TITLE 10. COMMUNITY DEVELOPMENT
PART 1. TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
CHAPTER 10. UNIFORM MULTIFAMILY RULES
SUBCHAPTER
J.
The Texas Department of Housing and Community Affairs (the Department) adopts, without changes to the proposed text as published in the April 24, 2026 issue of the Texas Register (51 TexReg 2555), an amendment to 10 TAC Subchapter J, Housing Finance Corporation Compliance Monitoring, §10.1204 Audit Requirements. The rule will not be republished. The purpose of the amendment is to bring the rule into greater harmony with HB 21 (89th Regular Legislature). HB 21 tasks the Department with the compliance monitoring oversight of all Housing Finance Corporation (HFC) multifamily residential developments.
In §10.1204 relating to Audit Requirements, the rule requires that a Rent Reduction calculation be performed that identifies the difference between the annual Rent charged for each Restricted Unit and the estimated annual Maximum Market Rent that could be charged for such units if they were not restricted.
On March 17, 2026, TDHCA received comment from stakeholders and members of the Texas Legislature challenging the propriety of the rent reduction calculation distinction in cases of Housing Choice Vouchers, and stating that it fails to comport with the statutory definition of "rent." Furthermore, they purport that failing to remove this distinction will jeopardize the "real, measurable benefits to Texas renters and taxpayers" of having reduced rents at HFC developments. These challenges to a single sentence in rule (distinguishing how voucher-supplemented rent is considered for audit purposes) have been raised as a requirement under state law, as well as creating imminent danger to the welfare of Texans seeking affordable rents in HFC developments under HB21. TDHCA accepts the concerns raised and finds the amendment is justified.
The rule revision was proposed to ensure that in the case of units assisted with vouchers, the HFC User is only being attributed their actual rent reduction contribution and not the contribution of the public housing authority supporting the voucher.
Tex. Gov't Code §2001.0045(b) does not apply to the new rule proposed for action because it is necessary to implement the requirements of legislation, HB 21.
The Department has analyzed this new rulemaking, and the analysis is described below for each category of analysis performed.
a. GOVERNMENT GROWTH IMPACT STATEMENT REQUIRED BY TEX. GOV'T CODE §2001.0221.
Mr. Robert Wilkinson, Executive Director, has determined that, for the first five years the amended rule is in effect:
1. The amendment does not create or eliminate a government program but clarifies a provision relating to audit requirements.
2. The amendment will neither increase nor decrease the number of employees of the Department.
3. The amendment will not require additional future legislative appropriations.
4. The amendment will not increase or decrease fees paid to the Department.
5. The amendment is not creating a new regulation but amending an existing regulation to bring the rule into greater alignment with the requirements of HB 21.
6. The amendment will not limit or repeal an existing regulation.
7. The amendment will not increase or decrease the number of individuals subject to the rule's applicability; and
8. The amendment will not negatively or positively affect the state's economy.
b. ADVERSE ECONOMIC IMPACT ON SMALL OR MICRO-BUSINESSES OR RURAL COMMUNITIES AND REGULATORY FLEXIBILITY REQUIRED BY TEX. GOV'T CODE §2006.002.
1. The Department has evaluated this amendment and determined that none of the adverse effect strategies outlined in Tex. Gov't Code §2006.002(b) are applicable.
2. The Department has determined that there will be no economic effect on small or micro-businesses or rural communities because these rules apply to all Housing Finance Corporation multifamily residential developments equally and this amendment revises how a particular calculation is determined.
3. The Department notes that the amendment will make satisfying the public benefit test more difficult than the prior version of the rule (for those Developments with voucher holders), but the prior version was not required by statute. As stated in the referenced letter, the longer the voucher distinction remains in rule, the greater the perceived financial effect would be on HFC developments.
c. TAKINGS IMPACT ASSESSMENT REQUIRED BY TEX. GOV'T CODE §2007.043. The amendment does not contemplate or authorize a taking by the Department; therefore, no Takings Impact Assessment is required.
d. LOCAL EMPLOYMENT IMPACT STATEMENTS REQUIRED BY TEX. GOV'T CODE §2001.024(a)(6).
The Department has evaluated the amendment as to its possible effects on local economies and has determined that for the first five years the amendment will be in effect the amendment does not create a local employment impact except a potentially more accurate reflection of rent reduction at HFC developments.
Tex. Gov't Code §2001.022(a) states that this "impact statement must describe in detail the probable effect of the new rule on employment in each geographic region affected by this new rule…" Considering that no impact is expected on a statewide basis, there are no "probable" effects of the new rule on particular geographic regions.
e. PUBLIC BENEFIT/COST NOTE REQUIRED BY TEX. GOV'T CODE §2001.024(a)(5). Mr. Robert Wilkinson, Executive Director, has determined that, for each year of the first five years the amendment is in effect, the public benefit anticipated as a result of the new rule will be to provide a rule in greater harmony with HB 21 and ensure that when calculating rent reductions the public benefit is attributed accurately to a HFC development.
f. FISCAL NOTE REQUIRED BY TEX. GOV'T CODE §2001.024(a)(4). Mr. Wilkinson also has determined that for each year of the first five years the amendment is in effect, enforcing or administering the amendment does have some foreseeable implications related to costs or revenues of the state or local government.
SUMMARY OF PUBLIC COMMENT. The Department requested comment on the amendment and also requested information related to the cost, benefit, or effect of the amendment, including any applicable data, research, or analysis from any person required to comply with the proposed rule or any other interested person. The public comment period was held April 24, 2026 to May 24, 2026, to receive input on the proposed action. Comment was received from two commenters and the comments are responded to below. Commenters: (1) Representative Gary Gates and (2) City of Austin.
Comment: Representative Gary Gates is in support of the amendment and appreciated the Department's willingness to review the issue he had raised in prior comment to the Department. He commented that the proposed amendment appropriately ensures that the full rent charged on a unit is considered in the calculation. He noted that the proposed rule reflects both the text and legislative intent of House Bill 21 (89th Regular) and promotes consistent transparent compliance monitoring standards for Housing Finance Corporation multifamily developments across Texas.
Department Response: The Department appreciates the support and the amendment is recommended for adoption without changes.
Comment: The City of Austin understands the legislative position on the rent reduction calculation in the case of vouchers, but is concerned with the implications on supportive housing properties owned by HFCs that are not financed by housing tax credits. They note that these properties are primarily or entirely subsidized by vouchers dedicated to supportive housing, and those vouchers combined with the property tax exemption are a critical component of the financial operations of the property. They comment that the amendment to the rule jeopardizes the operation and sustainability of supportive housing. They do note that they realize this issue ties to the statute and may be out of the Department's purview to correct.
Department Response: The Department understands the noted concern, but as identified by the commenter, their concern would need to be changed statutorily. To ensure harmony with the statute as is, no changes are made in response to this comment.
STATUTORY AUTHORITY. The amendment is adopted pursuant to Tex. Gov't Code §2306.053, which authorizes the Department to adopt rules.
Except as described herein the amendment affects no other code, article, or statute.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on June 4, 2026.
TRD-202602299
Bobby Wilkinson
Executive Director
Texas Department of Housing and Community Affairs
Effective date: June 24, 2026
Proposal publication date: April 24, 2026
For further information, please call: (512) 475-3959