Senate Bill 8 98, carried by Senator Juan Hinojosa (Senator Blanco laid it out in committee), would increase the statutory cap on per‑development awards of 9% Low‑Income Housing Tax Credits from $2,000,000 to $3,000,000 to compensate for construction inflation and rising costs.

Bobby Bolling, a developer from El Paso, and others representing the Texas Affiliation of Affordable Housing Providers argued that a larger per‑project cap would create economies of scale, reduce per‑unit construction costs, and allow more units to be produced in single developments. They said the current $2 million cap has not been updated since 2011 despite large increases in construction costs and inflation; witnesses cited a 43% inflation increase and a 69% increase in multifamily construction costs since the cap was set.

Opponents, including Foundation Communities, Texas Housers and other preservation advocates, warned that the state’s overall allocation of tax credits would not grow simply by raising the per‑development cap. Those witnesses said a fixed statewide pool divided among larger per‑project awards would likely award fewer total projects in a given funding round and could reduce the number of communities that receive credits — including preservation projects that renovate existing affordable properties.

Tracy Fine of National Church Residences said preservation projects cannot increase unit counts and therefore would not benefit from a larger award; tougher competition for a static pool could reduce preservation awards. Ben Martin of Texas Housers called the cap increase a reallocation of the same credit pool that could result in fewer projects statewide even as some projects get more resources.

Senators invited comment on possible mitigations, such as exempting preservation or at‑risk set‑asides from a higher per‑project cap or giving the state board rulemaking discretion to set caps by region or set‑aside. The committee closed public testimony and left the bill pending for further consideration.

Ending: Lawmakers asked TDHCA and stakeholders for additional modeling showing how changes to the per‑project cap would affect the number of awards and units statewide; committee left SB 8 98 pending.