The economic hardships spurred by the pandemic revealed the harmful impacts of evictions to the wider public. While many individuals and organizations have worked for years to remedy these issues for our most vulnerable renter households, advocates – including Texas Housers – made huge progress in December 2024 by successfully working with Texas’ state housing agency to establish incentives for Eviction Prevention Plans for hundreds of thousands of subsidized rental units.
The Low-Income Housing Tax Credit program is responsible for creating more affordable rental units than any other source of federal funding. The state property inventory shows that more than 300,000 households live in Housing Tax Credit units statewide. The state’s housing agency, the Texas Department of Housing and Community Affairs (TDHCA), recently released the final 2024 Qualified Allocation Plan guiding the award of Housing Tax Credits in 2024 and setting priorities for what types of developments receive funds.
This new QAP has positive changes that will significantly benefit low income tenants living in future Housing Tax Credit properties across Texas. In particular, Texas Housers and partner organizations successfully pushed TDHCA to include incentives for properties to implement an Eviction Prevention Program.
This new addition to the highly competitive QAP process will give applicants 5 points for implementing a program operated by a case manager that identifies households with past due balances and are at risk of eviction. The case manager can offer these households an opportunity to enter into an eviction holdoff agreement for six months, during which the tenant will resolve past due balances through a payment plan and the property will forgive late fees associated with that balance as long as the agreement is fulfilled. Case managers will meet with households regularly and can identify additional resources such as emergency rental assistance to help the tenant.
Housing instability and evictions are a serious threat for low-income households, even in subsidized housing. Texas Housers has frequently highlighted the negative impacts of eviction, including negative impacts on health and behavioral outcomes and employment and financial stability. These impacts are particularly harmful to families with children and Black households.
Housing Tax Credit tenants sometimes face higher rates of eviction than tenants in market rate properties, particularly in the years leading up to the end of a property’s affordability period (when units can return to market rate), when there are no additional subsidies beyond Housing Tax Credit, and when the property serves families and is not restricted to elderly residents. Texas Housers’ review of evictions in Travis County between 2020 and 2022 found that although Housing Tax Credit properties were not the biggest evictors in the county, they did evict, and in some cases at higher rates than market rate properties. Later this month, Texas Housers will release an analysis of eviction data in Harris County that finds that a Housing Tax Credit property, Heights at Post Oak, has the fourth most evictions of any property in Harris County (295 evictions filed in 2023). Evictions occur at Housing Tax Credit properties and greatly harm low income tenants.
Authors of one study noted that the “subsidy structure” of these properties may not be “…terribly effective at addressing the unstable economic lives of many of their tenants.” Eviction Prevention Programs make progress towards correcting this issue and better serving tenants.
While we applaud TDHCA for taking this bold step to increase stability for tenants and prevent avoidable evictions, we note that there is still room for improvement. In the fall, Texas Housers partnered with a coalition of organizations across Texas to recommend further changes that strengthen the benefit for tenants. Our recommendations (p. 113) include:
- Establish clear criteria for case manager qualifications to ensure that case management is trauma-informed and does not further harm tenants.
- Forbid rent increases during the six-month eviction holdoff period to avoid additional financial strain.
- Remind tenants of due dates to ensure the payment plan is followed and to introduce a measurable requirement for monitoring purposes.
- Cap late fees at no more than 4% of the tenant’s rent share to better align tenant experience with the flexibility provided by mortgage contracts and to ensure that tenants with vouchers or other rental assistance pay late fees based on their share of the rent and not the total contractual rent amount.
- Limit the assessment of late fees to no more than three consecutive months and prioritize rent payments over utilities and late fees to avoid housing instability caused by a cycle of compounding late fees.
- Allow residents receiving Social Security or fixed income payments to pay rent within three business days of receiving their payment without penalty.
We celebrate TDHCA’s addition of Eviction Prevention Programs to the QAP and look forward to making further improvements that protect low income tenants from housing instability.
