ENOUGH TALK: Coronavirus Signals it's Time to Restructure the American System

The healthcare crisis brought on by the coronavirus pandemic has forced the nation to accept new standards of doing things, from people being encouraged to telecommute, to bars and restaurants in conservative states like Texas and Kentucky being allowed to deliver alcohol to patrons in the safety of their own homes. If necessity is the mother of invention, then a global pandemic is the mother of modernization.

We have watched the United States, like other democratic countries in the world, undergo an unprecedented shift in the curbing of individual rights in the interest of public safety. Right along with that, there’s been a dramatic shift in how business is being done, services are being delivered, and how government is operating. This ground shift has led to an upending of norms in just about every industry and societal system, which begs the question, why haven’t we adopted these changing norms all along despite having the capability to do so?

During every biennial legislative session in the Texas legislature, we routinely hear horror stories of people who travel hundreds of miles to show up to testify on a bill, only to be held up at the Capitol until the wee hours of the morning, as legislative committees endure the drudgery of marathon hearings. Similarly, working class citizens are routinely hard pressed to show up for City Council meetings or public hearings that take place smack in the middle of the workday in Downtown, making it impossible for a staggering number of the population to ever make it before their elected representatives to present their case.

It’s time for America to accept these critical lessons as a clarion call that we heed by adapting these new norms, which will help transform our society as we approach the 2^nd quarter of the 21^st century. To achieve this transition, we must build a robust online security infrastructure, which leverages blockchain technology and the latest security tools to help protect basic online transactions. The federal government should similarly build a secure internet system to support every level of government, which would provide a platform and portal through which smaller local governments can process their transactions and also backup their systems, helping them avoid breaches by nefarious online actors that have become all too common.

Taking these foundational steps will help us build a platform through which we can fundamentally modernize government at every level, and adopt a new standard where online and technology supported systems are the primary option for everything from car registration to voting, with manual/hard copy serving as a backup system for redundancy and security. This would speed up the process of helping smaller governmental entities better serve their constituents, operate more efficiently, and increase their capabilities. Within the next five years, all public meetings by governmental and quasi-governmental entities should be accessible online, with key witnesses and stakeholders being able to provide testimony via teleconferencing. Furthermore, citizens will be able to conduct more transactions online, saving them time and making government more accessible.

Earlier this week, in a fell swoop Texas’ governor Greg Abbott waived the physical meeting requirement of the Texas Open Meetings Act, allowing political bodies and governmental agencies to conduct their meetings via teleconference. Similarly, at the beginning of the coronavirus outbreak, major universities all over the country promptly announced they would be moving all courses online for the remainder of the semester. Public school districts have also begun following suit with several transitioning to online virtual learning. One issue that this transition online will undoubtedly make glaring is the digital divide that has existed and become further exacerbated over the last five years, as technological advances were made with 4-G and recently 5-G.

Notwithstanding, public K-12 education should immediately shift all curriculum design to include an online track for parents to follow, which would also be a backup for students to fall back on during illnesses, seasonal disease outbreak, and other emergencies. Higher education should increasingly shift to an online model, with students only being compelled to classroom attendance for exams and laboratory exercises. Furthermore, universities and colleges need to make emergency preparedness a standard part of the education degree (minor) offerings for their social and natural science departments, so that we have more localized expertise that can step up in times of crisis.

On the industry side, telecommuting for work should become a readily acceptable work model, particularly during seasonal health outbreaks, natural disasters, and other man-made disruptions. We now see the critical need to possess internal manufacturing capacity, as supply chains have been significantly strained, first by China’s slowdown following the outbreak, and now due to restrictions on public movement. We need to invest more significantly in 3-D manufacturing, light manufacturing, and small-scale personal manufacturing capability. We also need to incentivize the local manufacturing of critical goods that are essential in crises situations, particularly medical equipment, sanitary goods, and non-perishable food items.

The healthcare industry needs to shift its model to one primarily reliant on telemedicine for routine patient visits, non-critical emergencies, and continuous care. Through existing available technology, doctors can issue prescriptions online for patients, and pharmacies would be able to deliver to prescriptions to patients who are immobile. Additionally, we need to have a public health option that serves as an appendage to the existing private healthcare system.

