After years of steering clear from tax increment reinvestment zones, Harris County is getting back into the controversial practice with commissioners aiming to push housing and specific development projects for their precincts.
Commissioners Court agreed without discussion last week to enter agreements with the city of Houston on four existing tax increment reinvestment zones that will focus on revitalization of the Gulfton and Sharpstown neighborhoods and improvements and upkeep to Buffalo Bayou East. Houston city council is expected to vote on the agreements later this month.
The county, which used to be a Republican majority, had stopped participating in the reinvestment zones because previous commissioners said it created a lack of transparency and would end up costing taxpayers more, former Precinct 3 County Commissioner Steve Radack said.
“It becomes very complicated and some people just try to take them over (TIRZs) and do what they want to see done and not necessarily what will have the greatest impact on the community,” Radack said. “Some people can argue it is a backdoor into getting money to spend on roads and drainage and a way to get money without adding an extra burden. But you still have to pay into it and don’t have much control.”
Commissioners, however, said joining the zones will drive improvements that will benefit the constituents in Precincts 1, 2 and 4.
Tax increment reinvestment zones, or TIRZs, freeze property tax revenue at an agreed-upon level inside the zone. The amount of tax revenue collected beyond that level, called the increment, is then funneled back into the zone to pay for improvements with the goal of attracting additional development and raising property values.
Houston, which tops the state with the most tax increment reinvestment zones, long has drawn criticism for its extensive use of the special districts.
Supporters say improvements to roads, utilities and beautification projects encourage further private development. Critics say the zones – originally created as a way to rejuvenate blighted areas, and later to aid in the development of affordable housing – often miss the mark.
A Houston Chronicle investigation from last year found the zones often lock tax money in affluent communities like Uptown while underdeveloped areas struggle to fund basic projects. And until this summer, there was no formal policy in place for creating, expanding and disbanding the development zones.
Steven Craig, a professor of economics at the University of Houston, said the zones can be helpful in trying to bolster neighborhoods but they often come at the cost of transparency. The zones generally are overseen by an appointed board of directors, he said, which means there is no direct way for someone to oppose who runs them since they are not elected.
“It’s not well designed for good governance,” Craig said.
“It has been typical for the previous Harris County government not to be as innovative as the city has been for the uses of the TIRZs,” Precinct 2 Commissioner Adrian Garcia said. “There is a correlation with having two former city council members serving as county commissioners.”
Precinct 1 Commissioner Rodney Ellis was on City Council when Houston created its first tax increment reinvestment zone in 1990 near the Galleria.
Garcia said utilizing the reinvestment zones will further help his program, Revive2Thrive, which aims to invest in infrastructure and create more economic growth throughout the precinct. The commissioner acknowledged the zones have been polarizing in the past, but said he plans to keep a close eye on the progress and investments made.
“It’s a good instrument. It does have to be watched and that’s something I intend on doing,” he said.
Aside from helping fund and maintain the upkeep of the Buffalo Bayou East project, which aims to build parks and trails east of downtown, Garcia said he also hopes to revamp parts of the Aldine neighborhood through a Harris County TIRZ that was established earlier this year, though no specific projects have been decided.
The Buffalo Bayou East project also overlaps with Precinct 1. Ellis said in a statement that he is “committed to ensuring that transparency and equity are at the forefront” with TIRZ 18 and 23.
“I believe that as long as we have a clear understanding of where the funds are allocated and the benefits are channeled to the communities that need it most, we can use TIRZs as another tool in our toolbox to deliver quality greenspace and equitable infrastructure to every corner of Harris County,” the statement read.
Luis Guajardo, director of planning and community development for Precinct 4 Commissioner Lesley Briones, said the hope is that by joining the St. George Place and Southwest Houston redevelopment authorities, they will be able to bring affordable housing and other development opportunities to the Gulfton and Sharpstown neighborhoods.
Guajardo said a third of the increment, an estimated $120 million, will be allocated for affordable housing between now and 2040, when the agreement is set to expire.
“We acknowledge that TIRZs have had their share of controversy,” Guajardo said. “But I think what you’re starting to really kind of see here is a focus on the county being thoughtful, and that when we do this, we’re really trying to use it for a public purpose, like housing.”
Briones, who was not available for an interview, said in a statement that participating in the zones helps “maximize public-private partnerships” and will allow revitalization at Burnett Bayland Park and Bayland Park and to improve sidewalks and drainage. She said it also will help create “critical infrastructure investments.”
“Residents of Gulfton, Sharpstown and other areas within TIRZ 1 and TIRZ 20 have long awaited improvements to their communities,” the statement reads. “With Precinct 4’s involvement, we will be in an even better position to further advocate for and invest in the vitality of the area, its stable and affordable economy, and improved quality of life of its residents.”
Naina Magon, a Principal at Hawes Hill & Associates LLP, a firm that helps oversee several of the zones, said it is a “win for everyone” that the county is participating again.
“It’s been a while since they’ve been involved,” she said. “But it’s amazing what we can do together while leveraging resources.”