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Houston’s Affordable Housing Conundrum

What Houston can learn from Dallas’s low-income housing debacle.

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HOUSTON, TX - JANUARY 07: An upscale apartment project is seen during construction in the Galleria area on January 7, 2013 in Houston, Texas.
Scott Halleran/Getty

Ever since the Houston Housing Authority announced that it planned to build an affordable housing development near the city’s affluent Galleria neighborhood last year, residents have opposed it with familiar “not-in-my-backyard” complaints. Opponents claimed the housing would overcrowd their schools, clog up their streets with traffic, increase their community’s crime rate, and lower their own property values. In solidarity with the Galleria-area residents, Houston Mayor Sylvester Turner said last month that the project would never even make it to city council for consideration, essentially declaring the project dead. Without city council’s approval, the Houston Housing Authority won’t be able to secure federal tax credits tabbed for the development of low-income housing, which would likely make the $53 million project too expensive to complete.

According to the Houston Chronicle, the debacle has prompted a federal investigation to determine whether Houston violated the Civil Rights Act. If the feds find Houston in violation of fair housing standards, they could force the city into compliance by withholding federal funding. But Turner doesn’t sound worried. “Since receiving the letter, I have had a very positive conversation with HUD Secretary (Julian) Castro in which he made it very clear that this is standard procedure,” Turner said in an emailed statement to the Chronicle. “I fully expected they would want to review the decision.”

Affordable housing failures are not new to Houston. According to the Chronicle, it’s been ten years since the HHA last succeeded in building new affordable housing. And two days after he nixed the Galleria project, Turner criticized the agency for not, uh, building affordable housing.

Ten years is an inarguably woeful stretch, but it might not be fair to place all of the blame on Houston’s Housing Authority, at least not lately. Last year, shortly before the Galleria project was announced, the U.S. Supreme Court handed down a decision in a Dallas fair-housing case, finding that Texas’s federal housing subsidy program could be found liable for discriminatory practices, even if those practices may have been unintentionally discriminatory. The original lawsuit, filed by fair-housing advocacy group Inclusive Communities Project, alleged Texas’s housing program basically fostered segregation because city housing agencies in Dallas were stacking affordable housing in minority neighborhoods without also building them in “high-opportunity” areas. SCOTUS ultimately sent the suit back to a lower court, but the decision served as a warning to housing agencies in cities across the country: make affordable housing available in affluent neighborhoods, or risk violating the Fair Housing Act and say goodbye to federal funding.

This is where things get tricky for the Houston Housing Authority. Pushback from within well-off communities is pretty much inevitable anytime someone wants to plunk down a large-scale, primarily low-income housing development in their neighborhood, and Turner seems determined to stand with the already established communities. Last year, when a similar (and ultimately unsuccessful) project was planned for the district he was then serving as a state representative, Turner told a community newspaper: “If you can’t convince the homeowner associations and the civic clubs and the management district that this is right for the community, then I will not support it.” This appears to leave the HHA with few options. If it can’t succeed in gathering support and federal funds to build affordable housing in well-off neighborhoods, then, because of the SCOTUS ruling, it may not be able to build affordable housing anywhere at all.  That conundrum made it hard for people like Lance Gilliam, the former chairman of Houston’s Housing Authority, to do their job. “The one accomplishment that has eluded and, I’m certain, frustrated all of us is our inability to build new homes for the families we are blessed to serve,” Gilliam wrote in a resignation letter he submitted shortly after the Galleria project was killed, according to the Chronicle.

The affordable housing situation in Houston is becoming eerily similar to Dallas, which ultimately led to the SCOTUS ruling. As with Houston, there was a federal inquiry into the City of Dallas’s fair housing practices in 2013. The U.S. Department of Housing and Urban Development found that “there was a pattern of negative reactions to projects that would provide affordable housing in the northern sector of Dallas,” HUD wrote in a letter to the city summarizing the findings of its investigation.

Since then, Dallas has taken steps to comply. According to the Dallas Morning News, it could have its first-ever citywide fair housing policy in place as soon as next month, a policy that includes a number of proposals to get affordable housing into high- and mixed-income neighborhoods. And in September, a federal judge dismissed the lawsuit that prompted the SCOTUS decision in the first place, finding that the fair housing advocates “failed to demonstrate that local zoning rules, community preferences, or developers’ choices did not contribute to the statistical disparity,” U.S. District Judge Sidney Fitzwater wrote in the decision, according to the Morning News. As Fitzwater explains, those combined factors don’t constitute an actual city policy that can be addressed by the court.

