Officials Launch Legal Review as Millions in Property Value Come Off Tax Rolls
Local leaders are pushing back against the Corpus Christi Housing Tax exemptions granted to the Housing Authority, raising legal questions and budget concerns. While the goal is to expand workforce housing, its financial toll has city, school, and college officials increasingly alarmed.
The Financial Stakes: $3.5M to $7M in Lost Tax Revenue
During a May 13 City Council meeting, City Manager Peter Zanoni warned that property tax exemptions for 13 apartment complexes recently acquired by the housing authority could cost the city up to $7 million in lost revenue.
“That’s a lot of money,” Zanoni stressed. “It’s not a rounding error — it’s real and significant.”
Based on data from the Nueces County Appraisal District, these complexes are collectively valued at more than $330 million. If the tax exemptions stand, this value would effectively vanish from the city’s tax rolls.
Already facing a $7 million deficit for the 2026 fiscal year, the city’s shortfall could swell to $10 million, compounding budgetary challenges across departments like libraries, animal care services, and code enforcement, each operating on annual budgets near $5 million.
Workforce Housing vs. Taxpayer Burden
Gary Allsup, CEO of the Corpus Christi Housing Authority, justified the acquisitions by pointing to the city’s increasing need for workforce housing—affordable options for individuals whose incomes are too high for low-income programs but not enough to cover market-rate rents.
“This is for the public good,” Allsup said. “We’re trying to help those ‘caught in the middle.’”
Apartment complexes must reserve 50% of units for workforce housing—40% for incomes under 80%, 10% under 60% of regional median.
The housing authority gains partial ownership, enabling tax-exempt status, despite not paying for the properties outright. In return, property managers adjust rental rates to meet affordability thresholds.
Allsup said the agency’s revenue from annual lease payments is minimal and is reinvested into other affordable housing initiatives.
Taxing Entities Push Back
Institutions like Del Mar College are bracing for the fallout. CFO Raul Garcia told the Board of Regents that shifting from private to tax-exempt status could cost the college $1.1 million in lost property tax revenue for the 2025–26 fiscal year.
Concerned about the growing budget impact, the City Council passed a resolution authorizing city management to “use all administrative, legal, and legislative means” to challenge the “improper and/or illegal use of property tax exemptions.”
City Attorney Miles Risley stated, “The housing authority’s actions may be illegal — we’re looking into that — but it’s improper.”
Del Mar College’s board also voted unanimously to enlist outside counsel to explore legal options. Questions focus not only on legality but also on whether the public was properly informed or involved in the housing deals.
Allsup maintains that the deals were transparent and approved during public meetings, rejecting any claims of impropriety. “There’s certainly nothing illegal,” he said. “There continues to be a misunderstanding of what the law allows.”
A Shake-Up at the Housing Authority Board
In a move signaling a desire for increased oversight, Mayor Paulette Guajardo appointed three new members to the Corpus Christi Housing Authority board: former Mayor Joe McComb, former Councilman Greg Smith, and West Oso ISD counselor Judith Gonzalez-Rodriguez.
These appointees replaced board members Curtis Clark and Christine Belin, who had sought reappointment.
Guajardo said the new appointments would bring transparency and direction to the agency. “These are outstanding community volunteers,” she said. “They’ll be great assets.”
Allsup, however, expressed disappointment at the shake-up. “I think the previous board has done a great job,” he said, noting that members serve on a volunteer basis.
What Comes Next?
As legal investigations continue and political tension mounts, the question remains: Can Corpus Christi balance its affordable housing goals with the fiscal realities of tax-exempt acquisitions?
“We have to decide,” Allsup said, “does Corpus Christi need workforce housing? If the answer is yes, then we’re doing something meaningful. If the answer is no, we may see different needs in this community.”