CORPUS CHRISTI, Tx — The Nueces County Appraisal District has denied tax exemption requests for apartment complexes in the Corpus Christi Housing Authority's workforce housing program (WHO).
Interim Chief Appraiser Debra Morin told KRIS 6 News that the appraisal district hired outside counsel to evaluate the projects and a determination had been made that the projects did not meet state statute.
The ruling affects 13 high-end apartment complexes in which the housing authority acquired the underlying land between July 2024 and March 2025. The properties, appraised at $350 million, were expected to remove approximately $7.4 million annually from local tax rolls.
When contacted for comment, CCHA legal counsel Jeffrey J. Lehrman said he had not seen any written decision from the appraisal district. Lehrman declined to provide comment related to the authority's planned response, potential appeals, or financial implications, stating that many questions "can only be answered after review of the NCAD decision and subsequent discussions with the CCHA Board of Commissioners and CEO."
He added that several aspects of the inquiry "may involve confidential attorney/client communications" and therefore could not be shared under Texas law.
The appraisal district's decision comes as the housing authority board last week approved hiring specialized legal counsel to conduct an independent review of the agency's compliance with the Texas Open Meetings Act amid ongoing controversy over the deals.
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The workforce housing program allowed the housing authority to acquire apartment complex land at no cost, then immediately lease it back to original owners with the expectation that those owners could then claim 100% property tax exemption. In exchange, complexes were required to designate 50% of units for residents earning 80% or less of area median income, with 10% reserved for those at 60% AMI.
The Corpus Christi City Council unanimously declared the deals "apparently illegal" in June, citing multiple violations including inadequate public notice under the Texas Open Meetings Act.
A KRIS 6 News investigation found the housing authority may have failed to provide adequate public notice before approving the purchases, with meeting agendas providing minimal information.
The housing authority board voted in May to pause approximately $435 million in additional property transactions following unified opposition from the Corpus Christi City Council, Del Mar College Board of Regents, and Nueces County Commissioners.
The Texas Municipal League Intergovernmental Risk Pool notified the CCHA that it would not renew the authority's insurance coverage, citing concerns about the "blended ownership structures" with private developers that create "significant complexities into the risk landscape."
CEO Gary Allsup has defended the program as a legal "workforce housing initiative" designed to provide housing for middle-income workers like teachers, firefighters, and police officers. He has argued it addresses a critical gap for families "caught in the middle" who earn too much for low-income assistance but not enough to purchase homes.
"This is a new opportunity to provide housing for those folks that need it," Allsup previously told KRIS 6 News. "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."
The housing authority has collected nearly $1.6 million in land lease fees from these properties to date.
