13. • Health & Human ServicesTravis County (Travis County)

Consider and take appropriate action to approve a request from the Travis County Facilities Corporation, a Texas public facility corporation created by the Housing Authority of Travis County, for an extension on the HHS 18-month construction notice-to-proceed (NTP) requirement relating to resolutions approved on August 6, 2024, for the following multifamily development projects: the FLATZ 130 Apar

Presented in: Travis County Commissioners Court Voting Session on 2026-05-19

Staff Report & Agenda Item Details

On June 18, 2023, House Bill 2071, as approved by the 88th Legislature, amended Local Government Code Chapter 303, the Public Facility Corporation Act, and established that a public facility corporation (“PFC”) must, among other requirements, request approval from a municipality or county government in which the development is located prior to the authorization of a tax exemption for the project. On July 31, 2024, HHS established an 18-month Construction NTP Rule via memo (see attached, “NTP Rule Memo”) sent to the Housing Authority of Travis County (“HATC”) and the Travis County Facilities Corporation (“TCFC”), requiring that construction on approved projects begin within one and one-half years from the approval of the resolution. The first projects required to comply with the NTP Rule are as follows: <ol start="1" type="1"><li>The Flatz 130 Development – provided a letter per the NTP Rule Memo; the Travis County Commissioners Court (“TCCC”) approved the PFC resolution on 8/6/2024. The 18-month requirement for construction NTP ended 2/6/2026. This project has not started construction and requests more time.</li><li>The Barkley Apartments – provided a letter per the NTP Rule Memo; the TCCC approved the PFC resolution on 8/6/2024. The 18-month requirement for construction NTP ended 2/6/2026. This project has not started construction and requests more time.</li><li>The Barkley Homes – provided a letter per the NTP Rule Memo; the TCCC approved the PFC resolution on 8/6/2024. The 18-month requirement for construction NTP ended 2/6/2026. This project has not started construction and requests more time.</li><li>The Gregg Lane Apartments – provided a letter per the NTP Rule Memo; the TCCC approved the PFC resolution on 8/6/2024. The 18-month requirement for construction NTP ended 2/6/2026. This project has not started construction and requests more time.</li></ol> The Request from HATC/TCFC and the Developers: The request (the reason for this agenda item): HATC/TCFC is asking for an extension on the construction NTP requirement. HATC/TCFC Explanation/Rationale for the Extension: HATC/TCFC’s explanation to substantiate the validity of the request for an extension to the 18-month construction NTP is as follows: “Financing multifamily real estate is currently difficult due to a convergence of high-interest rates, a "wall" of maturing loans from the 2021–2022 boom years, and a severe compression of net operating income (NOI) caused by rising operating expenses and slowing rent growth. Lenders have tightened underwriting standards, requiring more equity and lower leverage, while many properties have dropped in value by over 20% from their 2022 peak. Here are the primary reasons why financing is challenging at the moment: <ul type="disc"><li>High-Interest Rates and Loan Maturities: Properties purchased or refinanced between 2020 and 20