Five years ago I moved to the greater Houston Heights area, and since then, what has happened to my neighborhood, and all of the west side of the Inner Loop, has been fearsome to behold.
Over much of that time, I worked downtown and rode my bike to and from the office. The trip was five or six miles each way, depending on the route, but no matter which way I went, the scenery changed month by month, season by season. And the change was always toward bigger, denser, costlier, and more. Before oil hit the skids last fall, there was more residential construction going up in the Houston metro region than in all but two U.S. states. “What used to be here?” I found myself wondering frequently, passing yet another fenced-off construction zone.
I could pedal due east and traverse Lawrence Park, one of a couple of historically black enclaves carved out of the Houston Heights. Until recently it was a warren of narrow, ditch-hemmed streets lined with hundred-year-old bungalows, some of which appraised for less than $50,000. It was the kind of neighborhood with cookouts every Saturday and joyful gospel on Wednesday nights and Sunday mornings, and it wasn’t uncommon to see beer-sipping old men slapping down dominoes on front-yard card tables.
Today it is a warren of narrow, ditch-hemmed streets lined with brand-new two-story town houses perched atop front-facing two-car garages, with asking prices of $400,000 and up. There are fewer cookouts, and you are more likely to see adults playing kickball in the park than old guys smacking down bones in their yards. In September of this year, the cheapest available property here was a teardown listed as a foreclosure for $248,000. In 2011 the same property was officially appraised at $36,000.
It was on the eastern edge of this neighborhood that I saw one of the most classically Houston real estate business phenomena ever. Not far from Yale Street and adjacent to a large vacant lot, a small-time developer bought and knocked down a few old bungalows and replaced them with a line of town houses. Before anyone moved in, Trammell Crow Residential bought and demolished them to make way for one of two upscale mid-rise apartment complexes now sprawling over the site. The 730 new units added to the already-cramped neighborhood—the city has done little or nothing to alleviate traffic on increasingly overburdened Yale Street—are renting for between $1,500 a month, for a 630-square-foot one-bedroom, and $2,860, for a plush two-bedroom.
Sometimes on my bike rides I would hump it south across a charred old railway trestle (since dynamited and redone as a concrete-and-steel hike-and-bike bridge over White Oak Bayou) through Cottage Grove. Even by 2010, that erstwhile barrio, one very reminiscent of Austin’s gentrifying East Side, was far along in its transformation. In 2000 it had all been low-slung cottages behind wrought-iron fences guarding chicken-pecked yards. Today it is a shadowy maze of canyon-like streets darkened by high stucco walls of three- and four-story townhomes, sometimes six to a lot.
Though it is one of the Inner Loop’s noisiest neighborhoods—it is bisected by both the Katy Freeway and a busy section of train tracks—even there it’s hard to find a bargain today. I did find a teardown on Zillow. The asking price for the 5,856-square-foot lot a few feet from the train tracks? $325,000. If you prefer, you could also pony up that tidy sum and move into the 85-year-old, 1,100-square-foot house, with its window units and single bathroom.
And so it goes with every once affordable neighborhood west of downtown: Rice Military, the West End, Shady Acres, the First and Fourth wards, Montrose, and anything with the name “Heights” attached. These neighborhoods were once patchworks of rich, poor, and in-between; bohemian and square; black, white, and brown. Now, if you are looking for a place with room to start a family, you’ll need a minimum of $300,000 to find anything remotely move-in ready in any of those neighborhoods. Or if you seek the full Norman Rockwell experience—a detached house with a yard—you’ll need at least $500,000.
That is certainly the case in my neighborhood. Adjacent to the Heights but two generations removed, Timbergrove Manor was built in the fifties as a Texan Levittown: one-story brick ranchers, imperfectly shaded by the tall pines that give the neighborhood its name.
Back in 2005, just as the area’s original owners were aging out and moving on, my wife and her ex-husband bought a 2,200-square-foot three-bedroom, three-bath for under $200,000. Today remodeled Timbergrove houses very much like ours are listed with asking prices of more than $500,000. We’re also starting to see a McMansion invasion, and those homes are topping $1 million. All this, even though we are not in the boundaries of one of Houston’s elite public schools.
Which would be fantastic if we were looking to move and could find a similar deal somewhere—anywhere—else in Houston proper. But the same skyrocketing prices prevail. You sell into a hot market, you buy into a hot market. And while all our equity looks great on paper, keeping up with the yearly property tax increases is an ever-growing burden.