We should further consider setting up an Emergency Disaster Preparedness fund for every American. This can be done in the modified form of a universal basis income, which provides one-time payments to every adult American at age 20, 35, and 50, which will be in a restricted account that accrues over time and can only be accessed during federally declared disasters. This in effect sets up a personal disaster escrow account, which is invested on behalf of every American, can be easily accessed when affected individuals are experiencing a disaster without need for action by Congress or the federal government having to spend money it does not have budgeted.

 Laolu Davies-Yemitan is a real estate broker and developer who specializes in housing, multifamily development, and urban revitalization. He editorializes on issues related to affordable housing, real estate markets, and public policy. LaoluD.blogspot.com; Twitter: @laoludavies

Review: Sen. Kamala Harris Racial Homeownership Gap Plan

In reviewing the plan put forward by Sen. Kamala Harris to combat the Racial Homeownership Gap, I find the core principles put forward in the plan laudable, which aim to redress generations of housing discrimination. The plan as summarized invests $100 billion in down payment assistance grants of up to $25,000 for individuals/families purchasing homes in historically red-lined low-to-moderate income (LMI) neighborhoods, which could at minimum assist 4 million families/individuals. The requirement of the home being a primary residence, should be coupled with a requirement that the $25,000 should be a forgivable grant that requires homeowners live a minimum of five years in the home they purchase. This in effect allows $5,000 to be forgiven annually, and any remainder balance recaptured from the proceeds of a sales transaction, should the homeowner sell the home earlier, should be reinvested back into the program.

The tenancy requirements of the program, however, is likely to exclude a lot of what we call the 'Missing Black Middle', younger upwardly mobile African Americans under the age of 45. The Missing Black Middle are not likely to meet the qualification requirement of living in the historically red-lined community over the preceding 10 years, being that the Black community has been highly transient over the last 50 years. To this end, additional guidelines must be incorporated to account for this Missing Black Middle of potential homeowners whom the plan would unintentionally omit. 

Take for example a 35-year old person who attended college out of town, and graduated twelve years ago. The likelihood of them having lived in a historically red-lined low-to-moderate income (LMI) neighborhood consistently for the preceding 10 years is low, as they likely had to change addresses at least twice over that period; with quality of area, availability of housing options, and proximity to work being key determinant factors in where they chose to live. A lot of the other residents who meet the criteria would likely be older longstanding homeowners who are etched in place or long-term renters for whom the likelihood of purchasing a home is quite low.

For a plan of this magnitude to work effectively, the tenancy requirements should be adjusted to better target and accommodate the demographic of African Americans most likely to be able to capitalize on the opportunity, and inure the benefits of returning to the communities where they were reared. The criteria as proposed should add language that provides access to the homeownership grants for African Americans under the age of 45 who lived for five years or more in historically red-lined LMI neighborhoods during the preceding 25 years. There should also be an exception for under-40 college graduates whose families (within the third degree of consanguinity) have historic ties to any neighborhood nationally targeted by the plan. Lastly, there should be greater flexibility on the annual income and maximum home price caps by indexing it as a percentage (125%) of the Area Median Income and Median Home Price in certain urban areas (think: Houston, San Francisco, Washington DC, Boston, Los Angeles and New York).

(This article should not be taken as an endorsement of any political party or candidate)

Laolu Davies-Yemitan is a real estate broker and developer who specializes in housing, multifamily development, and urban revitalization. He editorializes on issues related to affordable housing, real estate markets, and public policy. LaoluD.blogspot.com; Twitter: @laoludavies

Gentrification Hits Houston's Urban Core With New Vigor: How The Issue Can Be Tackled

Houston's urban core is undergoing gentrification at a rapid pace, a trend which corresponds with the experience of the urban core of most major cities in America. However, few people are willing to talk about, much less formulate ways to tackle the issue head on. The issue of gentrification is not new, with earlier examples being traceable to several generations before. At varying points in the history of American cities dating back to the 1800’s, neighborhoods have undergone significant gentrification as new immigrants displaced what were once neighborhoods dominated by a prior group of immigrants. And in some cases, neighborhood revitalization simply led to displacement of older residents within a particular community.

