The Dead Zone

Houston buries its Inner Loop past under bright new shiny Perry Homes town houses

The Greater Houston Builders Association lobbied hard against the measures, and made it clear why: "They stated, to me at least, that the member that they were responding to was Bob Perry," says a former city councilmember, who spoke on condition of anonymity. "[W]hen the GHBA weighs in on an inside-the-Loop issue, it tends to be because Perry wants it."

The density caps ultimately were raised, and the park fund and garage restrictions failed.

If citizens couldn't have a say in the future of their neighborhoods, maybe they could at least protect the past. The next year, the city's preservationists devised a plan to make it illegal to tear down houses in historic districts. Their proposal would have merely put the same kinds of protections in place that other large cities enacted decades ago. It wasn't controversial -- until Perry got involved.

The last of the "little houses" in the Fourth Ward are 
crowded by new Perry town homes.
Monica Fuentes
The last of the "little houses" in the Fourth Ward are crowded by new Perry town homes.
Lynn Edmundson, direction of Historic Houston, says 
older homes can be renovated at a fraction of the cost 
of new construction. But they also come with unique 
hassles.
Daniel Kramer
Lynn Edmundson, direction of Historic Houston, says older homes can be renovated at a fraction of the cost of new construction. But they also come with unique hassles.

As the preservation ordinance navigated public hearings, Robert Miller, Perry's longtime lobbyist, went searching for allies to help him kill the bill. And he found God. Upon Miller's urging, the former city councilmember says, Joseph Fiorenza, bishop of the Diocese of Galveston-Houston, wrote councilmembers to say he opposed the preservation ordinance because it could hamper the Catholic Church's ability to replace old buildings. A succession of freaked-out community groups paraded their fears; county officials even worried publicly that they might not be able to tear down the Astrodome. "I called it carpet bombing," the former councilmember says. "Every time we turned around, Robert would have stirred up another big political club-wielding group, and the whole thing collapsed."

But Perry's ambitions went well beyond City Hall. He had expanded his business into Austin, San Antonio and the Metroplex. And he didn't like what he saw in those cities. In 2001, a private arbitration firm found that he evaded fixing foundation problems on a house near Dallas, and commanded him to pay the owners, Robert and Jane Cull, more than $800,000, including $200,000 in compensation for "malicious conduct." Shortly after getting slapped by the ruling, Perry decided arbitration clauses weren't so great, and he stopped using them, consumer advocates say. Changing gears, he launched a campaign to rewire state government.

Perry and his fellow home builders -- most of them self-avowed small-government Republicans -- decided that the solution to their problems was more bureaucracy. John Krugh, Perry Homes's vice president and corporate counsel, served on a task force that helped the Texas Association of Builders design suggestions for sweeping new legislation. The resulting bill proposed creating a new government agency known as the Residential Construction Commission. The commission would set construction standards and help resolve disputes between builders and home buyers. "When I first read it," says John Cobarruvias, director of the Houston-based Homeowners Against Deficient Dwellings, "all I could think was 'What a total, complete disaster.' "

Almost all of the backers of the bill received gobs of construction-industry money. Perry wrote checks totaling more than $50,000 to six of the bill's eight sponsors and authors. He also donated $265,000 to Texans for Lawsuit Reform, which supported the bill. And he spent more than $100,000 on Austin lobbyists. Perry and Richard Weekley, founder of the tort-reform group and part owner of his brother's David Weekley Homes, watched the debates on the bill from the House's third-floor gallery, which towers behind Representative Tom Craddick's speaker's podium. The seats came to be known in Austin as the Owners' Box.

Not surprising, the bill offered almost no provisions to empower consumers. Before a home buyer could make his builder fix problems in a house, he would be forced to hire a state inspector, who would examine the alleged problem and make a recommendation. The builder or buyer would be able to appeal the recommendation to a three-inspector panel. The process could cost the homeowner up to $650 and take up to four months to complete. Even then, the builder still could refuse to make the repairs, forcing the buyer to sue.

"The consumers were never consulted on this bill," Cobarruvias says. "Not one single time did they ask us, 'What do you think?' It was only later in the process that we were able to give comments, and they didn't care about them at that point anyway."

The bill passed, with scarcely any media attention, on a quiet night in June 2003.

The bonanza for Texas home builders had only just begun. Perry and his wife had donated $375,000 to Governor Rick Perry (no relation) by the end of that summer -- more than any other private donor -- and the governor grandly returned the favor. In September, he appointed Krugh, the Perry VP, to sit on the new nine-person Residential Construction Commission. The commission contained four home builders and not a single consumer advocate.

TRCC spokesperson Patrick Fortner says consumers can expect a fair shake from the commission. Of the small number of claims processed by the agency so far, most resolutions have favored the consumer. And if builders lose, they have to reimburse home buyers for the inspection fees. "We are finding that a lot of the builders are just going out and resolving the problem," he says, "because they know if they don't…they're going to have to pay that fee."

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