It’s not just Houston, of course. The same high prices prevail in San Antonio, Dallas–Fort Worth, and Austin. All summer long the headlines rolled in: “San Antonio Home Prices Pass $200,000 Landmark,” “Home Prices as High as the Temperature in Dallas,” “Austin Home Prices Hit All-Time High,” and “Houston Home Prices Heat Up, but Future Looks Shaky.”
Ah, yes, the elephant in the room, the broken guitar string foreshadowing the doom of Chekhov’s Cherry Orchard. Even as all these home prices have been gushing ever higher, the price of oil has been nosediving toward levels reminiscent of the dark days of 1986, the annus horribilis for twentieth-century Texas. Near-historic-low oil prices and all-time-high housing prices seem to make as much sense as a cardiologist’s authorizing a patient to compete in a triathlon shortly after failing a stress test.
Bulls, like Forbes, continue to tout the four largest Texas cities as among the hottest for investors in America. Bears, like Fitch Ratings and Corelogic, warn of an impending correction, declaring the same cities among the ten most overvalued in America. This year, within a few short months, Austin topped Forbes’s lists of both the best market for investors and the most overvalued, a circle the editors tried to square thusly: “Nobody is saying that Austin or Houston would be a bad place to buy these days. They just might have been a better place to buy a couple of years back.”
Why are housing prices so high if oil prices are so low? Is the Texas economy as diversified as the real estate bulls would have you believe? If not, who is buying all those expensive houses? And given that not everyone in Texas is J. R. Ewing or even Cliff Barnes, why are so few entry-level homes coming on the market? What is the state of the Texas dream circa 2015? I decided to take a closer look at these maddening contradictions, so I locked up my bike, hopped in a rented van, and drove to San Antonio, Austin, Dallas, and back home to Houston to find out what was really happening in four of America’s best (or worst?) real estate markets.
My first stop was San Antonio, always the cheapest of the four largest Texas metros but one that is semi-stealthily catching up. The Sleeping Beauty of Texas has awakened.
Fifteen years ago, my family and I spent the millennial New Year at Neal’s Lodges on the Frio River, west of San Antonio, and we’ve returned about ten times, usually taking the northwestern route via Loop 1604 and Texas Highway 16 to Helotes and Bandera and then through the high, gorgeous hills towering over hamlets like Tarpley, Utopia, and Vanderpool. Back in 1999, the San Antonio–Helotes leg was a breeze. There were only a few lonely roadside shacks, and the oak-lush hills were sparsely studded with palatial Hill Country chalets.
And then came the Toyota plant, in 2003. Even before the Tundras started rolling off the line, a bevy of other multinational corporations expanded their operations in San Antonio, and soon the Eagle Ford Shale play came in. The boom in northern San Antonio has been as dramatic as anywhere in Texas.
Nowadays, if you hit Highway 16 at the wrong time, it can easily add an hour to the trip. The logjam begins as you exit 1604 and find yourself in a long line of cars stacked up behind people coming in and out of Bandera Pointe, a big-box shopping center anchored by a jumbo H-E-B. The backups continue as you inch up 16, where weary commuters fight their way home past a new Walmart to their new McMansions and ranchers. Helotes’s population has exploded from around 1,500 in 1990 to a shade over 8,000 this year; such boomtowns abound all over northern greater San Antonio.
Windcrest is another. An enclave on the northeast side of town, Windcrest is home to Rackspace, a cloud-data management company founded by three Trinity University students in 1998. Now boasting well over $1 billion in revenue each year, the home-grown tech giant has helped transform the Alamo City. Still, fledgling tech sector or no, San Antonio remains the most affordable big city in Texas.
Rackspace mobility compliance director Kris Blue grew up in Plano, and she has lived and worked in Austin and Houston. She owned a condo in downtown Austin for six years, and now she has a home in Windcrest, not far from Rackspace headquarters on Fanatical Way (so named because of the company’s “fanatical” customer service). She misses much about her old life in the 5 Fifty-Five building on East Fifth Street—the convenience, the proximity to the lake and nightlife, a pedestrian- and bike-friendly lifestyle—but not quite enough to entice her back to Austin.
“I would love to move back to Austin, but the commute is terrible, and I am all in on this home deal,” she says. “For $1,035 a month I am covering my mortgage, taxes, and insurance. I feel priced out of Austin. I got out and there’s no way to get back in unless you live in Kyle or Buda.”
