In a story that blends real estate interests, taxpayer dollars, political intrigue, and legislative sleight-of-hand, recent developments in the Texas House have raised serious concerns about the integrity of the state’s political process—particularly the blurred lines between public service, private gain and Democrat deals that have become a staple of the Texas House.
Before diving into the intricate details of just how bad this Democrat deal is for taxpayers let’s give a big picture perspective.
Housing Finance Corporations (HFCs) are a scam used to get certain developers property tax free deals for 99 years—meaning they don’t pay property taxes on their property and are allowed to pocket all that as extra profit. There has been an ongoing push by taxpayers and critics to end these programs.
A Democrat member of the Texas House of Representatives, who personally profits from HFCs, is trying to save the program but needed to enlist the support of speaker Dustin Burrows and Chairman Cecil Bell.
Now let’s explain:
What Are Housing Finance Corporations (HFCs)?
Housing Finance Corporations are public, nonprofit entities created by local governments to finance affordable housing development and homeownership opportunities for low- and moderate-income residents. Authorized under Chapter 394 of the Texas Local Government Code, these corporations issue bonds and provide financial support for residential developments, including single-family homes and multifamily projects.
HFCs are empowered to borrow money, issue tax-exempt bonds, enter contracts, acquire property, and partner with private or public entities, all without direct voter approval. They are designed to operate independently, and their actions are not considered debt or obligations of the local government or state.
However, HFCs can pose significant risks and costs to Texas taxpayers. Though technically “non-governmental,” these corporations benefit from sweeping exemptions—avoiding property taxes, sales taxes, and franchise taxes—while operating with minimal public oversight.
Taxpayers Pay the Price
Over time, the scope of these corporations have expanded. Many HFCs now operate beyond the boundaries of their original jurisdictions, often funding residential developments in areas where they were not intended to provide housing. This expansion of authority, combined with tax-exempt status, means significant tax revenue losses for local governments. The result is billions in lost taxable value—money that could be funding schools, roads, and essential services—redirected into private hands through the guise of public benefit. All with other homeowners and property owners left to pick up the tab.
This issue underscores a broader systemic failure. Legislators and their financial backers are exploiting a loophole-ridden system, and when efforts to close those loopholes emerge, they are selectively pushed forward or buried, depending on who stands to lose.
Two Bills, One Goal
On February 18, 2025, State Rep. Rafael Anchía—a Democrat lawmaker from Dallas—filed HB 2937, a bill aimed at tightening the geographic boundaries in which HFCs may operate. A straightforward bill in principle, HB 2937 was referred to the House Committee on Intergovernmental Affairs on March 19.
Just a few weeks after Anchía filed his bill, on March 14, Republican State Rep. Cecil Bell—who also happens to chair the Committee on Intergovernmental Affairs—filed HB 1585, an identical bill.
Despite being filed a month later, Bell’s bill was given a lower bill number—HB 1585, and was referred to the committee two days earlier, on March 17. HB 1585 was then scheduled for the committee’s next hearing— a clear sign that the bill was being fasttracked. This legislation could not have been given the low bill number it received without the signoff of Speaker Burrows.
Now why would a chairman expedite a bill he filed after an identical one already existed?
A Strategic Alliance Rather Than Opposition
While it might appear at first glance that Anchía and Bell are at odds, a deeper look at the situation suggests that the two lawmakers might be working in tandem, with Bell carrying HB 1585 as an under-the-table deal. As the Chairman of the House Committee on Intergovernmental Affairs, Bell is positioned to fast-track his bill, giving it priority over Anchía’s original bill.
The timing of the bills, coupled with Bell’s strategic positioning as committee chair, suggests that HB 1585 is designed not as a true reform measure, but as a way for Bell to handle political alliances and protect certain vested interests.
Conflicted Chairs and Quiet Connections
Cecil Bell’s role raises concern when you consider the fact that Bell represents a portion of Montgomery County—a county in which Civitas Capital Group, a politically connected private equity firm—owns property that could be impacted by the very legislation Bell is advancing.
