Tax Incentives for Builders

When I ran for Houston City Council District A in 2009, one of my platform issues was incentives for businesses and builders who want to bring people, jobs, and money to the City.  Now the City of Houston is doing this… sort of. 

Houston is subsidizing InTown Homes’ new developments north of I10: near TC Jester, South of Hempstead, and west of Sam Houston Tollway.  These developments are all most likely in District A, although the one near TC Jester might end up being in District H (it is not clear from this article the exact location of the developments).  The City committed to reimbursing InTown Homes up to $20 million dollars for putting in public water, sewer lines, storm drainage systems, roads, and parks. 

Subsidies by a city are nothing new, but subsidies are usually given to low income/multifamily housing, not new construction of single family townhomes and neighborhoods.  The idea here is that they are bringing in new homes within city limits that might have otherwise been built in the county.  This will increase revenue in property taxes and possibly sales taxes.  Here are the changes I would make: 

  1. Subsides shouldn’t be given in only one area/council district.  Doing this just makes people wonder if someone is being paid off for something.  I’m not saying anything wrong happened here, but it does make people stop and think.  District A can really use the help, but $20 million dollars in one area might not be the best idea.
  2. Instead of giving incentives to build new homes, they should give incentives for builders who want to rejuvenate existing, old homes/neighborhoods.  There are so many areas in Houston where people don’t want to move to because the houses are run down.  We need developers who will come in and redo a whole neighborhood, and we need to focus our subsidies on these areas.  The housing market is horrible right now.  There are so many empty, foreclosed, and run down houses that need to be fixed.  Developers will always build new homes, but it might take incentives for them to rejuvenate an area.
  3. Living in Houston is great, but shopping in Houston brings in a lot of money too.  We need to also focus our incentives on bringing in new businesses and on companies that want to move to areas, like Spring Branch, that have seen the mass relocation of businesses away from the area over the years.

So to be clear, I don’t think we should offer tax incentives to build new homes in Houston.  We should offer small tax incentives to bring new business here.

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