CORPUS CHRISTI, Tx — In a move that could significantly impact local tax revenues, the Corpus Christi Housing Authority has acquired 13 high-end apartment complexes worth $350 million in just five months, potentially removing millions of dollars from local tax rolls.
The properties, including The Villas on Ocean Drive, The Icon on Saratoga, and South Lake Ranch on Rodd Field, represent a shift in how the housing authority operates.
According to the authority's CEO, Gary Allsup, this is a "workforce housing initiative" designed to provide housing for middle-income workers like teachers, firefighters, and police officers.
Despite pushback from taxing entities, Allsup maintains the initiative is legal and beneficial.
"This is a new opportunity to provide housing for those folks that need it," he said. "It is for new families. It is for those folks who are caught in the middle. Too many times, we do things for ultra-low income," he said.
Allsup argues that the program addresses a critical gap in housing. "We have over 30,000 people on my Section 8 waiting list for truly low-income assisted housing," he said. "The federal government is never gonna give me anywhere near enough resources to try to deal with that through Section 8 housing. So, one of the things we try to do is determine other ways that we can provide value to the community."
He said this workforce housing initiative will do nothing to address the needs of these 30,000 people on the Section 8 waiting list, but that the housing authority must tackle the problems it can address.
Here's a map of all the apartment complexes in question. Click on them to see their appraised values and taxes due.
The apartment deal structure is intricate: the housing authority acquires land at no cost, immediately leases it back to the original owners, and then claims a 100 percent tax exemption. To qualify, apartment complexes must set aside 50% of their units for people making 80% or lower of the area's median income, with 10% designated at 60% AMI.
When questioned about the financial mechanism, Allsup was direct. "We are now the owners of the property, so they receive a development tax break on the property tax," he said. "In exchange, the properties commit 50% of their units to affordability for those in the middle—those folks that make too much to be on low-income anything but not really enough where they can go out and start buying houses."
David Loeb, a former Corpus Christi City Councilman, strongly criticized the approach.
"$350 million is a gigantic series of real estate transactions in this community," Loeb said. "The tax incentives are designed to help nonprofits and governments actually build housing for very low-income people. They're not designed so that fancy apartment complexes on Ocean Drive do not have to pay taxes."
Loeb warned of broader implications: "Property that's taken off the 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."
Ben Martin, Research Director for Texas Housers, a nonprofit focused on low-income housing, also expressed concerns about the program's effectiveness.
"Especially affordable rental housing is by far the greatest among households that are making 50% of area median income and below, and especially 30% of area median income and below," Martin said. "These are the populations that housing authorities in particular were created to serve."
The $350 million in properties represents a potential property tax bill of approximately $7.4 million.
Allsup estimates the housing authority will receive between $900,000 and $1 million annually from these deals, which he insists is not about financial gain. "We're not trying to get rich," he said.
And while Allsup said the housing authority does not want to create any hardship on taxing entities, he also calls the tax impact a "1% rounding error" in local budgets.
"These agreements might seem like a shock to the system," Allsup said, "but looking to the future, I believe this is good for Corpus Christi's long-term health."
"If 1% of a 3.2% residential valuation increase is a massive cut in budget, that math doesn't make sense to me," he said.
Watch the full interview with Corpus Christi Housing Authority CEO - Gary Allsup
However, Loeb sees it differently. "It's giving one high-end private business a benefit, not adding any more housing actually to the community and distributing the cost amongst everybody else."
The housing authority's plans extend beyond the current properties. Allsup indicates potential acquisition of 20-21 total properties, including discussions with Cameron County Housing Finance Corporation about taking over additional properties it owns in Nueces County. This could potentially increase the total value to over $800 million removed from tax rolls.
This would translate to approximately $17.5 million in annual property taxes that would never reach local government coffers.
Russ Boles, a Williamson County Commissioner who has been battling similar deals with the Cameron County Housing Finance Corporation, was blunt about the strategy.
"The people that need help with lower rents, these projects aren't delivering to these folks," Boles said. "It is, I mean, it's just tragic. It's a money grab."
Allsup defends the initiative as addressing a critical housing need, noting that over 700 families have already participated in the program. He could not tell 6 Investigates how many of these families were new renters.
A review of online listings for these complexes also suggests that, despite claims of lowered rents, many units are still being advertised at market rates.
The Nueces County Appraisal District has not yet received a formal tax exemption application from the housing authority for any of these properties. However, they said that if applications are submitted, the properties will likely qualify for exemption.
