City weighs raising tax abatement rules
Proposal would ask developers for more work safety training
Companies seeking city of Houston tax breaks would be required to give construction workers safety training, advertise jobs to ex-offenders in the city’s re-entry program, provide affordable housing if the project is a residential development and try to hire workers from impoverished neighborhoods and the area around a project, under a proposal before City Council.
The proposed tax abatement guidelines — which the council discussed Wednesday then tabled for a week — also would require companies to choose one of eight community benefits from a list, several of which overlap with the ordinance’s other requirements. Those other requirements include paid internships for low-income students, site designs that aim to reduce crime by, for instance, adding extra lighting, and site improvements that benefit more than the business itself.
Progressive advocacy groups long have pushed Mayor Sylvester Turner to embrace “community benefit” reforms for the city’s tax abatement program, seeking a departure from past subsidies, such as the $75 million spent before Turner’s tenure to lure residential developers downtown, a move that produced no affordable units alongside luxury apartments now renting for upward of $5,000 per month.
Still, some said, the latest proposal does not go far enough.
“We’re excited that the city’s really taking on and looking at the way we give out multimillion-dollar tax breaks, and we’re really encouraged about some of the improvements that are included,” said Laura PerezBoston, campaign director of the Texas Organizing Project. “Overall, it’s really good, but we feel that as long as the city is taking the time to really look at this, let’s do it right.”
The city should strengthen the guidelines, Perez-Boston and other advocates said, by requiring subsidized firms to pay higher wages to workers — not just to construction laborers but to the janitors and retail employees who may work at the completed project.
Sasha Legette, of the nonprofit Workers Defense Project, said her group also wants firms to provide laborers workers’ compensation insurance and for the rules to allow access to job sites for independent verification of compliance with the city ordinance.
Turner said the guidelines before the council are general by nature and that some of the additional requirements the advocates are seeking could be negotiated as individual deals come forward.
“It doesn’t get up to what they’re wanting, but I think we’re making some significant steps in that direction,” the mayor said. “The companies must show they’re doing these things. We’ll monitor to see how things go, and if we need to go further, we will.”
During a brief council discussion of the proposal before it was delayed, Councilwoman Amanda Edwards cheered the proposal’s mention of Complete Communities, Turner’s plan to invest extra resources in five underserved neighborhoods. Projects seeking tax breaks in those areas could qualify for subsidies using lower investment totals and hiring targets than otherwise be required. Council’s concerns
Councilman Robert Gallegos said he hoped the rules could help ensure new development does not speed gentrification, and Councilwoman Brenda Stardig said she is concerned about the new requirements being “one size fits all,” saying she does not want advocates outside her district adding requirements that could delay developments her constituents favor.
Jackie Cornejo, an equitable development strategist with the Partnership for Working Families, a California group that helped pioneered community benefit agreements, said she is concerned some phrasing in the Houston proposal could undercut its goals.
Companies would be asked to make “good faith efforts” to hire workers from poor neighborhoods, from around the project site and from training programs, Cornejo noted, and would be asked to advertise new jobs through the city’s re-entry program but would not be required to actually hire any Houstonian who fits those descriptions.
“In policies where we see requirements, they show they’ve exhausted all efforts to reach that number,” she said. “It’s creating an accountability process by which contractors and subcontractors are actively recruiting.”
Paul Puente, executive secretary of the Houston Gulf Coast Building and Construction Trades Council, said advocacy groups’ pressure on the mayor’s office surely played a role in the updated ordinance, though he said it must continue to improve.
“We need to have transformative, impactful projects today,” he said. “We can’t say, ‘Well, in a couple years we’ll come back to the table and see what happened.’ Let’s do this now, and we’ll come back to the table and see how it worked.” Confusion on proposal
Confusion over what exactly the city was proposing led advocates to hold a Tuesday press conference blasting the guidelines on the steps of City Hall and address the council during its weekly public comment session afterward.
Turner, whose staff said he had not been briefed on the issue that morning, responded to the advocates’ comments by relying on a document his administration had just released outlining the proposed changes in the guidelines — a document that did not align with the draft ordinance attached to the council agenda. That file, which TOP, council staff and others had assumed was the final proposal, required only that companies choose one community benefit from the list of eight options.
Even Andy Icken, the city’s chief development officer who runs the tax abatement program, said Tuesday afternoon that mandating a higher minimum wage or affordable housing set-asides in the guidelines would prevent the city from being “nimble” in negotiating proposals, when the Turner administration had already posted updated documents including affordable housing requirements.
Turner said Wednesday he could not explain the confusion surrounding the proposal but said he long had discussed the issues at hand with the advocacy groups, adding, “These are things I signed off to way before yesterday.”