In recent years San Antonio’s leaders have worked hard to combat its sleepy image as a haven for families, tourists, and military retirees, a drowsy city known for its River Walk, belt-busting Tex-Mex feasts, and stark, majestic missions. Back in the heyday of the “Keep Austin Weird” campaign, some residents responded with a typically self-deprecating and subversive slogan of its own: “Keep San Antonio Lame.”
Today it’s hoping to attract more companies like Rackspace, more creative young professionals, and, very quietly, it is succeeding. Southtown and the King William Historic District together have emerged as one of the hippest residential neighborhoods in the country, with a renascent visual arts scene anchored around First Friday events hosted by the Blue Star complex, a mixed-use development with a focus on the arts. Once known to outsiders only for its puffy tacos, margaritas, and mole, San Antonio’s dining scene—much of it centered on Southtown and the Pearl Brewery mixed-use complex just north of downtown—has kicked into overdrive. “There is some really fantastic food here,” says Blue. “I would put it on par with anything you could find in Dallas, Austin, or Houston.”
And while Southtown proper is no longer a bargain, nearby neighborhoods are attracting a new type of resident. “The East Side is starting to look like East Austin,” says Blue. “Prices are going up and up.” Even so, you can still get a home in Dignowity Hill, one of the city’s East Side historic districts, a bike ride away from downtown or Southtown, for $200,000 or less. Though they are harder to find, you can uncover similar deals in Tobin Hill, near the Pearl Brewery, or rent there for under $1,000 a month, even for a two-bedroom.
“There’s a renaissance coming,” Blue says. “And with Austin being so unaffordable, I think lots of people will come south. We do have a bit of a hard time recruiting because so many people want to live in Austin, but San Antonio is slowly but surely starting to get there.”
A day later, I’ve parked my van near the corner of Sixth Street and Lamar, in Austin, and the scene looks like that gently mocking late-aughts website Stuff White People Like come to life.
First off, there’s the mere fact that this is the Texas city most favored by the sort of people the site targeted: that is, the sort of person who’s never been to Texas and yet says things like “I could never live in Texas, except for Austin, of course.” And here in the 78703 zip code, there are more than 17,000 white residents but only 325 black residents.
Since white people like camping (number 128 on the Stuff White People Like list) so much, there’s an REI on the corner, at which you can cram your Subaru Outback to the gills with high-end gear for those summer escapes to Telluride, pick up your $2,000 kayak for those excursions on Lady Bird Lake, or just stock up on outdoor performance clothes (number 87).
Just west of Lamar is Austin’s yoga row (number 15). There’s BookPeople, the independent bookstore where Stuff White People Like creator Christian Lander once appeared during the height of his popularity, and nearby Republic Square Park hosts the Sustainable Food Center’s weekly farmers’ market (number 5). Vespas (number 126) and bicycles (number 61) seem to appear everywhere.
And then there’s the Whole Foods (number 48) flagship, a place that filled comedian and podcaster Marc Maron with awe: “I went to the Whole Foods headquarters, and I was assaulted,” he said during a performance at South by Southwest four years ago. “It felt like a state fair with food riots for rich people.” As Antone’s was to Austin’s music scene in the eighties, so this Whole Foods has been to Austin’s downtown residential renaissance in the 2000’s. No fewer than seventeen residential high-rises have gone up since 2000. Three more are under construction, and another five have been proposed. The 683-foot Austonian’s short-lived reign as the tallest building in Austin is now threatened; the Independent, which has yet to break ground, is slated to surge a full 24 inches skyward above the Austonian.
Today, according to the Downtown Austin Alliance, the center of the city is home to 11,000 people. By comparison, Houston, the state’s largest city, has only 4,500 downtown residents. Downtown realtors really should consider a statue of Whole Foods co-founder John Mackey on the north shore of Lady Bird Lake, for he is this boom’s pied piper.
In fact, if you ask Austin downtowners why they moved there, nine times out of ten “Whole Foods” will be one of the first things out of their mouth. That’s certainly the case for Bobby Hedderman. Along with Eddie Wilson and others, Hedderman helped found the Armadillo World Headquarters in the seventies. After a sojourn in tiny, scenic Cimarron, New Mexico, Hedderman and his wife are moving back to Austin and are seeking a downtown rental.
