October 2015
Houston has been on a wild tear since 2010, as rapid growth
in the domestic energy sector led to exploding employment and population
expansion. With that growth came significant urbanization of Houston’s inner
core, as developers rushed to develop new housing supply to meet the huge demand. The shortage of new housing was further exacerbated by short supply of
land and escalating land prices. This forced developers to look towards denser
development within certain inner loop communities, while others branched out
into older established neighborhoods to kickstart significant redevelopment of
those areas. The older homes in a lot of neighborhoods underwent significant
reconstruction or were torn down to make room for newer and often denser
housing developments.
This trend spread rapidly to various neighborhoods including
the Galleria, Medical Center, Montrose, Meyerland, Cottage Grove, and the
Heights, leaving certain neighborhoods with adoption of historic preservation
designation or minimum lot size restrictions as the main tool to preserve the
character of their neighborhood. As revitalization spread to some of the most
attractive neighborhoods, maverick developers began venturing out to previous overlooked
historic African American neighborhoods of Third Ward, Fifth Ward, Independence
Heights, and Latino neighborhoods such as Near Northside and the East End.
The shift towards these areas came without warning, and took
hold before a lot of these neighborhoods could act to protect themselves. Residents
who had rented in some of these neighborhoods for decades were suddenly been
forced out, while homeowners watched their communities turnover right before
their eyes. Several small rental apartment complexes were demolished to make room for
larger mid-rise apartments, while single-family lots were cleared and subdivided
to accommodate multiple housing units. The resulting effect is residents who helped
build these community have become displaced as new owners put the land to its highest and best use.
A key contributing factor to this shift has been the fact that homeownership rates are particularly low in Houston (45%), and even more so in historic African American
neighborhoods. Another factor has been existing homeowners opting to sell their
homes to the highest bidder, which inevitably leads to market demand forces
driving the influx of new residents. There is a golden rule in real estate,
particularly in a city that has no zoning, “he who owns the land makes the
rule”. The combination of low ownership rates, older residents aging out,
and existing homeowners fleeing the neighborhood, is ultimately rendering a lot of our
neighborhoods at risk of mass gentrification.
This trends show no signs of slowing down, even in the
aftermath of a rapid decline in the energy industry. Developers seeing a slow
down at the higher end of the market have turned their targets on areas with
affordable land, which are primarily historic African American and Latino
neighborhoods, and are moving fast to put up new housing to meet the demand. These
new residents are not only altering a neighborhood’s character, the increase in
value brought about by new home construction is simply pricing older resident out
of their home due to escalating tax valuations; another key driver of gentrification.
Houston families who helped build our City into the amazing mecca of
diversity it has become should not be driven out of their neighborhoods, but should rather be afforded opportunities to retain their residence in a new and improving Houston urban core. The City can and should act to help facilitate quicker adoption of deed
restrictions to protect established neighborhoods, implement policies to help more residents become homeowners, and accelerate development
of affordable owner-occupied and rental housing options to mitigate the
impact of escalating housing costs in these priced neighborhoods. These steps taken in
combination will go a long way towards preserving affordability, maintaining
the character of our long established neighborhoods, and helping our long-term
residents age in place.
