TX HB3532

Removes school districts from the list of entities that can serve as sponsors for public facility corporations that create multifamily residential developments with property tax exemptions

Defines "rent" to include all recurring fees required for occupancy (including common area charges) but excludes optional fees like pet fees, storage, or covered parking; defines "rent reduction" as the difference between actual rent charged for income-restricted units and what could be charged at market rates

Requires acquired developments (occupied at acquisition or within 2 years prior) to reserve at least 10% of units for lower income housing and 40% for moderate income housing, with at least 15% of acquisition costs spent on rehabilitation within 3 years; alternatively, 25% of units must be reserved for lower income and 25% for moderate income households

Establishes ongoing rent reduction requirement: annual rent reduction on income-restricted units must equal at least 60% of the ad valorem taxes that would otherwise be owed, with tax exemptions revoked if this threshold is not met

Mandates annual compliance audits submitted to the Texas Department of Housing and Community Affairs and local appraisal districts by June 1 each year, with the department publishing findings and providing noncompliance notices; developments owned as of September 1, 2025 must comply beginning with the 2028 tax year