A proposal to create a city-sponsored housing authority sparked disagreement among Marble Falls City Council members, with differing views on how the city should address affordable housing and oversee future developments.

The proposal failed in a 4-3 vote on Nov. 3, which came less than a month after the City Council approved an agreement with the Texas Housing Foundation outlining requirements for the organization’s future housing projects in Marble Falls. Council members disagreed over whether the city also needed its own housing authority at all.

Mayor John Packer, Place 5 Councilor Richard Westermann, Place 4 Councilor George Russell and Place 6 Councilor Craig Magerkurth voted against the proposal, while Place 2 Councilor Dee Haddock, Place 3 Councilor Dave Rhodes and Place 1 Councilor Mark Mayfield supported it.

See the full Marble Falls City Council and its members contact information at this link.

The Texas Housing Foundation is a regional nonprofit public housing authority that develops, acquires and oversees affordable housing for low- and moderate-income residents. It funds its projects through private partnerships, housing revenue, tax-exempt bonds and federal housing tax credits, and works with local governments and developers to expand affordable housing opportunities.

Argument for local control and financial benefits

Mayfield, who served as THF’s CEO for 37 years, said a local authority would allow Marble Falls to make housing decisions based on its own needs rather than rely on a statewide organization.

“This is going back to our original roots, right here in the city of Marble Falls, and creating our local housing authority to deal with things that are about the city of Marble Falls and the city of Marble Falls alone. Why would we surrender our sovereignty as a city to do that very thing to a statewide agency,” Mayfield said during the meeting.

Haddock said a local authority would give the city and its Economic Development Corp. another way to pursue housing opportunities.

“In other words it gives the EDC and the city other tools and the toolbox to use when opportunities arise for the benefit of the city,” he said.

He said the proposed authority would operate only within Marble Falls and provide a legal framework for addressing local housing needs, including low-income housing projects.

Disagreement on necessity of a new authority and personal conflict

The city’s recent agreement with THF became a central point of disagreement.

On Oct. 6, the City Council approved an agreement requiring individual council review of future THF projects, including affordability requirements and potential property tax exemptions. Future developments, expansions and property acquisitions also require separate council approval.

“Why now? I mean after the Oct. 6 agreement with the housing authority, that gave us a lot of authority over the next projects,” Magerkurth said during the meeting.

Packer said the city could also negotiate financial benefits through the agreement, including development fees or tax payments in exchange for a property tax exemption.

In a statement to the DailyTrib, Magerkurth said:

“My opposition (to the Marble Falls housing authority proposal) was not to affordable housing, but to creating another governmental entity without a demonstrated need. I was not presented with a business case or compelling evidence that a city housing authority would provide benefits beyond those already available through the Texas Housing Foundation, with whom the city recently entered into an agreement. I believe we should fully utilize that partnership before taking on additional administrative, financial, and oversight responsibilities. If a clear, unmet need is demonstrated in the future, I would certainly be willing to reconsider.”

Westermann pointed to THF’s history with Marble Falls, saying the organization was created to address problems with the city’s former housing authority.

“The Texas Housing Foundation was created to fix the shortcomings of the Marble Falls Housing Authority. I think they’ve done an incredible job for years,” Westermann said. “I see this as a step backwards, not a step forward and I can tell you I’m absolutely not there.”

THF General Counsel Nick Audino suggested the proposal could be seen as retaliation against the foundation because of Mayfield’s involvement and history with the organization.

“This feels like this is some form of retribution against THF,” Audino said.

Rhodes responded by defending Mayfield and addressing his own interactions with Audino.

“We all bought (in on) Mark, we didn’t question him,” Rhodes said. “That’s what changed here. Don’t know you. You want to get personal. When I first became mayor, I made a phone call. I thought we needed to know each other. You haven’t called me back.”

THF CEO Allison Smith also urged the city to continue working with the foundation rather than create another organization.

“I understand the city’s desire for greater control over affordable housing and the financial benefits of development, but I would ask one fundamental question: what problem are we trying to cause that can’t already be solved with the resources and partnerships this community has in place?” Smith said. “Texas Housing Foundation has spent decades investing in this community. We want to continue that partnership. We don’t need another organization simply to create affordable housing.”

The arguments among council members and THF staff lasted around 40 minutes before the motion ultimately failed in the 4-3 vote. 

“Since this issue seemed to be pretty emotional with some on council, I prefer not to comment on it,” John Packer told DailyTrib.

maci@thepicayune.com