“You can walk everywhere,” he says. “Everything you need is in a three- or four-block radius of Whole Foods. If I am gonna live in the city, I might as well live in the city. Nothing about living in a neighborhood appeals to me at all, not even a little bit.”
Hedderman and his wife are looking in the price range of $1,800 to $2,500 per month, not including utilities. That’s a lot, he acknowledges. “But you get a swimming pool and a really nice workout facility,” he adds. “And by the time you figure out the discount for not having to drive everywhere you go and the additional fees for going swimming somewhere and joining a gym, it all starts to make a little bit of economic sense. If you can afford to live anywhere in Austin, you can afford to live there.”
According to a recent survey from the market research group Austin Investor Interests LLC, the supply of new luxury apartments in Austin’s central city appears to be outstripping demand. Occupancy rates dropped eight points, to 82 percent, in the second quarter of 2015, at the same time that 5,800 new units within four miles of downtown were about to come on the market. More renters were signing leases in older buildings on downtown’s fringes for $1.23 per square foot than in the newer buildings in the heart of Austin at $2.52 per square foot. Some new upscale buildings downtown are already offering incentives, such as a few weeks free, to entice new renters.
Price aside, from a lifestyle standpoint, Hedderman’s forecasts are validated by another downtowner I talked to. According to the IRS vehicle mileage calculator he consulted, he has saved $10,000 a year since moving downtown six years ago. He walks to work. Nightlife options abound, from bars to venues to late-night restaurants. He has an extra hour or so to play with each day, sixty minutes he swore he would put to use in the gym but more often than not spends in bed. There’s no yard to maintain, no fear that a tree will crush your roof or that you will be on the hook if a possum gnaws through the wiring in your crawl space. You can watch fireworks on New Year’s Eve and the Fourth of July at eye level, and you can walk past the gridlocked cars on your way home from events near Lady Bird Lake.
It’s not perfect: there is the constant din of construction, and if you ever do need to drive in and out of the area around Lamar and Sixth Street, you can expect a cluster. But right now Austin is leading the way for Texas downtowns, most of which are attempting renaissances. Still, few young professionals can afford to purchase in any of them, especially not those who wish to start families. In downtown Austin, the purchase of a two-bedroom condo will likely run you a minimum of $475,000.
There’s a canard in the media that American downtowns are full of millennials. Raised in the suburbs on a steady diet of Friends, The Real World, and Sex and the City, oblivious to the charms of big-box retail and Friday night dinner at the strip-mall parking-lot Applebee’s, they have allegedly poured into city centers from coast to coast, packed into lofts, and reinvigorated urban cores with food trucks, boutiques, and shared office spaces.
But if you crunch the numbers, it’s not true, as the arrival of residents like Hedderman suggests. According to an Urban Land Institute survey released earlier this year, only 13 percent of millennials are true downtowners, versus 28 percent who are suburbanites and 24 percent who live either in small towns or the country. A plurality of 35 percent dwell in “other urban neighborhoods”: areas close to, but not in, the core. Why is this the case? The answer is simple: the rent is too damn high.
Still, twentysomethings have little desire to “drive until they qualify”—real-estate parlance for trading off proximity to downtown for finding an affordable neighborhood. Theirs is not a white-picket-fence generation. According to a 2014 Nielsen survey, 62 percent of millennials prefer walkable, urban environments, which reverses a ninety-year-old trend favoring the burbs over cities.
That same survey found that Austin led the nation in the percentage of millennials who favor a “conscious, creative environment,” with Houston and Dallas–Fort Worth also in the top ten. The trouble is, our cities are among the most car-crazy in America, and walkable neighborhoods are in short supply and high demand. Even those millennials pulling down good salaries can no longer afford to buy homes in these kinds of environments in any of these cities.
This phenomenon is probably most acute in Austin. Just a few years out of the University of Texas, 27-year-old Austinite Trevor Nichols is making an enviable salary as a sales engineer in the tech industry. “I can’t call myself a struggling millennial,” he says, but for the foreseeable future, home-buying is not in his plans—not because he doesn’t want it, but because he can’t afford it.
A Houston native, Nichols dipped his toe in the Austin market, ran a few computer searches, talked to a real estate buddy, and found that all his salary could get him is suburbia, the very thing many young neo-Austinites came to escape. Among Nichols’s peer group, anything more than three miles from downtown—far removed from the city’s famous food trucks, trendy shops, fun nightlife, and spring-fed swimming holes—is considered Squaresville. For now, he’s living by himself a short distance from downtown and paying $900 a month, which he regards as a steal.