Civitas is no ordinary firm. It was co-founded and is currently managed by Rafael Anchía—the same lawmaker who originally filed the precursor bill, HB 2937. Civitas Capital Group markets itself as an alternative investment manager focused on niche real estate opportunities, including multifamily housing, lodging, and “special situation” assets. One of its key strategies is leveraging public-private partnerships—often through HFCs—to acquire and develop real estate using tax-exempt financing.
According to internal data, Civitas is associated with at least five properties tied to the Houston Housing Authority, with a total assessed value exceeding $136 million and an estimated local tax loss of nearly $2.9 million. One of these properties is located in Montgomery County.
In effect, Bell’s bill could tighten the rules around the kind of deals being made by Anchía’s firm.
Is this a case of one lawmaker trying to close loopholes that another is exploiting? Or is the more cynical answer that this is orchestrated political theater, designed to appear as reform while shielding insider interests?
The Anchía-Civitas Connection
Anchía’s dual role as both lawmaker and managing director of Civitas Capital Group is problematic. Civitas openly boasts about its ability to uncover opportunities that others miss—often involving public-private partnerships and regulatory arbitrage. While the firm’s activity may technically be legal, the ethical concerns are glaring. Anchía helps shape the very laws and policies that govern the industry in which he profits.
As a former Obama administrative appointee, chairman of several House committees and current subcommittee chair, Anchía is no stranger to influence. His involvement in Civitas places him at the epicenter of a financial strategy that hinges in many ways on tax exemptions and jurisdictional loopholes his bill—HB 2937—sought to close.
So why didn’t his bill get the hearing?
The answer may lie in the political choreography that allows lawmakers to appear reform-minded while protecting key allies and business interests. Anchía’s bill never needed to pass—it only needed to exist, to provide cover.
Meanwhile, Bell’s version advances, giving lawmakers the chance to point to legislative action without shaking the foundations of their own connections.
Reform or Replication?
While HB 1585 is being presented as reform, a close read of the text suggests it may actually serve to control competition among politically connected players than to genuinely clean up the system. By placing limits on where housing finance corporations can operate, this bill could conveniently consolidate the power of existing players like Civitas, who already have deep ties and established projects.
Moreover, HB 1585 does not retroactively apply to projects already operating outside their jurisdiction. This grandfathering of existing deals ensures that current beneficiaries—including properties associated with Civitas—remain protected, even as new players are locked out.
Two Lawmakers—and One Broken System
House Bills 1585 and 2937 are not just about real estate, tax exemptions, or obscure legislative committees. They paint a picture about how power is wielded in the Texas Capitol—how public officials with private interests can quietly shape laws that serve their bottom line while presenting themselves as champions of reform.
Cecil Bell, as chairman of the very committee hearing his bill, is using his gatekeeping power to advance legislation that impacts areas near where he represents—and perhaps help shield powerful entities from broader scrutiny, including his Democrat colleagues. Meanwhile, Anchía, whose firm stands to gain or lose depending on how the legislative winds blow, continues to navigate both political and investment worlds.
In the end, Texas taxpayers are left footing the bill—literally—for a housing finance system that’s become a playground for politically connected investors. Whether this legislative session results in real reform or merely another round of insider gamesmanship remains to be seen.
But one thing is clear: sunlight remains the best disinfectant. And the more the public knows about the deals being made behind closed doors, the harder it becomes for lawmakers to continue pretending they serve the people, rather than themselves.
Three Taxpayer Champions Emerge
In committee, Representatives Shelley Luther and David Lowe voted against HB 1585.
Unfortunately Representatives Carl Tepper & David Spiller voted with Cecil Bell and every Democrat to advance the legislation.
Later in a formal meeting on the floor, the committee reconsidered HB 1585, during which Representative Terri Leo-Wilson (who was absent during the original committee meeting) joined with Luther and Lowe in voting against the measure.
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