Leadership Development Module: Gentrification

Module 2: gentrification

The Houston Metropolitan Statistical Area (MSA) is experiencing rapid population growth, with a net gain of over 900,000 new residents since 2010. This influx of population is driving social, economic, and environmental changes to neighborhoods throughout the city. Furthermore, this growth is bringing development pressures to parts of the city that haven’t seen private investment in over 50 years. In 1964, sociologist Ruth Glass coined the term �gentrification,� to describe this phenomenon.

This module will explore the impacts of gentrification, anti-displacement strategies, and responsibilities of preserving housing affordability and community identity in Houston.

What is Gentrification?

Gentrification is complex and not easily defined, but could be described as the physical and social changes experienced by low to moderate-income communities, resulting from an influx of wealthier new residents. The arrival of wealthier residents directly impacts the value of existing homes and the property taxes paid by existing residents.

For homeowners, the rise in property values means their biggest investment is growing. However, the resulting rise in property taxes increases the financial obligations of already challenged low-income households. Renters in gentrifying neighborhoods are commonly the most at risk of displacement, as they have no control over the rate at which rental costs increase. On the other hand, new residents and rising property values can also trigger neighborhood improvements such as better schools, green spaces, streets, healthy food access, retail, and housing options.

How does it work?

The seeds of modern day gentrification were sown decades ago through a combination of federal, state, local, and private industry policies that created and enforced racially segregated housing colloquially known as redlining. These policies systematically concentrated minority populations within inner city neighborhoods while simultaneously depressing property values within the same neighborhoods. In addition, cities neglected to install or maintain public infrastructure such as sidewalks, adequately sized drainage, parks, etc.

Historically, these policies deprived minority homeowners from the credit and equity enjoyed by their white suburban counterparts. Today, these policies render land in minority communities vulnerable to acquisition, consolidation, and redevelopment by outside entities.

A neighborhood in transition New condos and apartments increase density, respond to the scale of new multi-story homes, and are also affordable only to high income earners.

New multi-story homes are built to meet expectations of high income earners. These new structures tower above existing housing stock.

Houston’s average rental costs, across all unit types, have increased by over $350/month since 2010.

Where am I?

Existing residents are pressured to relocate in response to rising housing costs.

Some neighborhoods transform vacant lots into pocket parks and urban farms. This strategy stabilizes the lot until other programming is necessary.

Why does Gentrification matter?

Unchecked gentrification has the potential to render any community unrecognizable in less than ten years. The amount of new housing, commercial building, and displacement of existing residents can be overwhelming. Furthermore, when new residents create their own spaces, existing residents can feel like outsiders in the own community.

On the other hand, the strongest communities develop when both new and existing residents understand the risks and opportunities involved in gentrification and work together to preserve the affordability and character of the neighborhood.

Managing a balance during neighborhood transformation is very difficult. Along the way, community leaders and residents will encounter risks and opportunities specific to their geographies and populations.

Investment in existing building stock helps preserve neighborhood character.

Increased Safety

Improved environmental quality and health

Bike Lanes

WHAT IS AT RISK?

WHAT CAN BE GAINED?

AFFORDABILITY: A key characteristic of

JOBS: New investments in homes and

DISPLACEMENT: When rising housing costs

PHYSICAL DEVELOPMENT: Gentrification is

gentrification is the rise in property values. This can affect how much it costs to rent an apartment and buy or build a new home. The types of business that serve your community can also be affected. As new businesses open, competition and quality rise. force existing residents to relocate outside their neighborhood.

COMMUNITY IDENTITY AND CHARACTER:

Neighborhoods, cities, and regions change over time. The identity and character of these places are shaped by their residents. Because of this, demographic shifts and new investment will inevitably impact the way a place looks and feels.

Community engagement and civic participation are critical to the preservation of neighborhood identity and character of a transitioning community.

businesses may lead to the creation of jobs in the community, ranging from retail and construction to healthcare and tech. It is critical to ensure long-time residents have a fair shot at gaining employment resulting from outside investment. the act of investing in historically neglected communities. Investment without displacement would mean better schools, green spaces, streets, food, retail, and housing options for both existing residents and new residents.

SOCIAL AND ECONOMIC INTEGRATION: Early

stages of gentrification have the potential to lead to social and economic integration as well as unprecedented access to human capital for historically marginalized communities. Again, this is only true if displacement is ultimately avoided.

Can Disaster Recovery lead to Gentrification?