And with neither marriage nor kids planned for the immediate future, why would Nichols want to live in some master-planned community off Slaughter Lane, where all he could get to on foot would be the community pool? Why would he want to trade margarita time with his buddies for hour upon endless hour on Mopac, swimming in a sea of taillights?
“Even if I moved out there, my mortgage would be about $1,800 a month,” he says. “That’s not easy to float.” He says he would try to find roommates to share the cost, no small task among his peers. “I would have to find a couple of people who have no desire to interact with the city.”
Meanwhile, Nichols knows that while he delays home-buying, the prices keep going higher and higher. “You are just like, ‘Really? Now it’s $280,000?’ And the worst thing is, you just have to buy the house on the spot, one day’s notice, because everybody in the city is buying up things like crazy. ‘Make up your mind, right now, the biggest purchase of your life and you are twenty-seven years old.’ ”
Earlier this year, an economic report was released that calculated how long it would take someone earning a median wage to afford a 20 percent down payment on a median home in thirty of America’s major cities. In Dallas and Houston, the two Texas cities in the report (bargains relative to Austin), it came to twelve or thirteen years. Not surprisingly, according to the latest statistics from the Texas Association of Realtors, the median age of the first-time Texas home buyer is now 32, up from 31 the previous year.
You can view the dilemma of twentysomethings like Nichols as a First World problem if you want to, but it is a problem nonetheless, and it bodes ill for the future of the entire state.
“It used to be you could get a good starter home in Houston for around $100,000,” says a Houston-area banker. “That first house a young couple gets before they have kids, and then they would trade up later, to your next level, what I call a ‘step-up’ home, at around $200,000 to $225,000. But now that’s a starter home, and a step-up home is whatever.”
And the same goes for DFW. “In the northern Metroplex, Plano, Frisco, Allen, McKinney, Prosper, that is definitely the case,” says Donnie Evans, a home builder with Onyx Homes. “If you come around to the east or southeast, it’s a little more affordable, but the problem is, there’s not enough [inventory] for the first-time buyer, like around $100,000 to $150,000. There are a few places in southern Dallas proper, but for the majority of people, there’s not enough to buy. Even way out in Greenville or Waxahachie, it’s hard to find anything under $200,000.”
Dallas remains the most American of Texas cities, a corporate metropolis that prefers to measure itself against regional hubs like Chicago or Atlanta rather than Houston or San Antonio (or, heavens to Betsy, Fort Worth). The asteroid belt of suburbs ringing Dallas has only expanded since 1960; old blackland cotton-farm towns like Frisco, DeSoto, and McKinney have been sucked into the Metroplex orbit, while others like the Colony and Flower Mound exploded into being from scratch, supernova-style.
Yet seemingly undetected, the core of staid, buttoned-down, car-dependent Dallas is undergoing a rapid and exciting un-Dallasification. Empty nesters are flocking into new luxury Uptown apartments. Aging bohemians are raising families in Oak Cliff. Deep Ellum has returned from the dead, yet again.
And even downtown Dallas is showing signs of life undetected since its vigor was sapped by the suburbs in the seventies. Shortly after arriving from New York City in the eighties, Candy Evans took one look at its empty streets and became downright alarmed. “Nobody was down there,” recalls Evans, today the founder of the DFW real estate blog CandysDirt.com. “I called my then fiancé and said, ‘Honey, I think there’s a bomb threat or something.’ ”
Back in 2006, I walked the length of downtown late on a Tuesday night, all the way from Oak Lawn to Deep Ellum, about three miles, and saw hardly a soul, save for a few folks lurking around the handsome art deco Greyhound station. I hoped to grab a quick beer in the lobby bar of the Adolphus Hotel, but I could see staff stacking chairs at around ten o’clock, so I carried on toward Deep Ellum, where the bartenders at one of the few places still open told me that Deep Ellum was dead, probably for good this time, and that they couldn’t wait to get a job somewhere more dynamic.
What a difference a decade makes, as I found out on my recent road trip. Add a Klyde Warren Park to link downtown and Uptown, build a Main Street Garden Park, throw in a huge and vibrant Arts District, mix in a few residential projects, connect it all to the suburbs via DART, and voilà: transformation. On a sizzling-hot Friday evening in August, the downtown streets were alive with people of all races: young professionals walking dogs, families pushing strollers and window-shopping, and diners enjoying a smattering of sidewalk cafes. Since 2000, according to the Dallas Office of Economic Development, the population has exploded, from two hundred to more than seven thousand.
