July 2015
Long viewed as a hidden gem largely outside the national
spotlight, the city of Houston has been ranked as the best place to live in
several different categories by national and international publications in
recent years. Despite our new found publicity, the Bayou City is becoming a
less affordable place to live. In the not too distant past, Houston was
renowned for affordability of its real estate and the quality of life it
provided, which lured people from all over the country. However, as the city
pulled out of the recession, the draw of new residents led to a real estate spike
which drove up land prices and the cost of rent throughout the city,
particularly within the urban core.
The inner loop of Houston has long had a range of affordable
single and multifamily housing options available, spread throughout areas like
its Historic Wards, Montrose, Medical Center, Museum District, Galleria, and
the Heights. In the early 2000’s, however, revitalization of the urban core began a
trend that would lead to the demolition of older housing stock to make room for
newer, denser, and ultimately more expensive development. A decade and a half
later, the re-urbanization of Houston’s inner core has led to erosion of the
naturally affordable housing base Houston once possessed. This has left
thousands of senior citizens, working families, and young people with few
places to turn for housing options which their incomes will afford them. Even a
cursory comparison of rent rates in the city center now versus a decade ago will
cause heartburn.
Having such a plethora of affordable housing options prior to
the 2000’s, Houston was not pressed to prioritize development of restricted
affordable housing, as cities such as Chicago, New York, Philadelphia, and San
Francisco had previously done. Furthermore, a certain stigma has been attached
to affordable housing since the early tenements developed in some of the major
east coast cities, leading to the term
they became more commonly described as—“projects”. The stigma of “project”
housing has been hard to lift even in the current world, where new affordable
housing developments are built to the same standards and are often less dense
than Class A apartments. Stricter regulatory requirements such as replacement
reserves and mandatory periodic inspections has made better long-term
developments, but the persistently staid “not-in-my-backyard” mindset continues
to make affordable housing more an ideal than a reality.
Today’s affordable housing is not what it used to be. It is no
longer an industry dominated solely by profit-driven developers, but rather one
where developers looking to make a profit are compelled to adhere to very
strict guidelines for the duration of the affordability period. More
importantly, we need to shed the notion of poor citizens on government
subsidies being the predominant occupants of affordable housing, and instead
embrace the new reality that affordable housing today is primarily needed to
meet the housing needs of our base workforce. In a city as critically important
to the US economy as Houston, we must understand that our economic
competitiveness requires us to meet the housing needs of our region’s workforce,
which will continue to make Houston both desirable and affordable.
Laolu
Davies is a real estate broker/consultant representing national affordable
housing apartment developers (Twitter: @laoludavies); Terry C. Bruner is a real
estate lawyer specializing in HUD financed housing transactions; Antoine Bryant
is an architect and urban planner
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