Widespread property damage, residential displacement and compromised property values are common in the aftermath of a disaster event. These factors also make a community vulnerable to gentrification. Communities should be aware of these effects while navigating the disaster recovery process and can advocate for the replacement of affordable housing units with affordable housing units.

Buyouts

Chapter 19

Buyouts assist vulnerable homeowners in relocating to comparable homes in non-flood prone areas. The collective benefit of buyouts is that they free up land within the floodplain for stormwater management, which reduces future flooding risk. However, funding and eligibility requirements can produce a “checkerboard effect” which means some homeowners take buyouts and others stay behind.

The Chapter 19 (Floodplain Ordinance) revisions require new or modified structures within the 100- and 500-year floodplains to be elevated to 500-year floodplain levels plus two feet. This requirement is triggered when property owners engage in new construction or additions of 33% or more square footage to an existing structure. As proposed, required improvements would be at cost to the property owner.

The Greater Houston Flood Mitigation Consortium recommends extensive public outreach, coupled with active case management and generous relocation assistance from flexible funding sources to encourage more homeowners to participate and achieve a more cohesive buyout process.

Elevating to the new requirement will impact housing affordability and some homeowners will struggle to meet the eligibility requirements of federal housing programs. The use of flexible funding sources can be an alternative to this issue and help avoid homeowners leaving damaged homes behind.

How do I know if my neighborhood is gentrifying?

DEMOGRAPHIC SHIFT:

RISING PROPERTY VALUES:

REAL ESTATE DEVELOPMENT:

REMOVAL OF PUBLIC HOUSING:

INCREASED POLICE PRESENCE:

BLIGHT REMOVAL:

A change in the age, race, gender, or income of the average community member, As wealthy individuals move into a neighborhood and displace existing residents.

The conversion of existing public housing into less dense apartment-style housing to improve residents’ quality of life and renovate the area.

Gentrification is triggered when home value growth is so rapid, with outside entities flipping homes and sell them at a profit, that existing homeowners cannot cope with rising property taxes.

Shorter police response times and greater patrol frequency improve safety of new and existing residents, this increased presence has been related to the demographic shift.

New investment which drives gentrification often manifests itself as home remodels, new multi-story housing, and new commercial developments like coffee shops and breweries.

Vacant and abandoned homes and lots are replaced with new construction, rehabs, pocket parks, and urban farms. These beautification efforts positively impact property values.

Who is in charge of neighborhood revitalization?

Community Organizations and Local Programs: A network of community organizations—including, but not limited to community development corporations, neighborhood chambers of commerce, neighborhood councils, faith based organizations, private investors, and public entities—work to revitalize the community. Programs like LISC Go Neighborhoods, the Mayors Complete Communities, or the LARA program work to increase investments in neighborhoods.

Neighborhood

Super Neighborhoods are also a venue to fight for neighborhood revitalization at the neighborhood level. These entities garner a seat at the table through the Super Neighborhood Alliance—an organization comprised of the Presidents or Chairs of Super Neighborhood Councils that serve on a formal advisory board to the Mayor and city government on community matters.

City of Houston Department of Housing and Community Development (HCDD): HCDD provides leadership and financing for affordable housing and neighborhood revitalization. HCDD administers over $100 million annually in various federal, state and local programs for neighborhood parks, multifamily communities and economic development, and several housing programs.

City

Mayor’s Office of Economic Development: The Economic Development Division promotes City initiatives and provides economic tools to business owners who are interested in relocating or expanding their companies. They work directly with the Tax Increment Reinvestment Zones (TIRZs). These zones, created by City Council, help finance costs of redevelopment and encourage development in areas that would otherwise not attract sufficient market development.

Harris County Community Services Department: The Community Services Department serves the community with a number of programs and​services, including Housing and Community Development, the Housing and Community Resource Center, Transit Services, Social Services, and Disaster Recovery.

County

The Community Services Department runs the Neighborhood Stabilization Program.

This federal program was established by congress for the purpose of stabilizing communities that have suffered from foreclosures and abandonment. The goal of the program is to purchase and redevelop foreclosed and abandoned homes and residential properties in order to revitalize communities.

Texas Legislature: The Texas Legislature is the state’s representative governing body.

Unique from other states, the Texas legislature meets for only 140 days, on odd numbered years. This powerful branch of the state government approves the state budget and the budgets of agencies like TDHCA. It also has the power to create, repeal, or defend laws that affect a local jurisdiction’s ability to addressing their local housing, inclusion, and displacement concerns.