And that’s just downtown. With the exception of the area south of Fair Park, old central Dallas is rejuvenating at a breakneck pace. D Magazine city columnist Eric Celeste, who currently rents in a Design District high-rise, describes it in a nutshell: “I lived for a year in Atlanta, and what happened there is happening here: we are seeing a bunch of small, organically grown neighborhoods pop up and then connect with one another. It started with Uptown—it’s the most dense and youthful area of the city. You can pretty much live there now without a car and have a city-like experience. Deep Ellum is back. Henderson is out of control between Ross and Central. Bishop Arts is driving the expansion of Oak Cliff from Jefferson Street to just south of I-30. Lower Greenville has come roaring back. This is just not the same city it was even ten years ago.”
Celeste believes the renaissance has come about via national trends meeting local needs. While Houston pays lip service to walkability and density, the perpetual petro-boomtown still builds as if it can drive its way to the golden tomorrow. The Dallas area has an ever-steady stream of corporate relocations from a diverse variety of industries, many of whose workers come from older American cities and would like Dallas to become more like those places—and who have the clout and organization to make that happen.
And even while the northern suburbs continue their march toward Oklahoma, central Dallas is slowly edging away from the Sunbelt model of development. With ninety miles of track, DART has the longest light-rail system in the country. After Lower Greenville burgeoned as a party zone and then became traffic-choked, marred by drunkenness and crime, the city widened the sidewalks at the expense of two lanes of traffic, canceled the late-night licenses of some of the area’s most notorious bars and clubs, and watched the district turn around. More so than in Houston, buzzwords and phrases like “walkability,” “smart growth,” and “live-work-play” actually mean something.
“A lot of young folks are teaming up with youthful-minded or at least forward-thinking architects, developers, and politicians and forming a group of really smart people who understand the importance of urban planning and really want a city for a person and not for a car,” says Celeste. (It’s all enough to give this proud Houstonian a case of Dallas envy. For the most part, our recent inner-city growth has been anything but smart or organic.)
The new Dallas that Celeste speaks of so glowingly comes with a hefty new price tag, as Celeste knows all too well. He and his girlfriend are looking to buy a condo and recently found a “unicorn” that met all their needs in nearby Oak Lawn. That place sold within 72 hours, and despite bidding $20,000 over the asking price, they came in second (among nine offers). Celeste says that buyers are looking at a minimum of $220,000 for a town house in any of these hip, reenergized areas, or between $350,000 and $400,000 for a move-in-ready house. Candy Evans adds that those seeking the “Austin lite” lifestyle afforded by Lakewood, near White Rock Lake, can now expect to pay $500,000 for a house they could have had for $400,000 a decade ago. With homes now averaging around $350,000, North Dallas burbs like Addison, Allen, Plano, McKinney, and Frisco are out of the range of most entry-level buyers today. (North of town, thirty or so miles away, only the Colony and Princeton come in with averages under $200,000.)
Still, Dallas offers some ridiculously cheap close-in real estate. In pockets of North Oak Cliff, homes average well under $200,000, and homes in South Oak Cliff are half that. Good-sized homes in the traditionally black neighborhoods behind Fair Park can be had for $50,000 or even below, but according to Jim Schutze, a longtime columnist with the Dallas Observer, most Anglo buyers will not venture there thanks to the “race resistance” he has written about so eloquently for so long. Schutze himself, who is white, bought a home in the eighties in Old East Dallas off Swiss Avenue, above Deep Ellum, back when they could be had for as little as $30,000. Today he’s watching his neighbors sell out for $500,000.
Because Schutze bought in so early, his mortgage remains low enough that he does not have to worry about affordability as much as some of his neighbors do, but setting that (rather large) issue aside, he’s sanguine, actually glowing, about the future of Dallas as a vibrant place to live. “Based on what I’ve seen over the last few years, I am so optimistic about the future of Dallas, I am concerned that I am on the leading edge of Alzheimer’s. I’ve never felt this way before, but the young people here—the Gen X’ers and the millennials—are different and interesting and they love cities and they are diversity-tolerant.”
