A third of the tax increment contributions contributed by the county will be set aside for future housing projects within Midtown TIRZ, although no specific developments have been approved yet.
Houston and Harris County will reserve a portion of Midtown’s new tax revenues to fund affordable housing through 2050.
The City Council approved an agreement that incorporates the county’s tax share into Tax Increment Reinvestment Zone Number 2, known as Midtown TIRZ.
A third of the increase contributed by Harris County will be allocated to affordable housing projects within the zone’s boundaries. Another 10% will go to the city’s fund that finances housing programs and services for people experiencing homelessness.
The agreement does not approve apartments or specific projects
The measure creates a funding stream, but it does not by itself authorize the construction of housing.
As of July 17 there were no projects, addresses, developers, unit counts, or construction schedules directly tied to the new agreement.
Each proposal funded with the county’s tax increment will need to go through the approval process established between Houston and Harris County.
The agreement also requires reporting, audits, and eligibility criteria for projects using those resources.
Harris County will participate in Midtown TIRZ through 2050
The county’s participation will continue through fiscal year 2050.
The city’s financial materials project Midtown TIRZ could receive about $8.8 million in county increment in the first year and about $273 million for the rest of the agreement.
The amounts are not funds delivered immediately. They are projections subject to property values, tax collections, and economic growth within the zone.
The third-part portion set aside for housing will also depend on the tax revenues actually collected each year.
The funds may only be used within the zone’s boundaries
The projects funded with the county’s reserved portion must be located within Midtown TIRZ’s boundaries.
The zone includes Midtown and other areas incorporated during earlier expansions. Part of its affordable housing work has also reached parts of Third Ward through land acquisitions and development agreements.
The Houston Office of Economic Development maintains maps, budgets, and Midtown TIRZ documents on its official Tax Increment Reinvestment Zone 2 portal.
The zone was created to use growth in property tax revenues for public improvements, streets, services, parks, open spaces, and affordable housing.
How a Tax Increment Reinvestment Zone works
A Tax Increment Reinvestment Zone, or TIRZ, does not impose an additional tax on property owners.
The zone uses part of the future increase in property tax revenue generated when property values rise within its boundaries.
The existing taxable value at the time the zone is created serves as the base. The difference between that base and subsequent revenues can be used to finance projects included in the approved plan.
Houston has participated in Midtown TIRZ since the 1990s. Harris County will now incorporate its own increment through the new agreement.
Part of the money will go to the City housing account
10% of the increment contributed by Harris County will be transferred to Houston’s Homeless Housing Funding Account.
That account can support municipal programs related to affordable housing, housing for people experiencing homelessness, and other projects meeting the city’s requirements.
The portion equivalent to a third will remain set aside for the county’s affordable housing projects within Midtown TIRZ.
The remainder of the revenues may be used for eligible zone-plan projects, subject to review and approval by Harris County.
Midtown also projects investments in parks and mobility
In addition to housing, the financial update contemplates about $76 million for parks and open spaces within Midtown TIRZ.
It also includes projections of $5 million for mobility and drainage, $2 million for public facilities, and $2 million for public art.
These figures are part of the zone’s overall financial plan and do not represent contracts yet awarded for construction.
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Projects will require new approvals
The agreement establishes the framework to receive and distribute the county’s tax revenues, but each project will require additional documentation.
Proposals must meet geographic boundaries, eligibility criteria, audit processes, and county approval.
The city has not set a date to announce the first housing projects funded with these resources.
Harris County’s participation in Midtown TIRZ will continue through fiscal year 2050.
