the original owners while claiming 100% property tax exemption. In exchange, complexes must designate 50% of units for residents earning 80% or less of area median income (AMI), with 10% reserved for those at 60% AMI.
A document obtained by 6 Investigates reveals the true beneficiaries may be property investors rather than workforce families. An analysis of the Azure Apartments deal projects annual tax savings of $564,636 and a net cash flow increase of $408,459 in year one, with a ten-year benefit to investors totaling $11.4 million.
While rents for some low-income units would decrease, the proposal actually included raising rents for residents in the 80% AMI category in one- and two-bedroom apartments.
"With this latest tax avoidance scheme, 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," Corpus Christi City Attorney Miles Risley told the housing authority board last month.
The housing authority has collected nearly $1.6 million in land lease fees from these properties to date, according to documents obtained by 6 Investigates.
CEO Gary Allsup has described the initiative as designed to provide housing for middle-income workers like teachers, firefighters, and police officers.
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Critics argue the program fails to address the community's most pressing housing needs. The housing authority has more than 30,000 people on its Section 8 waiting list, yet Allsup acknowledges the workforce housing initiative won't help them.
"Affordable rental housing need is by far the greatest among households making 50% of area median income and below, especially 30% and below. These are the populations that housing authorities were created to serve," said Ben Martin, Research Director for Texas Housers.
According to an agenda item posted to the City of Corpus Christi's website on Friday, the City Council will consider a resolution on Tuesday finding the authorization and purchase of these properties void by operation of law.
According to the City Council resolution, the Corpus Christi Housing Authority's (CCHA) property acquisitions are illegal for multiple reasons. The document states that CCHA violated the Texas Open Meetings Act by failing to adequately inform the public that real estate purchases would be considered at meetings, with notices that "failed to adequately inform the public that some action would be considered regarding the purchase of real estate for the housing project."
The City document states that CCHA's CEO exceeded his authority, noting that "under the CCHA Bylaws, 'The CEO may not enter into contracts for the purchase or sale of Real Property without specific Commission Resolution so authorizing,'" yet the CEO proceeded without proper authorization, making the purchases "ultra vires act and is void." Additionally, the resolution finds that the agreements violate Texas Local Government Code Section 392.055 because they "do not limit all units of the Apartment Complexes to rent only to persons of low income" and fail to restrict units to "rooms numbers necessary to provide safe and sanitary housing."
The document characterizes the arrangement as an illegal tax exemption scheme, stating that "each private owner of the apartment complex has the right to compel the transfer of the real property upon loss of the tax exemption," which grants them "equitable title" that disqualifies the properties from tax exemption. The resolution notes that property deeds specifically reserve ownership of improvements to the private companies, stating "GRANTOR RESERVES FOR ITSELF...ANY IMPROVEMENTS, STRUCTURES, BUILDINGS, OR FIXTURES PLACED, CONSTRUCTED, AND/OR INSTALLED UPON THE PROPERTY."
According to the City Council's findings, the structure violates Article III, Section 52 of the Texas Constitution, which prohibits lending public credit to private entities. The resolution states that "the structure of the transactions for Apartment Complexes results in the lending credit of the CCHA, which violates Article III, Section 52 of the Texas Constitution and is therefore unconstitutional."
The document also finds that CCHA failed to meet industry standards, noting that the authority "failed to ensure that the agreements for the Apartment Complexes met industry best practices for analysis and operations of affordable housing including but not limited to conducting market analysis that compared existing rents to affordable rent limits to demonstrate need" and failed to include "provisions for supportive services for those at the 60 percent area median income." The resolution emphasizes that "the Apartment Complexes provided rent at levels below 80% AMI prior to the transactions with the CCHA, and such transactions did not create any new affordable housing for low-income persons."
Del Mar College Regent David Loeb previously told KRIS 6 News that removing property from tax rolls means "every government that gets the tax revenue from those properties now either has to increase the tax rate for everybody else, or cut services—police, firefighters, school teachers."
Online listings for the complexes show many units continue to advertise at market rates despite claims of lowered rents.
Unified opposition from local government entities led the housing authority board to halt additional deals in May. The Corpus Christi City Council, Del Mar College Board of Regents, and Nueces County Commissioners all opposed the program.
The Corpus Christi Housing Authority is a governmental body, created and authorized by state law to develop and operate housing and housing programs for low-income families and is a separate entity from the City of Corpus Christi.
Its board of commissioners is responsible for oversight and that board is appointed by the mayor of Corpus Christi.
Last month, Mayor Paulette Guajardo appointed three 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 voting to pause $235 million in pending acquisitions and table another $200 million in proposed agreements with the Cameron County Housing Finance Corporation.
While the board's May vote stopped new acquisitions, it doesn't affect the $350 million in properties already purchased. The Nueces County Appraisal District has not yet granted tax exemptions for these properties.
If the deals are found to violate the Open Meetings Act, they could be declared void, potentially unwinding the entire program.
