Low Income Tax Credit Property Approved by Texas Housing Department: Largest Project in Texas Poised for Sharpstown

SNIP TX Housing Board 12-2017

The 805 unit Vista On Gessner, low-income-housing-tax-credit project (LIHTC), located in southwest Houston in the heart of the Sharpstown community, was approved by the Texas Housing Department on December 14th, 2017.

With no further regulatory hurdles, the project will proceed where upon completion of the rehab the units will be restricted to tenants who earn no more than 60% of the area median income.

While disappointing, it came as little surprise, as the Turner administration made it clear the project would receive no objection from City Hall.

There is much to report about these events, but first the obvious question remains, how did this project make it through despite strong community opposition?

Here’s how it played out.

Council Member Mike Laster, State Rep. Gene Wu, Southwest Management District Executive Alice Lee, along with the Sharpstown Civic Association Officers led by former President Pat Menville, worked together to keep the project quiet as long as possible.

Every one of these folks was notified months before the project became public through my community alert. Laster and Wu were informed as required by law. Despite later claims that the SCA first learned of the project through an October 13th letter, the developer mailed the SCA a notice on August 2nd, a notice never shared with the Board of Directors, membership, or the community.

If a neighbor had not been alert to a cryptic item placed on the city council housing committee agenda, it’s likely we’d never have known a thing. Of course, there is a long track record of these leaders failing to report important issues to the community, so why would this time be any different.

Next they worked quietly to limit any public participation, knowing the difficulty in reaching those who would have concerns.

However, working with District F Council Member Steve Le, we were successful in delaying the required City of Houston public hearing a week. This allowed time for the Southwest Houston Alliance and Citizens Action Workshop to host a town hall at the Sharpstown Community Center, which was well attended.

Before the final city council vote, the Southwest Mgmt District’s Alice Lee lobbied hard for Dalcor, giving Dale Dodson  a personal recommendation, and claiming that since Warren Buffett picked Dale he must be great. Of course, none of this information was shared or approved by the SWMD Board in any official meeting, committee or otherwise. Nothing on their web site or meeting packet. This is off-the-books lobbying plain and simple.

Alice Lee screen cap

But before the council vote, and despite no announcement by Laster, Wu or the SCA, about thirty residents attended the Texas Housing Dept. hearing held at the Walter Branch Library. Wu, his staff, Corky Fowler; City of Houston TIRZ No. 20, Dale Davidson; TIRZ No. 20 and SCA Officer, and the Southwest District’s Alice Lee all attended.

The format of this type of meeting is invaluable for citizens and dangerous for government. An attendee asks a question and officials respond (or not), creating real dialogue, and the chance to uncover information not shared in documents or other talking points.

Here’s an example:

Talking point:  Dalcor’s Dodson— (TRANSCRIPT)

“I’m not spending your tax money. That’s where the myth’s — why did you think I’m spending your tax money?”

“There is no public money involved.”

But alas, when pressed about the $30 million in Federal tax credits, Dodson admits the use of public funds and says without them the project doesn’t happen. Of course the financing is via the Texas Housing Department’s conduit issue of tax-exempt bonds, an additional public subsidy.

Talking Point: From Dalcor documents, City of Houston materials, and the initial phone conference; Residents were informed about a Dalcor Housing proposal, a firm with decades of experience, and a long track record in multi-family housing.

At the Texas Housing hearing it was revealed that Warren Buffet’s Berkshire Hathaway is actually the owner, the limited partner, with Dalcor’s Dale Dodson saying “but we own 1 percent”.

But wait, when the item was posted in the Texas housing board packet for State approval, the organization structure shows that Dalcor actually owns only .01 percent, with Berkshire owing the balance of 99.99 percent.

VISTA org structure from TX housing board book

So it went from: It’s Dalcor’s deal, to its Berkshire’s deal and we’re a one percent owner, to Dalcor owns only .01%. Interesting.

Maybe you think this is no big deal, but without a question asked by a resident at the hearing, we’d likely have not known a thing about Warren Buffet’s affordable housing investment arm.

What confidence do you have about tenant screening, or the quality of renovation, or other tax credit housing deals on the horizon, when the simple facts about ownership or the use of public funds proved so elusive?

The Barrier to Redevelopment of Southwest Houston is Institutional. Are Policy Makers convinced that Concentrating Low Income Properties leads to revitalization?

Since 1991, fourteen multi-family housing units have been built or rehabbed in southwest Houston using the federal low-income-tax-credit housing program. The Vista on Gessner project will be the fifteenth, a pattern of about one new tax credit project every 22 months over the last two decades. The Gessner project with 805 units will be the largest in Houston and the State of Texas, with the average Texas project having only about 125 units.

Meanwhile, developers have seemingly covered every square foot of available land in the larger Sharpstown area with apartments, which now account for about 80% of the total housing stock. In comparison, single family homes comprise less than 7%, while our population density already exceeds that of Staten Island, New York, and is approaching the level of Chicago, Cleveland, and Detroit.

This practice of concentrating “affordable housing” in low income, minority communities has been found by the US Dept. of Housing and Urban Development, to be noncompliant with the Civil Rights Act of 1964.

Less than a year ago, HUD ordered the City of Houston to make specific changes to its housing policies, with the threat of litigation and loss of future federal funds a real possibility. The Turner administration, like those before it, seems unfazed, using every political tool to continue the practice.

Meanwhile, a short ten minute drive down the Southwest Freeway takes you to Sugar Land where they’re considering a cap to limit apartments to no more than 12% of the total housing units. Residents appearing before the City of Sugar Land’s planning commission describe concerns about too much population density.

“I think a lot of people have memories of what happened in southwest Houston back in the ‘80s, where there was a large number of apartment complexes that quickly became section 8 housing,” said land use advisory committee member Glenn Smith. “They began to be run down, and I think [Sugar Land] residents are just afraid there might be that kind of thing happening here.”

Indeed. They’re smart to be concerned.

Policy Makers Appear Defeated; They Cannot Envision Any Use for the Land other than Low-Income Apartments.

In my two recent visits to Houston city council a common refrain was repeated by several council members including Laster, Green, and Davis, that the land’s best use was for apartments, and that it was foolish to think otherwise.

When I pointed out that the land across the street was purchased by Strake Jesuit and the old apartments on that seven acre plat were demolished they were dismissive — Do you know of another buyer who plans to build something other than apartments?

After almost twenty years of property taxes dedicated to the Sharpstown Improvement District, then Management District, and Tax increment Zone, for economic development they have nothing? No thought or possibility?

Our redevelopment it seems is limited to low income apartments, more hot-sheet motels, and tax exempt non-profit service providers.

One might ask why it is so important to policy makers to dedicate such a large block of land for low income housing for another 15-25 years.

Federal Funds for housing are intoxicating!

They want more density and more people, but have no funds for additional infrastructure, public safety, or support. Why?

Gulfton CC Snip

The clue might be in looking hard at the participants of the Gulfton-Sharpstown  Complete Communities project and the local, state, and federal funding supporting a symphony of non profits within our community.

Despite all the funds expended and services provided, the poverty rate exceeds 42% of the population in the Gulfton-Sharpstown corridor, now more than double the City average. That’s a 20% jump since 2010, while the actual population remained flat.

There’s a lot more to this story. Stay Tuned.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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