State

Texas Department of Housing and Community Affairs: This department is the state agency responsible for affordable housing, community and energy assistance programs, colonia activities, and regulation of the state’s manufactured housing industry. The Department currently administers $2 billion through forprofit, nonprofit, and local government partnerships to deliver local housing and community-based opportunities and assistance to Texans in need.

What can I do now?

PROPERTY TAX EXEMPTIONS: Texas law offers a variety

of partial and full tax exemptions based on ownership, occupancy, and land use. Reference the Resources section for information on eligible communities and where to apply for your tax exemption.

What can I advocate for?

HOMESTEAD PRESERVATION DISTRICTS (HPD): HPDs are designated areas in which property taxes are reinvested to promote housing affordability. Since 2005, Texas state law has allowed cities to create HPDs to support home ownership and prevent the involuntary loss of homesteads by existing low-income and moderate-income homeowners.

ACCESSORY DWELLING UNITS: Renting out an

accessory dwelling unit is a viable source of income for homeowners seeking to offset rising costs of a gentrifying neighborhood. Please consult with a reputable builder or architect before you invest in building an accessory dwelling unit.

DEED RESTRICTIONS: Deed restrictions are agreements

placed upon real estate at the time of transfer which prohibit defined uses. All future owners are subject to previously agreed upon deed restrictions. The primary purpose of deed restrictions is to maintain residential character of an existing community.

VOLUNTARY INCLUSIONARY ZONING (VIZ): Voluntary Inclusionary Zoning links the production of affordable housing to the production of market-rate housing. Cities, who value economic diversity, may incentivise developers to supply a mix of market rate and affordable housing units in exchange for public subsidy, tax incentives, or variances.

NEIGHBORHOOD STABILIZATION OVERLAY (NSO):

Neighborhood Stabilization Overlays help maintain neighborhood character by regulating setbacks, garage location, and height. Texas state law allows single family neighborhoods to enact NSOs. The City of Dallas has allowed NSOs since 2005.

HOMEOWNERS ASSOCIATIONS / COVENANTS:

Neighborhoods feeling development pressure from new higher income earning neighbors may enter into an Homeowner Association (HOA) or Covenant to regulate the character of new and rehabbed homes. Once formed and incorporated, the HOA has the authority to determine rules for development within its designated area. Among other constraints, HOA’s commonly regulate lot density, building height, landscaping and material selection within their territory.

KNOW YOUR RIGHTS AS A RENTER: In Texas, landlords

have the right to evict tenants without reason. However, any violation of the legal eviction process renders the landlord liable for costs incurred by the tenant.

If the Landlord improperly serves Notice of Termination or does not wait the required time periods between notice and filing an eviction, then the eviction may be found in court to be void. If you are being evicted, document all interactions between yourself and the landlord.

RENT CONTROL AND JUST CAUSE EVICTION ORDINANCES: Rent control limits the rate at which rent

can be increased. Texas Legislators have the power to pass new legislation and give local jurisdictions the ability to adopt rent control ordinances, which offers renters protection from gentrification.

Just Cause Eviction Ordinances prohibit eviction without reason. When combined with Rent Control law, Just Cause Eviction law provides comprehensive renter protections against rising rental costs.

COMMUNITY LAND TRUSTS (CLT): CLTs have authority

to acquire, hold, develop, and dispose of real property within a designated area. Depending on community needs and assets, CLTs may engage in a variety of work including commercial, retail, and greenspace development. The CLT preserves affordability by retaining land ownership while leasing building rights to cooperative developers and homeowners.

Important concepts APPRAISAL: The process of estimating, fixing, or setting the market value of real property. This estimate is based on

building type, size, condition, comparables, environmental factors, neighborhood conditions, and several other factors.

APPRECIATION: An increase in the value of an asset over time. The increase can occur for a number of reasons, including

increased demand or weakening supply, or as a result of changes in inflation or interest rates. This is the opposite of depreciation, which is a decrease over time.

AREA MEDIAN INCOME: The middle point of an area’s income distribution. It divides the income range of a region into

two equal groups with half of the household/individuals making above that income and half making below that amount.

CLEAN TITLE: A title of ownership (real estate, car, etc) that is free of all delinquent liabilities such as unpaid taxes, city

fees, or liens, and presents no question of ownership. Ideally a title will have 1 to 2 owners.

FAIR MARKET RENT: The estimated amount a unit would rent or lease for, at any given time, based on its number of

bedroom and geography. Fair market rent is used by HUD in its rental assistance programs, including the Housing Choice Voucher Program.

