Business
McKinney weighs tax break for 394 all-affordable apartments
The city would forgo about $3.1 million in property taxes over 10 years for an all-affordable apartment complex in southwest McKinney.
McKinney’s City Council took up a resolution September 15 backing a property tax break for a 394-unit apartment complex in which every unit would rent below the going market rate.
For renters, the deal is meant to hold rents down. City documents estimate the project would save tenants about $6 million in rent over 10 years. For taxpayers, the city would give up about $3.14 million in property taxes over that same decade, according to the city’s scorecard. The applicant’s own estimate puts the city’s share at about $3.46 million, starting near $216,000 in the first year and rising to about $409,000 by year 10.
The development, called Torrington Terry, is planned for the southwest quadrant of the city near US 380 (University Drive) and Hardin Boulevard. The developer is Jefferson Terry (Phase 2), LLC, part of the Dallas-area builder JPI. The tax break comes through a partnership with the McKinney Housing Finance Corporation, a public entity that can own housing to make it exempt from property taxes.
The resolution itself is a statement of support for that partnership. It was listed on the council’s consent agenda, the part of the meeting reserved for items expected to pass together without separate debate unless a council member pulls one.
All units would be reserved for households earning 30% to 70% of the area median income, a federal income benchmark. The council’s resolution and the city’s scorecard put the project at 394 units: 21 for households at 30% of that median, 335 at 60% and 38 at 70%. The developer’s application describes 386 units, split 20, 306 and 60.
The rent gap is largest at the lowest income tier. City reference tables put the maximum monthly rent for a one-person household at 30% of median income at $580, against a market rate of about $2,200 for a one-bedroom in the 75071 ZIP code.
Public money flows both ways in the arrangement. The housing finance corporation would collect about $1.38 million in lease and compliance payments over 10 years, plus a one-time payment of about $1.33 million after an initial 15-year compliance period, when the property is expected to be sold.
The applicant says the project would be built under the federal low-income housing tax credit program and would sit next to an existing JPI affordable community built with the McKinney Housing Authority.
The city’s role here is a resolution of support. The application still faces further review by the housing finance corporation before the project moves ahead. Residents can follow the item and future action through the meeting materials on the City Council agenda.
Your friendly neighbor, T.