Which is not to say that DFW does not still have issues. Though it is blurring, the divide between historically white North Dallas and black South Dallas extends into the suburbs now. Earlier this year, Carl Sherman, the mayor of DeSoto, a majority-black suburb south of town, claimed that realtors were steering affluent white buyers away from DeSoto, in spite of its prosperity, while steering black buyers in.
“They were shown some of our nice, pristine communities, well-manicured yards, and their realtor would say, ‘Are you sure you want to live here?’ ” Sherman told Reginald Hardwick, of Dallas’s NBC affiliate. “Whereas, conversely, African Americans and Hispanic families would be told all the wonderful things about DeSoto.”
Schutze sees those attitudes—real estate agents steering white buyers toward certain areas and black and Hispanic buyers toward others—as a last gasp of a dying “old Dallas,” but he also believes that self-segregation plays a role. He says that upwardly mobile African Americans have been streaming toward those suburbs from Dallas’s inner city by choice, and not because they have been pushed out. “I was bitching about Dallas to a black friend I hadn’t known very long, and he said, ‘Well, Jim, I love Dallas,’ ” Schutze says. “He was from Boston, which he said was terrible about race, and told me, ‘I don’t really know anything about old Dallas and I don’t care. Where I live, in DeSoto, everybody is from somewhere else, and nobody has an advantage over anyone else.’ He said it was like fresh air.”
And so it was back in the van for the drive home to Houston, the ever-changing megalopolis where both my grandfathers once sold real estate: Pops Lomax built affordable subdivisions in the burgeoning suburbs in the sixties, and Moe Taylor sold high-end residences in the Inner Loop from the seventies up until the millennium, which is when he finally sold the family’s old homestead on Institute Lane, just north of Rice and a few blocks west of the Museum of Fine Arts. Against long odds, the buyers did not demolish the old three-story, five-thousand-square-foot home, which had been built in 1923 and had become more than a little frayed around the edges. My grandfather bought the place in the late sixties for around $75,000 and sold it for about $750,000 in 2000, and today, meticulously restored, it’s worth an estimated $2 million.
Most of my other childhood memories have been crushed by excavators and bulldozed into dust. In zoning-free, developer-friendly Houston, oftentimes you don’t have to ask “What used to be here?” because you know all too well. This city devours its past like no other.
The Lomax home on Vanderbilt Street was scraped off the map in Houston’s first great teardown boom: the one that forever altered West University Place from an enclave of smallish cottages to an enclave of gargantuan McMansions in the eighties. That performance is getting an encore in the Galleria-area Briarcroft subdivision today. On the lot where my great-grandfather Taylor’s cozy forties rancher once stood now hulks a 5,500-square-foot neo-Tuscan palace owned by a couple with a Mexico mailing address. It has an estimated market value of $2 million as well. The two-bedroom quad-plex my ex-wife and I rented on North Boulevard for $995 a month as recently as 2006 has been demolished and replaced by a new home currently on the market for, you guessed it, $2 million.
There is nothing relatively inexpensive about the new Heights, where I have lived for the past five years. Of the 227 homes listed in the Houston Heights proper on the Houston Area Realtors website, the average price was $698,000, while rents were $2,565 a month. The “Heights” name, once regarded as dowdy at best, now carries with it an unprecedented prestige. So what little remains of the residential section of the historic First Ward is now aggressively marketed as “Sawyer Heights,” and a neighborhood to the west of that is now peddled as “Washington Heights,” thanks to its proximity to Houston’s recently gritty but now glam Washington Avenue.
Heights creep is poised to leapfrog Interstate 45 into a heavily Hispanic working-class neighborhood known as Near Northside, one of the few such redoubts left near downtown, where the streets are lined with taquerias and family-owned bus services offering tickets to San Luis Potosí and Zacatecas. The median price of area homes increased by 56 percent between 2009 and 2014. In 2009 the median home price was $109,000, just within the means of the resident earning a median income. At the new $170,000 median, that’s no longer true, and Northside home-ownership rates have declined from 49 percent in 2000 to 43 percent in 2013. Adjusted for inflation over that same time period, median household income has declined from $38,000 to $32,000, and families in poverty have increased from 26 percent to 33 percent, almost exactly tracking the percentage of homeowners in reverse. All of which makes it ripe for the plucking by developers coming from the Heights.