FAIR MARKET VALUE: An estimate as to what real estate or land is worth, or the amount a property would sell for at that

time. FMV is generally the basis for tax assessment and court awards.

FLIPPING: A quick-profit strategy in which an investor purchases a low to moderately price house, improves it, and

immediately sells it for a profit. Older homes, homes that have maintenance issues, or foreclosures are usually targeted for flippling.

FORCED DISPLACEMENT: involuntary relocation of individuals and families resulting from social and economic pressure

outside of their control.

HOME EQUITY: The difference between the home’s fair market value and the outstanding balance of all liens on the

property.

HOMESTEAD EXEMPTION: Legal protection to the value of a home from property taxes and creditors following the

death of a homeowner spouse. This protection can be found in state statutes and constitutional provisions across the U.S. and is an automatic benefit in some states.

PROPERTY TAXES: Taxes on the value of an owner’s land plus the value of any building on the property. Property values

are determined by the County Appraisal District and the taxes are assessed by the county’s taxing district. Your tax bill reflects your accessed property value multiplied by the county and the city’s tax rate, plus any additional tax districts.

The following local entities collect tax based on property value: • • • •

City of Houston Harris County Harris County Education Department Harris County Hospital District

• • • •

Harris County Flood Control Houston Community College Houston ISD Port Of Houston Authority

QUICK CLAIM DEED: Transfer of real property in which the buyer assumes all liabilities associated with the property in

question.

TITLE SEARCH: A report which lists all liens against real estate property. A Title Search is the basis for Title Insurance.

URBAN RENEWAL: The redevelopment of areas within a city, typically involving the removal of blight.

WARRANTY DEED: Transfer of real property in which all liabilities are resolved prior to closing. At which point the buyer

receives a clean title of the property which is insured by the issuer of Title Insurance.

Resources CITY ATTORNEY’S DEED RESTRICTION ENFORCEMENT TEAM

If you have questions regarding deed restrictions or if you wish to lodge a complaint about a violation, please call the Deed Restriction Hotline at (832) 393-6333.

HOMEBUYER ASSISTANCE PROGRAM

The City of Houston Housing and Community Development Department offers up to $25,000 in down payment assistance to home buyers within city limits. For eligibility information and to apply, visit: http://www.houstontx.gov/ housing/hap.html HOME REPAIR PROGRAM

The Housing and Community Development Department (HCDD) provides home repair assistance through two programs: the Home Repair Program, and the Disaster Recovery Home Repair Program. For eligibility information and to apply, visit: http://www.houstontx.gov/housing/home_repair_programs.html HOUSTON APARTMENT ASSOCIATION

Apartment and other rental housing residents can contact the Houston Apartment Association to speak to a trained consultant and ask questions about renter rights, the Texas Apartment Association lease contract or to file a complaint against their property owner. You can contact the Houston Apartment Association at (713) 595-0300.

PROPERTY TAX EXEMPTIONS

Individuals who identify with the following communities may be eligible for substantial reduction to their tax burden: • Residence Homestead (owner occupant) • Seniors (65 and older) • Disabled Persons • Veterans and immediate family • Surviving spouse of first responder If this sounds like you, visit comptroller.texas.gov and search for tax exemption forms to apply.

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Cover Photo: Abandoned Homes in 4th Ward, Google Earth 2018 “What is at risk?” photo: Abandoned home in 3rd ward, Elaine Morales-Diaz/buildingcommunityWORKSHOP. “What can be gained?” photo: Vanderbilt Avenue in Brooklyn courtesy of the New York City Department of Transportation.

Demographic Shift photo: jens johnsson, www.unsplahs.com Rising Property Values photo: Brandon Griggs, www.unsplash.com Real Estate Development photo: Toa Heftiba, www.unsplash.com Removal of Public Housing photo: 1520 Sedwick Ave., Bronx, New York , Bigtimepeace, CCO Public Domain Increased Police Presence photo: CCO Public Domain, www.maxpixel.net Blight Removal photo: Rob Bye, www.unsplash.com

The purpose of this series is to build an informed and engaged resident base, support organizing efforts and build the capacity of neighborhood leaders to impact disaster recovery planning and prioritize future development in 7 neighborhoods of Houston.

Texas Organizing Project T TX 77004 24044 Caroline St, Houston, 832.582.0061

buildingcommunityWORKSHOP 708 S Main St, Houston, TX 77002 712.304.6277