Houston neighborhoods have a long and familiar history with gentrification, which has often been characterized by the flight of one ethnic group from one neighborhood to another. Take for example the Riverside Terrace community at the southern edge of Houston’s Third Ward, which was historically occupied by Jewish families, who later transitioned further west to resettle in the area around Meyerland. The now predominantly Black neighborhood is on the precipice of a significant shift in the racial makeup of its residents, with an increasing number of non-Black residents seen walking their dogs or pushing baby strollers along Brays Bayou and the Columbia Tap Trail in the evening and on weekends .

The main drivers of the present day gentrification, are however, arguably primarily geography and socioeconomic. In several of Houston's urban core neighborhoods, what were once eclectic and counter-cultural residents are being replaced by an invasion of the trendy upwardly-mobile professional class. Take for example Montrose and the Museum District, two neighborhoods which lie just within an earshot of downtown Houston. Both communities for a longtime catered primarily to working class residents, young people, and the creative artistic class. The impact of gentrification over the last 15 years has left these neighborhoods, once characterized by traditional ranch-style homes, duplexes, and small apartment complexes, with a smattering of new mid and high-rise apartments, as well as luxury townhomes, condos, and large magnificent single family homes. The older residents have not only been displaced, but the new residential and commercial developments have left only trace remnants of the neighborhood’s historical character visible.

The same fate that befell Montrose and the Museum District, has similarly overtaken areas such as Upper Kirby, and the historic Fourth and Sixth Wards. These once culturally distinct neighborhoods are hardly reminiscent of their glorious pasts, as newer residents usher in a new vibrance often characterized by an influx of trendy retailers, coffee shops, white linen restaurants and flashy bars. The cat is out of the bag in these areas, and their experiences foretell what lies ahead for some of the historic neighborhoods now on the verge of tipping over namely Second Ward, Third Ward, and Fifth Ward.

While the gentrification process has commenced, it has yet to take full hold, and through carefully considered policies, Houston can attenuate its impact in displacing long-term residents of those endangered communities. The bevy of long-term solutions all point towards permanent affordable housing development, and the Mayor’s Complete Communities initiative is a step in the direction of securing long-term affordability in the areas most at risk of gentrification. However, this strategy also holds the potential of having the countereffect, wherein new infrastructural investments in an area accelerate the pace of gentrification.

Due to its lack of zoning, Houston is able to actively promote housing development in various areas of the city, and encourage partnership with and incentives for the private sector to develop affordable housing units in greater number. The City could further streamline the development process to enable such projects to be more feasible and allowing them to be built faster. Examples of measures that would be beneficial for delivering more affordable units include creating a fast-track permit for projects, reducing parking requirements, and alleviating some of the burdensome development requirements affordable housing developers have to meet that do not apply to market rate developers. In addition to taking these steps, the City has a tremendous opportunity to utilize Harvey Community Development Block Grant-Disaster Recovery (CDBG-DR) funding from HUD to accelerate the pace of affordable housing in the aforementioned "at-risk" communities and in other areas of Houston facing tremendous housing price pressures.

Laolu Davies-Yemitan is a real estate broker and developer who specializes in housing, multifamily development, and urban revitalization. He editorializes on issues related to affordable housing, real estate markets, and public policy. LaoluD.blogspot.com; Twitter: @laoludavies

Six Months After Harvey, Recovery Must Focus on Housing, Infrastructure, and Resiliency

Six months after Hurricane Harvey, a long road to recovery lies ahead for the Houston region and where that road leads depends on the intentionality and meticulousness of how immediate decisions are approached. A lot of discussions, following the historic flooding event that damaged approximately 100,000-150,000 housing units in the Houston area, have centered on buying out homes that have flooded repeatedly or that lie in the floodway, in areas adjacent to the major bayous that traverse Houston. The need to take drastic action is clear, however, the limiting factors will be funding, political will, and the ability to maintain a focused long-term strategic approach.

With so many needs having to be met, it’s difficult to predict the amount of funding that will be available from federal coffers for home buyouts, and so it’s incumbent on local leaders to begin exploring alternative options that are within the control of local government. For example, a robust housing program that may for example purchase 20,000 at Houston’s median price of $238,000 would cost $4.5 billion. Furthermore, home buyouts will get you only so far, and what is more important is to begin working on reformations that improve community resiliency.