Reunited with my bike, I pedaled over to a new development called Avenue Place, where the nonprofit Avenue Community Development Corporation is in the process of building a close-in affordable housing option. Despite the fact that it is only minutes from downtown and near several interstates, this neighborhood of what is now 49 (and will eventually be 95) new homes is so quiet that you can hear a rooster crowing from an adjacent older section of Near Northside. Inside Avenue Place, a pedestrian trail snakes through the development of meandering streets centered on a playground, and a community garden is slated to go in on one of the grassy verges. With the contemporary design (courtesy of Austin’s Northfield Design Associates) and the color palette of the one- and two-story homes—exteriors range from royal blue to peach to yellow to lime-green—you feel more like you are in some tech-worker-heavy neighborhood in Austin than a Houston barrio.
These homes—ranging from 1,330 square feet to just over 2,000—start at around $200,000 and go up to $250,000. Income-eligible buyers can qualify for subsidies of $86,000 (if the buyer earns 80 percent or less of the local median income) or $26,000 (120 percent or less). To discourage predatory investors, buyers who sell within the first ten years of ownership must share any profits with the development corporation.
Seated in the living room of the development’s model home, the only one on the ground that has yet to sell, Avenue CDC executive director Mary Lawler tells me of the origins of this project and Avenue CDC, which traces its birth back to the mostly successful fight to save Old Sixth Ward, a 150-year-old historic district just west of downtown. Today Old Sixth Ward offers the greatest concentration of Victorian architecture in the region outside Galveston, and with its gracious old homes and brick streets, it’s one of the only Houston neighborhoods where you can get a sense of what the city was like before cars, freeways, and air-conditioning atomized our way of life. It also retains a mix of income levels, and that combination of affordability and preservation has been Avenue CDC’s driving force ever since.
“We were really born out of a fear of gentrification,” she says. “The people in the Sixth Ward could see downtown looming over them, and they wanted to protect their little historic neighborhood. Not just the historic architecture, but also the economic diversity.”
When the Washington Avenue corridor boomed in the aughts, when it shed its past as a long string of used-car lots and funky music dives and became a long string of upscale apartments and velvet-rope dance clubs, Avenue CDC was there to salvage a few adjacent pockets for moderate- and low-income residents, and now it is taking the fight to Near Northside.
In a major coup, Avenue CDC was able to wrangle a deal for the twenty-acre Avenue Place property during the recession in 2008 from prior owner FedEx. In 2011 it built a 144-unit affordable apartment complex along one side of the property and watched it fill up immediately. Then the group went to work on Avenue Place, putting in homes, apartments, streets, utilities, and other amenities, to the tune of $44 million, some of it funded by the Houston Endowment. The houses sold as soon as their last shingles were nailed into place. “We just can’t build them fast enough,” Lawler says.
She hopes this neighborhood and others like it—her group is also active in the First and Sixth wards and the sprawling Northline barrio, just across Loop 610—will enable longtime residents to remain where they have lived and worked all their lives.
That scenario, one that recalls the not-so-distant past, gives me hope. My road trip made me realize that our cities are getting denser and more vibrant, but I worry that the cost is unsustainable. Ever since Stephen F. Austin offered colonists a labor and a league of land free of charge to all those bold enough to come to Texas, this state has been a bargain. Once, it demanded real bravery to move here, and even with Comanche no longer among the hazards, Texas living still requires more fortitude than, say, crisp, high Colorado or the lush Pacific Coast. But if you were willing to work hard, you could achieve the American dream, Texas-style, even without a college degree: rent in the city, get married, start out with your own new ranch house in the burbs, trade up after a decade or so of prosperity, put your kids through college, sell out, and retire to a Piney Woods lake cabin or Bolivar beach house.
Texas was a land of opportunity within the land of opportunity. Today that bottom rung on the ladder is getting slippery in every Texas Triangle city. The number of new homes being constructed has rallied to about half of pre-recession levels, but an inordinate amount of them are not affordable to the average first-time buyer. In San Antonio, between 2011 and 2014, construction of homes selling for $150,000 and below declined from 30 percent to 6 percent.
In the first quarter of 2014, Austin developers built more homes in the $500,000 to $750,000 range than they did entry-level homes. In fact, only 1 out of every 25 new Austin homes built could be purchased by the average first-time buyer. As daunting as that sounds, it’s just one worrisome factor. Home prices and rents are heading nowhere but up. New affordable housing is in short supply. Incomes are flatlining or trending down. When it comes to owning a home in Texas, I’m reminded of that song by James McMurtry: we can’t make it here anymore.