Construction by developers under developer contract.
Houston Code of Ordinances § 47-164
in effectSec. 47-164. - Construction by developers under developer contract.
Subject to the availability of funds allocated for that purpose by city council, the city may share in the expense of construction of the main and other eligible costs by any of the following methods, as applicable, at the option of the developer:
(1) 50 percent reimbursement: Reimbursement to the developer is the sum of 50 percent of the construction cost for water and wastewater main, the balance of oversizing costs, plus design costs for a total reimbursement that does not exceed the maximum contract amount not requiring council approval under the Houston City Charter; or
(2) 30 percent reimbursement: Reimbursement to the developer for 30 percent of the construction cost for water and wastewater main plus the balance of oversizing costs; or
(3) 70 percent reimbursement:
a. For new low or moderate cost single family homes sold to home owners by fee simple deed (single family residences located within the city limits having initial purchase prices as certified by the developer that do not exceed the latest available 12-month listing for median price single family housing in the city as published by the Real Estate Center at Texas A&M University), reimbursement to the developer for the following eligible costs:
(i) 70 percent of water and wastewater main construction costs plus the costs of inspection and construction management,
(ii) 100 percent of related design cost,
(iii) All oversizing costs not reimbursed under provision (i) above,
(iv) Up to a $3,000.00 per lot reimbursement of storm sewer drainage cost, and
(v) The developer's interest cost up to the market interest rate the city's financial advisor determines the city would pay if it issued bonds on the city's water and sewer system on the date the developer contract is countersigned by the city controller.
b. For all other new single-family homes sold to home owners by fee simple deed, reimbursement to the developer for the following eligible costs:
(i) 70 percent of water and sanitary sewer main construction costs,
(ii) 100 percent of related design costs,
(iii) All oversizing construction costs not reimbursed under provision (i) above, and
(iv) The developer's interest cost up to the market interest rate the city's financial advisor determines the city would pay if it issued bonds on the city's water and sewer system on the date the developer contract is countersigned by the city controller.
Reimbursement under this item is not available for off-site main. In addition, the developer must give notice to the department of the commencement of construction of the project and award the construction contract in a manner consistent with the procedures of Chapter 252 of the Texas Local Government Code.
The city shall reimburse the developer for eligible costs upon the completion of at least 25 percent of the total number of housing units required under the terms of the developer contract.
(4) a.
A developer shall not be reimbursed for any eligible costs, including interest, and shall waive any right to claim such reimbursement if the developer fails to:
(i) Obtain a fully executed developer contract prior to beginning construction of the facilities;
(ii) Begin actual construction of the facilities described in the developer contract within 18 months after the date of countersignature of the developer contract by the city controller; or
(iii) Complete construction of 100 percent of the facilities described in the developer contract (and 25 percent of the number of housing units required by a 70 percent developer reimbursement contract) within three years of the date the developer commences construction.
b. The director may extend the contract term, including the time limits set out in subitems a(ii) and (iii) of this item (4) if the developer can show good cause for its delay. The director may extend the developer participation contract term, including the time limits set out in subitems a(ii) and (iii) of this item (4) for a period of three years ("initial extension") for the following reasons:
(i) Serious illness or death of developer or developer's immediate family.
(ii) Local, state, or federally recognized housing sales slowdown caused by economic conditions, such as a depression or recession that affects housing sales in the Houston metropolitan area.
Thereafter, the director may authorize one subsequent extension for up to one more year if, in the director's reasonable judgment, the economic conditions described in subitem b(ii) of this item (4) continue to exist, and the developer has completed construction of the project and at least 25 percent of the housing units, but has been unable to sell the housing units according to subsection 3(a) above. Provided however, the total contract term extension shall not exceed four years, unless approved by city council.
c. In no case shall the city's total combined payments under the original developer participation contract and the development assistance contract exceed the total amount set out in the original developer participation contract. In no case shall the city pay for anything under the development assistance contract that it has already paid for under the original developer participation contract. Funds appropriated for a development assistance contract shall not exceed the remaining funds under the original developer participation contract for the same development.
d. In no case shall the city reimburse the contractor for an amount in excess of the amount set out in the developer contract, which must not ever exceed $1,000,000.00 per contract.
(5) Contingent upon city council's having appropriated sufficient funds to pay for such contracts, the city council delegates to the director the authority to approve and execute the following, using standard forms approved by city council:
a. Developer participation contracts, and
b. Development assistance contracts with a successor developer for a project described in an original developer participation contract upon which the original developer has defaulted, or with the original developer when its default on the original developer participation contract is solely due to its failure to meet the construction or home sales deadlines set out herein.
When a developer participation contract application or a request for extension thereto or a development assistance contract application is administratively complete, but at least ten days prior to approval by director, the department shall provide the members of the city council notice of the scope and location of the proposed project as well as contact information for the developer.
(6) The department shall charge each developer requesting a developer contract application fees stated for this provision in the city fee schedule. Provided, however, the department shall refund the application fee if the developer has submitted a complete application as required by the department and funds are not available within 30 days of the developer's application. No refund shall be given for any other reason.
These application fees shall be adjusted by the department each year effective on the first of April. The adjustment shall be based on the percentage change in the U.S. Consumer Price Index for all Urban Consumers for the Houston-Galveston-Brazoria Texas Metropolitan Area rounded up to the next ten dollar increment.
(7) In the event construction costs not reimbursed by the city are $5,000.00 or more, such unreimbursed cost shall be subject to pro-rata reimbursement as provided in sections 47-168 through 47-170.
(8) In the case of construction of water main, the department shall be responsible for chlorination required by state law prior to use by the city.
(9) Except as provided in subsection (5) above, in the event a developer defaults under a developer participation or assistance contract, the developer shall be barred from any additional developer contract for a period of a year following the default.
(Ord. No. 96-1248, § 1, 11-26-96; Ord. No. 00-171, § 3, 3-8-00; 01-76, § 1, 1-17-01; Ord. No. 05-992, § 4, 8-24-05; Ord. No. 08-307, § 2, 4-9-08; Ord. No. 08-741, § 2, 8-20-08; Ord. No. 2010-184, §§ 2—5, 3-3-2010; Ord. No. 2010-760, §§ 2, 3, 9-29-2010; Ord. No. 2011-1168, § 13, 12-14-2011)
Source: City of Houston, Code of Ordinances and City Charter (Municode Library, library.municode.com)URL: https://library.municode.com/tx/houston/codes/code_of_ordinances?nodeId=COOR_CH47WASE_ARTIVDEUTSYEX_S47-164CODEUNDECOFetched: 10/26/2026