A few ideas to contemplate that could have significant impact on the trajectory and outcome of the recovery efforts from Harvey include: repurposing of land, improving localized drainage and water detention, and comprehensive community redevelopment. The rebuild efforts must begin with examination of land use in flood prone areas that are contemplated as part of any significant single family home buyout efforts. The voluntary nature of the home buyout program can cause the process to drag on, and can render the effort ineffectual, where it becomes difficult to achieve critical mass.

Once homes have been purchased, a key question to answer is what purpose the vacated land will be put towards and how we improve neighborhood resiliency. A concern some neighborhoods have rightly raised is the destabilizing effect patches of vacant land dispersed throughout communities could have on disrupting the character of the neighborhood. A solution could be to repurpose areas where a sufficient amount of contiguous land has become vacant as greenspace maintained locally, and to have that greenspace serve the dual purpose of serving as localized detention. The dirt that is dug up from building these detention ponds can subsequently be used to shore up the banks of water ways or to fill in some of the low lying properties to raise the land above the 500 year flood plain for new development. If approached in a comprehensive manner and executed properly, any strategic filling of land would be more than offset by the corresponding detention that is created.

This idea conflicts with the city of Houston’s currently proposed revisions to Chapter 19 of its code of ordinances, dealing with development in the floodplain. As currently proposed, the revisions will focus on elevating buildings above a yet-to-be determined base flood elevation and restricting dirt filling sites for any new construction or major reconstruction of buildings in the 500-year FEMA floodplain. The data from Harvey revealed that a lot of the areas that flooded across the region laid outside the FEMA 100-year and 500-year floodplains, meaning revisions are needed to how areas are labeled in order to ensure any regulatory changes will achieve the desired effect.  With that in mind, these proposed revisions at best will take a long time to confer any measurable benefit and at worst would have very little impact on flooding other than for that individual building.

A comprehensive review of the floodplain maps needs to be conducted via a detailed analysis of the best available localized flooding data from the last decade in order to ensure that flood maps accurately reflect the practical experience on ground. This increases the chances of proposed measures achieving the desired impact of reducing flooding damage in the region. Furthermore, immediate impact can be readily achieved by focusing on building up resiliency of existing neighborhoods, by making improvements to the drainage infrastructure and network of bayous to better detain and move water out quickly. The region also needs to focus on getting new housing units built in areas that have suffered little flooding impact from any of the last three major rain storms, and concurrent efforts should be made to fortify resiliency of these areas.

Lastly, Houston must act with the utmost sense of urgency as April marks the beginning of its rainy season. If recent historical trends persist, another major rain event can be expected that will result in significant flooding in some of the currently most vulnerable areas. With so many residents still displaced due to Harvey, one can only imagine how a major flood event would severely further deepen the current state of catastrophe. To avoid the worst possible outcomes, it is in the region’s best interest to work towards quick solutions that improve drainage, enhance resiliency, and rapidly rehouse impacted families, particularly those low-to-moderate income households.


Laolu Davies-Yemitan is a real estate broker and developer who specializes in housing, multifamily development, and urban revitalization. He editorializes on issues related to affordable housing, real estate markets, and public policy. LaoluD.blogspot.com; Twitter: @laoludavies

Amazon's Unequivocal Rejection of Houston is a Wake Up Call!

AND NOT FOR THE REASON MOST ARE CITING...

Following Amazon’s omission of Houston from its announcement of its top 20 cities for location of its second headquarters (“HQ2”), Houston’s failure to make the top-tier has sent leaders in search of answers for what went wrong. A common reason being cited by the experts and business leaders is, a lack of innovation led to Houston’s exclusion from the top 20, and those folks are now raising the warning flag that we must invest in innovation.

Without having the benefit of soliciting feedback from Amazon’s leadership team, I’m going to postulate that a lack of innovation is not the reason Houston did not make the cut. The fact is Houston has been innovating for a long time, and over the last 10 years has been outpacing the nation in innovation in several ways. Two examples of this are horizontal drilling for oil and gas (“fracking”), and the Texas Medical Center Innovation Campus (TMCx), where the world’s top medical researchers are teaming up with healthcare and technology businesses and entrepreneurs. Not to mention the impact the Houston Technology Center and the presence of technology behemoths HP and BMC have had over the last decade, resulting in the technology sector driving a lot of diversification of the region’s economy. Furthermore, development of Generation Park, a booming craft brewery industry, and the Bayou Greenways 2020 project are other prime examples of a region pushing the boundaries of innovation in different sectors.

