Midtown Houston’s 25-year Track Record of Maintaining Housing Affordability in Houston’s Inner City
(photos of home built by Cole Klein Builders)
The last 25 years have seen an explosion in development in many inner-city Houston neighborhoods. Midtown Houston, the area between downtown’s skyscrapers and The Medical Center, is no exception. Unlike other neighborhoods, however, there is a plan in place in Midtown to preserve affordability and neighborhood character.
The demographics of those needing access to affordable housing are broad and often include teachers, health care workers, government and office employees. It is a lack of workforce housing that is forcing these residents out of the inner city.
“In Houston, it is virtually impossible for somebody who makes $40,000 a year to rent an apartment or buy or rent a home inside the loop. The prices are just too high,” said Midtown Redevelopment Authority Real Estate Asset Manager Todd Edwards.
Since its creation in 1995 by the Texas Legislature, MRA has been working to supply solutions. They started by buying land — lots of land.
Per the enabling legislation, one-third of the dollars MRA receives from increases in the area’s property tax base must be used to buy land for or develop workforce/affordable housing. When real estate became too expensive in Midtown, they expanded to the east into what is known as the Third Ward where lots were available for as little as $5 per square foot. This creative and unconventional lot-by-lot approach occurred over about a decade and resulted in the acquisition of a total of four million square feet of land.
Usually, land banking involves holding on to parcels until values increase and the owner can realize a handsome profit. In this instance, however, there was a more noble goal in mind – the creation of a critical mass of properties that could be used to mitigate the loss of character and displacement of families from one of Houston’s original neighborhoods.
“We realized that you really couldn’t be respected to put together a comprehensive plan unless you had land,” Edwards explained.
MRA is not a builder. Instead, they work with for-profit developers, churches and other nonprofit organizations that buy MRA’s land at reduced prices or no cost at all. For example, a 5,000-square-foot lot in the Third Ward with a market value of $20 a square foot might be sold to a private developer for as little as $1.50 a square foot, thereby cutting the land acquisition costs from $100,000 to $7,500.
By eliminating or drastically reducing the up-front costs, MRA facilitates the development and sale of new construction that offers everything market-rate housing offers, but at an affordable price. It is a creative approach that defies the traditional public perception of what affordable housing looks like.
“You cannot drive by anything we have built and know that it is affordable housing,” Edwards said.
To date, MRA’s program has resulted in the construction of about 500 units of single-family homes, duplexes, senior and special needs housing and multi-family apartments. Another approximately 500 units are yet to come.
But building housing is only one part of the equation. MRA’s comprehensive approach also includes meeting infrastructure needs, planting trees and ensuring access to public transportation. About 130 of the lots are within walking distance of METRORail’s Purple Line that runs along Scott Street, Wheeler Street and MLK Boulevard, making it convenient to get to and from jobs.
Houston will continue to change but if we are to prevent that change from leaving the inner city devoid of ethnic, cultural and financial diversity the need for affordable/workforce housing cannot be ignored. MRA is redefining how this problem is addressed, producing quality housing that is affordable to those who might otherwise be shut out of the neighborhoods they helped build and have called home for decades.
You can follow Midtown Houston’s blog and read more about our affordable housing program here.