When Bob Lanier introduced an ambitious housing initiative called Homes for Houston last year, the mayor optimistically projected it would create 20,000 units of affordable housing, both apartments and single-family homes, by the year 2000.
The program was designed to increase the role of private, for-profit developers in construction of low-cost housing. To whet developers' enthusiasm, the city planned to subsidize private development in the inner city with millions of dollars in federal housing funds earmarked to help low-income families secure a mortgage.
But Homes for Houston has been slow to develop into much of an urban renewal program. Some of the blame, perhaps, should be placed on the unreal expectations voiced at its outset, when Michael Stevens, the mayor's dollar-a-year chairman of the quasi-public Houston Housing Finance Corporation, grandly boasted that he'd have 30 houses under construction in the first 60 days of the program.
Before long, that promise had slid by the wayside, until finally the scope of Homes for Houston was broadened to eliminate the requirement that the program's subsidies be directed toward low-income, mostly minority neighborhoods. Coupled with an earlier reduction in homebuyers' mortgage subsidies from $12,000 to $9,500, it was hoped the action would jump-start Homes for Houston's tote board.
The jury's still out on the effects of the program changes. In the meantime, though, the revamped initiative seems to be undercutting the aspirations of community-based organizations, whose advocates say are doing the work but have not been invited to continue sharing in the federal largess.
"They've been stretching out the subsidies to get more numbers, but they're reaching fewer of the people who need them," says Andrea Cooksey, director of the Greater Houston Redevelopment Corporation in Acres Homes. "The people they're reaching are people who can already afford a house."
That's not the way Homes for Houston was designed to work. Shortly after its bold introduction, the program's prospects appeared to soar on the results of a survey funded by the Houston Housing Finance Corporation that showed that a sizable percentage of Houston-area residents earning between $20,000 and $50,000 a year would buy an affordably priced home in the inner city.
Even that presumably good news hasn't translated into a private-sector rush on inner-city lots. And, in fact, the decision to unleash Homes for Houston from its target restrictions has diminished the odds that the program will generate much activity in run-down neighborhoods, let alone those that are in the most need of help.
"The city cut the [mortgage subsidy] allotments, while expanding Homes for Houston citywide," notes Lauri Andress, a consultant to the CDC Association of Greater Houston. "That hurt the CDCs by taking away their clients and taking away any incentive to buy a house in the inner city."
That's exactly what happened to the Greater Houston Redevelopment Corporation's effort in Acres Homes. Cooksey's group received approval two years ago to build 35 homes. With no resources or experience in homebuilding, the CDC hired a private contractor to construct the houses, increasing their sale price. However, a zero-percent mortgage assistance program was available to offset that additional cost, while making it easier to qualify buyers.
In December of last year, 13 families moved into new $65,000 homes on Locksley and Claiborne streets, with mortgage payments of less than $500 a month. Another 16 homes have been completed and are ready for occupancy. But Cooksey can't get anyone from her list of would-be buyers into them because she can no longer promise a zero-percent mortgage. The best she can do is offer a $9,500 subsidy, and even then, the buyer has to come up with 3 percent down.
"We've got homes just sitting now because [buyers] can't get the financing package together," Cooksey says. "I've got a whole list of people who meet the income requirements [for the target area], but can't afford the down payment and closing costs to get the subsidy."
Until recently, the CDCs held their breath and hoped that things would improve. But their patience ran out in late May, when the city's Department of Housing and Community Development reviewed its five-year comprehensive housing plan. Since the plan is the closest thing to a citywide housing policy, and community-based groups had begun to proliferate in the wake of the others' modest results, the CDCs were optimistic the city would recognize their achievements by increasing their funding.
What happened, however, was worse than CDC advocates expected. Unlike in years past, no funding was earmarked to provide seed money to help organize new CDCs. More dire was the elimination of the department's housing rehabilitation program. Along with the obvious benefits to elderly homeowners, the rehab funding could help CDCs go to work, though they might not be ready to build new houses.
The president of the CDC Association, Rick Dyson of Sunny Side Up Inc., responded to the plan review with a terse letter to Margie Bingham, director of the city's housing office. Dyson took the city to task for its apparent decision to hitch its wagon to new, for-profit built housing, at the expense of the rehabilitation program. He pointed out that "many of the new construction efforts," such as the now-expanded Homes for Houston program, aren't geared toward building decent, affordable housing in inner-city neighborhoods.
Bingham's initial response did little to appease the CDC's concerns, but prompted two more rounds of point-counterpoint correspondence with Dyson. From the CDCs' vantage point, Bingham was most offensive when discussing the operating grants. She pointed out that the grants were one-time only and that "evidence of tangible results after a year's time" was expected by the city. Additional funding also hinged on having a project under construction within two years.
Dyson responded that Bingham's expectations were unreasonable and raised "serious concerns" about the city's commitment to nonprofit, community-based housing organizations. And, indeed, even the most productive CDC -- the Fifth Ward Community Redevelopment Corporation -- took more than two years before it had anything to show for its $50,000 start-up grant from the United Way.
Advocates for CDCs say that the city's treatment of them is curious, though not wholly unexpected. Karin Dunn, director of the Heights Community Development Corporation, says that the city routinely withholds federal housing allocations until the last minute before releasing them in a "mad scramble." A case in point was a Second Ward project by a community-based group that was given the go-ahead by the city's housing office two years ago. City Council approval for the project's funding, however, didn't come until April 24 of this year, the day the 1994 federal allocation was due to expire.
"It's bad management," says Dunn. "It's not like they don't know that at the end of April, they have to get rid of it. It creates a situation for Council that you either vote for this or you'll lose the money."
To a person, CDC advocates say they believe Lanier's administration is committed to supplying new low-cost housing, although considering their dependence on the city for even cursory assistance, they might not be expected to bite the hands that feed them.
What they would like, however, is a citywide policy that is consistent with the mayor's rhetoric, while encouraging some of the more successful methods -- even if those don't include the private sector.
Says Karin Dunn of the Heights' CDC: "They've been trying to create a program and force everyone into it, rather than looking at the situation and then coming up with a solution."
-- Brian Wallstin
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