Sunday, March 13, 2011

Confusion on Both Sides

Why there are such bad fights over Low Income Housing in Houston

Last year, when a developer from North Carolina tried to build Tax Credit housing in Katy, I wrote about the need to use tax credits to fix existing housing rather than build new. It’s something I stand by, and we’re starting to see some movement in using tax credits to fix bad apartments here in Braeburn. But they’re at it again out in Katy. This time the company is from Indiana, but their proposal is basically the same as the one last year.

It can be really confusing for neighbors to understand what developers are doing. There are many different programs and types of housing for the poor. Usually termed "affordable housing," this can include:

- Public housing, which is owned and run by local governments with federal and sometimes state subsidies.

- Slums, which are privately owned and don’t benefit from tax subsidies or oversight, other than local building codes. These actually represent most of the affordable housing here in Houston.

- Tax Credit housing, (also known as “Low Income Housing.”) built by private developers using tax credits authorized by the Low Income Housing Tax Credit Program (LIHTC) from 1986. (This is also sometimes known as “Section 42 Housing.”) Basically, developers get breaks on their taxes if they set aside a certain number of apartments at below market rates, expressly for people making less than the area median income.

(You’ll notice I didn’t include “Section 8 housing”. Section 8 is a federal voucher program that fills the gap between local market rents, and what poor people can afford. It’s not actually a type of housing.)

Developers are confused too. When we neighbors fight their proposals, they get frustrated and call us names. But Houstonians aren’t racists. We don’t hate poor people. Our “NIMBYism” comes from the fact that we’ve borne the brunt of bad development for the past 40 years.

The problem started in the 1970s. Lots of people got very rich in that decade, developing apartments in Houston’s suburbs. Neighborhoods were fundamentally changed - at first for the better. Young professionals moved into the apartments, enjoying tennis courts, swimming pools, gyms, even night clubs and movie theaters. Crime rates remained steady. Real estate prices in neighborhoods near apartments actually went up in the 1970s.

Then came the oil-bust of the 1980s. Houston’s economy was hit especially hard. The apartment bubble of the 1970s, burst. One-by-one, apartment complexes fell into foreclosure and started to deteriorate. The deterioration continued through the 1980s and 1990s. Crime rates spiraled higher at apartments. Living conditions for tenants got worse. Property values stagnated around apartments.

Tropical Storm Allison flooded some apartments in 2001. More apartments were damaged during Hurricane Ike in 2008. The credit crisis made it impossible for landlords to fix their properties, so properties went from economically depressed, to completely derelict.

Now, whenever someone proposes affordable housing, we Houstonians immediately think “derelict property.” Of course it's not right to think this way. Low income housing can contribute to our neighborhoods if it is well-designed and well managed; and if it takes the place of slums or derelict property. But it's a hard-sell because of history. I just hope we can move past the confusion, and developers and neighbors can start working together to get the right investment, in the right locations.

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