Houston City Council tightens tax abatement rules

Houston City Council approved changes to the city’s tax abatement ordinance, requiring companies seeking certain property tax exemptions to meet stronger labor standards, including higher wages, health insurance benefits, workers' compensation and stronger worker protections. 

Explained

Houston uses tax abatements to incentivize businesses to invest in the city and hire locally by offering a reduction in property taxes for a specified period. In return, businesses must meet the applicable requirements for employee wages, health benefits and other worker protections. Council member Alejandra Salinas proposed the ordinance. 

Part of the ordinance includes preventing contractors with a recent history of violating Occupational Safety and Health Administration (OSHA) rules or committing wage theft from participating in projects related to the tax abatement. 

Another viewpoint

Council member Fred Flickinger proposed an amendment that would limit the violations ban to OSHA violations that occurred in the region, which includes Texas, Oklahoma and New Mexico.

“If you have a company that has sites all over the country, they may well have a site that they had a problem with,” Flickinger said. “You have another company that’s just a local company here; it’s not an apples-to-apples comparison.” 

Flickinger said limiting it to the region gives a more equitable comparison. 

However, Salinas said contractors come from other states to work in the city, including Louisiana, which is not part of the region but neighbors it.  

“If we want to take the position as the city of Houston that we don’t want to hire people that have safety violations, I don’t understand why it would matter that the violation occurred here in Houston or in Louisiana,” she said. 

His amendment ultimately did not pass, with an 8-8 vote. Flickinger cast the only vote against the ordinance in its entirety.

Also of note

Since 2004, the city has approved only 21 tax abatements, the most recent in December 2025. According to the ordinance, the changes will apply only to future grants.