The missing component in this matrix of amazing things taking place in Houston can be boiled down to the acronym TIE--Transportation, Infrastructure and Education (“TIE”). Houston’s deficiency in these areas is glaring, and one could argue that these are the key factors that will catapult Houston into its rightful place as America’s leading city as we approach the midpoint of the 21^st century. We must begin by taking care of the foundational basics of what makes for great cities.

In Houston’s case, it begins with an improved public transportation system that connects our two international airports, Hobby and Intercontinental, to Downtown. We must also deal with our horizontal infrastructure by fixing our roads and drainage system, so that annual major rainstorm events do not flood so many of our neighbors out of their homes. We must further improve our vertical infrastructure by providing greater workforce housing opportunity, and in the process promote density and affordable housing development in all parts of the city, particularly those areas within proximity or easily accessible to major employment centers. Lastly, we have to make a renewed commitment to bringing about solutions to improve our education system in order to stem the tide of persistently failing schools. The creative workforce is not likely to be attracted to a city with few housing choices available in areas where their children can be zoned to good schools. The inextricable link between schools and housing choice renders significant limitations on the ability to provide housing in so many of Houston’s underdeveloped area, and the most significant way we can rapidly accelerate housing options within the city limits is to improve the quality of schools.

Laolu Davies-Yemitan is a real estate broker and developer who specializes in housing, multifamily development, and urban revitalization. He editorializes on issues related to affordable housing, real estate markets, and public policy. LaoluD.blogspot.com; Twitter: @laoludavies

HOUSING NOW: Houston Must Act With A Sense Of Urgency

After years of the city of Houston coasting along without a plan to address the housing affordability crisis that was looming in the background, the tides began to turn in 2016, as the new administration named tackling housing affordability as one of its top priorities. A year and a half later, article after article has cast a more significant light on the scope of the problem, however, it turns out the issue is not unique to Houston, and is one that a number major American cities that experienced rapid growth over the last decade are grappling with.

Houston’s affordable housing community lauded the Mayor’s acknowledgement of affordable housing in his January 2016 inaugural remarks. In his May 2016 State of the City Address, the Mayor further decried the fact that Houston was “becoming two cities in one: a city of many contrasts”, which served as the backdrop for announcement of his Complete Communities initiative. Then in July 2016, the City named a new housing director, who announced that amongst his top priority was the creation of a Comprehensive Housing Plan for the city of Houston.

A year later, the City has suffered a barrage of unflattering articles detailing the mismanagement of housing funds, lack of oversight of its programs, refusal to issue voter-approved housing bonds, and an overall lack of accountability of some of the funds the City has dedicated to housing, all of which predated the current administration. This created an outcry from local housing advocates, to the point of prompting national publications to write stories about the affordability crisis Houston is faced with, and the seeming lack of action to combat the issue.

You can debate the fairness of the coverage the City has received, however, the facts are undeniable that Houston faces a looming housing affordability crises. I will reiterate that the issues of fiscal mismanagement and lack of accountability preceded the current administration, and the housing department has suffered from a string of departures over the last several years, leaving the department lacking the depth of experience it previously enjoyed.

What is most important at this point, if there is to be a turning of the tide, is that the City must begin taking decisive steps, to prevent more families from falling off the last rung of the opportunity ladder, as they face difficulty in being able to find places where they can afford to live. There are currently 43,000 families on the waiting list for housing vouchers from the Houston Housing Authority, and a recent analysis concluded that Houston had a shortage of over 200,000 units required to meet the housing needs of families earning below the area median income.

The first step the City must take is to initiate the process of creating and implementing a Comprehensive Housing Plan, and the administration should define a housing affordability policy for local housing dollars. This will help ensure that any subsequent efforts that are made are part of a longitudinal strategy to provide quality housing for residents that remain affordable long-term. Next, the City should prescribe and implement a 24 to 36-month plan to disburse the unspent locally generated housing dollars, issue the totality of housing bonds previously authorized by voters, and create an outline for how federal funds received for the Memorial and Tax Day floods, in 2015 and 2016 respectively, will be expended in meeting the immediate housing demand.

