Is there a place in Houston itself for all the people moving to the Greater Houston area or will the city continue to lose residents and newcomers to the suburbs where there’s more undeveloped and lower cost land?
One way the city of Houston is combating an already high housing demand is by providing affordable housing options and homeowners assistance to attract new and retain long-time residents.
Many of these new residents are coming from places either out of the country or state and have contributed to an increase of 125,000 residents to this region within the last year, making this metropolitan area the second fastest growing in the U.S., according to U.S. Census Data.
For years now, Stephen Klineberg, the founding-director of the Kinder Institute for Urban Research and Professor Emeritus of Sociology at Rice University, has kept track of residents and newcomers and says most of the latest new arrivals reflect the current demographics of Houston; meaning most are minority populations, not white.
This shift to a more diverse population has been ongoing for years as reflected in Klineberg’s annual reports of the city; however, the volume of recent relocations are growing these minority groups more rapidly.
“The influx of new people that are coming to Houston are coming because of the space available, jobs that are in the ‘energy corridor’ or the medical center and other job availability in the city,” Klineberg said.
Keith Bynam, the director of the City of Houston’s Housing and Community Development Department said that Houston needs to keep up with this population growth – which is projected to multiply in the coming years – like other cities and counties in the area.
“I know the overall region (Greater Houston area) is doing a good job at keeping pace, but we’re also trying to keep pace by identifying and creating housing for all those newcomers to find a place in the city,” Bynam said.
One of the ways they are doing so is through their Housing and Community Development Department’s Large Tract Division, which consists of three larger single-family home developments and several smaller single-family home developments.
The smaller projects are scattered throughout the city; however, the larger developments are located near Highway 288 and East Orem alongside Cityscape Avenue, 10301 Stella Link Road, south of Main Street and east of WillowBend Avenue and at Hardy Yard on 850 Burnett and Fulton Street, respectively.
According to Bynam, these developments are a part of Mayor Sylvester Turner’s 3,000 home initiative plan – a plan Turner created to increase home ownership in Houston before his term was up.
“He is trying to keep the people from moving to the “lands,” Bynam said, “The Woodlands, Sugar Land, Pearland, basically any of the suburbs.”
Although the department has a goal of increasing home ownership since Turner’s start in office, they have placed families in over 7,500 new apartment complexes across the city. Currently, the department has 13 multifamily complexes in development to cater to future residents that may prefer or consider apartment-living more affordable over homeownership.
Providing this secondary choice may be what these residents opt for as home sales are trending downward, according to a report published by Insurify, an American insurance online platform.
According to their findings, home sales in Houston decreased from between 2021 and 2022, with 92,333 homes purchased in 2021 and only 77,253 purchased in 2022.
Several of the reasons the study determined for this drop in home sales included increasing mortgage rates, high insurance rates – an average rate of $4,221 for a $250,000 house – and concerns over decreasing property values especially in an area like Houston where houses can be built in a floodplain.
Tanveen Vohra, the editorial manager at Insurify said this drop is opposite of where the housing market was trending the last couple of years, as it was still coming out of the later part of the pandemic when house prices were down and incentives to buy were up.
“There was a huge boom during and right after the pandemic, where home prices and mortgage rates were relatively low, that primed a lot of people to be able to buy homes,” Vohra said. “Now we’re seeing a gradual drop in home values and a rise in mortgage rates, which is why there are fewer home sales this year.”
Home prices have now increased, as the average single-family house in Houston is over $300,000 and this cost can continue to go up depending on where the house is located in the city, Bynam said.
“Trying to keep people in the city limits is challenging, because prices for land and housing inside of the (610) Loop and Beltway (8), whether it’s apartments or single-family homes, are just skyrocketing,” Bynam said.
“Trying to keep people in the city limits is challenging, because prices for land and housing inside of the (610) Loop and Beltway (8), whether it’s apartments or single-family homes, are just skyrocketing.”
To keep price increases of these developments to a minimum, the department has provided infrastructure funds to developers for the installation of utilities – like sewage and plumbing.
These funds help reduce the cost of construction for the builder and developer anywhere between $15,000 to $35,000 per house or lot which in most cases in turn, reduces the overall cost of the home for the homeowner, Bynam said.
The department also distributes funds to these future homeowners to assist in the purchasing process under several programs, two of which are the Homebuyer Assistance Program and Homebuyer Choice Program.
The Homebuyer Assistance program allows Houston homebuyers to be given up to $50,000 to put toward a down payment if they are a first-time homebuyer or have not owned a home in the last three years, their household income is below or at 80 percent of the average median income of the area (varies depending on how many are in a given household) and if the home they are purchasing is taxed by the city.
The Homebuyer Choice program provides a subsidy up to $150,000 on a home purchased through an agreement with the Houston Community Land Trust. Homebuyers qualify contingent on their household income also being at or below 80 percent of the average median income. This program also requires those applying to attend an eight-hour homebuyer education course, obtain a fix-rate 30-year mortgage from an approved lender, have limited debt, maintain at least $1,000 of personal funds at closing and be willing to provide all the legally-required documentation.
These funds can be the difference for a homeowner wanting to buy a house and actually being able to purchase one in the city, Bynam said.
And the department aims to assist those most in need of this affordable housing, like the city’s growing minority populations as well as adults from lower-income families having to go on long commutes to work because the houses they can afford are further from their job sites.
This is why these mixed-income developments are going up in the West, near the energy corridor, as well as in the Northern and Southern regions of the city where there is a lot of job activity and availability, Brynam said.
Brynam said the department has also pinpointed communities that may be uprooting long-time residents because of gentrification in the area leading to a rise in cost-of-living. These multi-generational residents may also be living in low-quality residences that require updated and refurbished infrastructure.
Although the three larger projects are still in the early-development stages, the city is expecting to break ground on them sometime this summer. When these developments are completed, they will total to between 3,400 to 3,500 single-family homes for future and current Houston residents. In addition to these single-family homes, the 13 city-constructed multifamily apartments will create 1,668 available units to those looking to for a rental option.
“We are trying to keep pace with what current and new residents need and I think we are doing a good job. It is very challenging when you have such a large number of people moving in,” Bynam said
This article appears in Jan 1 – Dec 31, 2023.