That ruling bodes well for the City of Houston, which seems destined for a similarly serpentine legal odyssey. According to the Chronicle, a group of fair housing advocates sent a strongly-worded letter to Turner shortly after a contentious public meeting in March, when it became clear that the Galleria project would probably fall flat in the face of fierce resistance from residents. In the letter, the advocates warned Turner that by failing to support the affordable housing project, the city would risk facing a lawsuit. So far, though, no lawsuit has been filed.

It should be noted that the project could technically go forward without the federal tax credits or the mayor’s support—the Houston Housing Authority has said that it has enough money to cover the Galleria homes, but it would rather not spend so much on a single project at the expense of others.

The Galleria plan was the Houston Housing Authority’s first attempt to build affordable housing in such an affluent neighborhood, and if the way this project was received is any indication of the response from other ritzy communities targeted for affordable housing in the future, then it may be a long, long time before any affordable housing gets built in Houston by the agency tasked with creating it.

*Editor’s note: Lance Gilliam is the former chairman of the Houston Housing Authority, not the former director. We regret the error. 

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  • Cheryl Monteith

    What you did not bother to discuss in the article was the fact that the cost of over $225,000 per unit might have been a factor! Plus the $6 million dollar development fee which no one could figure out who would receive….
    Over-crowding of a school where the families who live in the neighborhood surrounding the school are not guaranteed a spot….There were many reasons this project failed. Don’t cherry pick the facts!

    • Lance Gilliam

      Cheryl, http://hhadevelopment.com/ Question 33 on “Q&A from the Public Meeting” responds to your comment about the development fee. 100% of the “fee” which is an amount proscribed and allowed by law is being retained by the Houston Housing Authority primarily for reinvestment in other new development. The Authority has no current plan to retain, utilize or pay for services by for profit developers. Also explained often was the cost, which is a lot, reflected the value of the land. Adjusting for density, the total cost was very similar to other Class A multi-family development nearby. The writer didn’t cherry pick the facts; no worries. Lance Gilliam

    • Jed

      “it’s too expensive” is just a cowards’ way of (not) explaining why you oppose something.

      everything costs money, but i bet there are things that you think are important enough to pay for.

  • Dave S

    I hate NIMBY-ism & fervently want affordable projects to succeed in such areas. The issue I see though is all specifics I’ve read said only 23 units would be reserved as affordable rather than market, which makes this line from the article very problematic when ‘PRIMARILY’ is used: “This is where things get tricky for the Houston Housing Authority. Pushback from within well-off communities is pretty much inevitable anytime someone wants to plunk down a large-scale, primarily low-income housing development in their neighborhood,”

    • Jed
      • Dave S

        Never said anything about best practices, but I’d say make it at least 60% required affordable units at that same site, which would be a lot more than 23 in a project that size. The article never actually said it’d be mostly affordable, but implied it by saying ‘whenever someone wants to plunck down a primarily affordable project ‘. A lot of struggling people & families could benefit from affordable units there & in other high opportunity areas, so instead of building it on the initial terms that were rejected, build it with a much greater ratio of affordable units

  • Charlie Primero

    Damn these people who want good schools, light traffic, low crime rates, and rising property values!

    Thank goodness we have a Federal Government willing to stop them from achieving those things.

  • WIltonguy45

    These housing “advocates” are full of S. The minute the shovel hits the dirt on low income (Section 8) housing the property values will go down because there will be a percentage of current residents who will sell and move. Once that starts its downhill from there. I recommend everyone see the heartbreaking documentary “Spanish Lake”. This film shows how the middle class town of Spanish Lake MO went from suburban dream to urban nightmare in less than 20 years. This rural single family home town had no social services or public transportation or even large employers, but the government in it’s determination to social engineer everyone chose to throw up hundreds of low income apartments in Spanish Lake, within 20 years the town was destroyed. Now it is one of the most violent, crime ridden areas of north St. Louis, all of the original residents fled, the schools went from A to F rated and the town is full of drugs and endless crime. It is really such a sad story and the government is still 40 years later pulling this same crap on people. You can see Spanish Lake on Amazon and I think HULU, it is a must see for any concerned resident.