In addressing the above stated steps, the City must work with a broad based coalition of housing advocates, planners, developers, funders, non-profits, academicians, and community representatives. The City should prioritize the varying degrees of housing needs by type, geography, and population served, while maintaining a balance between multifamily and single family housing options. These steps taken in concert will help provide short-term relief, while creating a sustainable pathway forward long-term.

Laolu Davies-Yemitan is a real estate broker and developer who specializes in affordable/workforce multifamily housing development, and urban-suburban revitalization. He editorializes on issues related to real estate and public policy. LaoluD.blogspot.com; Twitter: @laoludavies

The Consequence of Picking ‘Qualified Candidates’ for HUD Secretary

December 2016

The nomination of Dr. Ben Carson, the former presidential candidate and neurosurgeon, as the Secretary of Housing and Urban Development (HUD) has been met by an outcry from those asserting that he is unqualified for the position. Dr. Carson’s detractors argue that his lack of experience in housing or community development are instant disqualifiers, which causes one to pause and ponder prior appointees to the position, the career experience those individuals possessed, and the result of their tenures on the present state of urban America.

Other arguments that have been proffered include his lack of government experience, having never managed anything close to the size of the $47 billion agency, and his apathy for the idea of the government being able to act to improve the lives of vulnerable citizens, an assertion attributed to his June 2015 comments where he stated, “there are reasonable ways to use housing policy to enhance the opportunities available to lower-income citizens, but based on the history of failed socialist experiments in this country, entrusting the government to get it right can prove downright dangerous”.

Looking back at HUD secretaries over the last three administrations (Castro, Donovan, Preston, Jackson, Martinez, Cuomo, Cisneros), three had prior backgrounds in housing, two previously served as mayor of the city of San Antonio, then you had one lawyer and one banker. These prior HUD secretaries had varying degrees of success, however, the impact of each secretary draws no direct correlation to the experience they brought to the position. Furthermore, the combined efforts of these former secretaries have culminated in rendering America’s urban communities to the state they are currently in: gentrifying in growing cities, and deplorable in stagnant or contracting cities.

Whether Dr. Carson has the requisite experience to run HUD in the context of his own previous admission is up for fair debate, however, the larger issue we must focus on is the current state of urban and rural America, and the impact the efforts, or lack thereof, of prior secretaries has rendered on these communities. If we are to accept the premise that prior housing experience is a necessary qualifier for assuming the role, then following that logic should point to results that show how previous secretaries with the relative experience, left a legacy of transforming urban and rural communities all over the United States.

This clearly has not been the case, and in light of recent administrative rulings by HUD, and the Supreme Court ruling in TDHCA vs. ICP, urban communities specifically risk suffering deeper underinvestment going forward. Cities such as San Francisco, New York, Seattle, and Los Angeles, which enjoyed significant economic success over the last two decades have watched their inner-city communities undergo significant gentrification, displacing long-term residents. Emerging metropolitan areas are currently undergoing a similar trend, as seen in cities such as Houston, Austin, Washington-DC, and Denver. In each of these cases, communities that for a long-term were neglected and had no significant investment, welcomed revitalization of their areas, only to get swept away as older single-family homes were replaced by multi-story townhomes, and mom and pop shops, were replaced by coffee shops and organic restaurants.

The next HUD Secretary has to commit to assembling a team that will focus on revitalizing communities, rather than simply rehabilitation of existing units or delivery of new housing. Revitalization of these declining communities must prioritize housing, infrastructural investment, economic development, educational improvement, mass transportation, and physical and mental healthcare. The next secretary also must be judicious in application of the affirmatively furthering fair housing (AFFH) rule by prioritizing balancing the need to create housing options in so-called “high opportunity areas”, and the urgent need to invest in communities at risk of gentrification or greater decline into further deplorable conditions.

A Secretary with a fresh perspective might just be the shot in the arm that is needed by HUD, and Dr. Carson could have the potential to not only transform the agency, but to elevate its significance from the perspective of Congress, and in the minds of Americans.