Tax Breaks for What?: A Community Report on the City of Houston’s Economic Development Deals

On July 6, 2017, Houston4All partners from the Texas Organizing Project, SEIU Texas, the Sankofa Research Institute, the Texas Gulf Coast Area Labor Federation, and the Workers’ Defense Project gathered at the River Oaks District shopping center to release a report on Houston’s tax incentive programs. Also present were representatives from Rice University, IUPAT88, Texas Low-Income Housing and Information Services, LiUNA, Harris County Commissioner Ellis’ office, the Harris County Labor Assembly, and Houston Unido.

The report “Tax Breaks for What?: A Community Report on the City of Houston’s Economic Development Deals” looks at the 39 projects that received tax breaks through the Chapter 380 and tax abatement programs between 2004 – 2016. The report asks what is the return on investment for struggling families and neighborhoods for these tax giveaways and what are the City’s values and priorities that these projects narrate.

Key findings include:

  • Lack of proactive strategic economic development goals
  • No regular reporting neither on basic compliance nor measures of equity
  • Cost per job promised: $74,971 (approximately 10x higher than Dallas and Austin’s cost per job promised)
  • The majority (56%) of projects do not include a promise to create even 1 new job
  • The City failed to include basic job standards such as higher wages or benefits for project employees, local hire and second chance hiring
  • Of the 5,480 housing units, the City did not require developers to set aside even one unit as affordable housing
  • The City failed to estimate the projected incentive value for more than 1 in 4 subsidized projects
  • No overarching requirement for public hearings in advance of a council vote on a project
  • Multiple community-initiated lawsuits involving city-subsidized developments
  • Weak enforcement

The report also includes:

  • Public policy recommendations for the City of Houston
  • Best practices from around the Lone Star State in economic development
  • A community report card
  • An overview of the 380 and tax abatement programs
  • A spreadsheet of basic information on all 39 projects; and
  • An interactive map of the 39 projects with details on the incentive value, recipient, new jobs promised and other information

Learn more about the city-subsidized projects with this interactive map built by January Advisors.