A Breakthrough Plan to Tackle Affordable Housing Challenges

A groundbreaking initiative recently approved by the Houston City Council will help offset rising infrastructure costs that have threatened housing affordability in Houston’s Third Ward in recent years. This transformative program addresses the growing cost challenges faced by builders participating in the Midtown Redevelopment Authority (MRA)/Center for Civic and Public Policy Improvement (CCPPI) affordable housing program while empowering essential workers like teachers, firefighters, and police officers to take the leap toward homeownership.

Rising costs and affordable housing struggles

MRA has provided land as a subsidy for constructing affordable housing in the Third Ward and other neighborhoods for years. However, there is often no assistance to help cover the necessary infrastructure improvements when building in older neighborhoods where utilities, streets, and sidewalks have deteriorated or do not exist. Until recently, builders could factor these costs into their products while keeping the final purchase price affordable. Due to rising construction materials and labor costs, that is no longer the case. Homes once priced at $185,000 just a few years ago now cost $235,000 to $250,000, causing concerns that affordability could soon be out of reach for the buyers the Midtown program targets.

The solution

Enter the game-changing solution – a $50,000 down payment assistance program to ease the burden on builders and potential homeowners. While this financial aid flows directly to the buyer, there are benefits for the builder. With creative financing options and more upfront capital, buyers can better afford the higher home costs that builders must charge to offset their rising construction expenses. At the heart of this initiative is a commitment by MRA and CCPPI to continue providing workforce housing at affordable prices.

Ensuring neighborhood stability

Potential buyers must meet specific income guidelines to ensure the program’s effectiveness. This targeted approach ensures that the assistance reaches those who need it most. In addition, buyers must commit to staying in their homes for 20 years, creating stability and continuity within the neighborhood. If they sell before the 20-year period expires, they must pay a recovery cost equal to the property’s appraised land value at the time of sale or sell the house to another qualified purchaser.

By addressing rising costs head-on and providing innovative solutions, MRA and CCPPI are fostering homeownership and preserving the community’s vibrant fabric.

More than a dozen nonprofit and for-profit builders are participating or have participated in the MRA/CCPPI program. Collectively, they have built 146 homes as of the end of 2022. More than 200 additional homes are in the planning stage or are already under construction. Learn more here.