Houston City Council has approved two affordable housing projects — the Ariza Park Row and Orem Circle projects — after a heated debate last week.
Critics argued against providing developers with over $800,000 in tax breaks. Others advocated for the urgency of affordable rental units for low-income tenants. Julian Ramirez was the only councilmember who opposed the project.
Earlier this month, Councilmembers unanimously approved a tax break deal for the Allora Med Center project, 184 affordable units for residents making 60% to 80% of the area’s median income (AMI) and 182 units priced at market rate.
Ariza Park Row will have more than 300 units, while Orem Circle in Southeast Houston will have 270 units, with 139 affordable units.
Houston-based developer Texas Group is seeking a 100% property tax exemption for Orem Circle, which will use a state program called Public Facility Corporations (PFCs). Developers usually don’t have to pay property taxes for up to 60 years if they pledge to make 50% of the units affordable so low-income families can access them. By law, the city has to approve the tax exemption. Texas Group commissioned a report that it wasn’t necessary to reduce rents in exchange for tax savings, a claim critics vehemently dispute.
Developers who take advantage of the tax break also have to pay the Houston Housing Authority (HHA) a fee for the affordable housing units—between 10% and 15% of the developments’ excess cash flow. The Orem Circle project could reportedly bring in more than $13 million in cash, while Ariza Park Row and Allora Med Center projects could bring in nearly $5 million each.
A quick recap
Council members Amy Peck, Julian Ramirez, and Fred Flickinger delayed voting on the agenda items. Peck argued that the area gets flooded because it is located on Blackshaw Street, adjacent to the Addicks Reservoir, and that such housing units needed to be in “the right location.” Housing Department Director Michael Nichols supported the plan and said using tax exemptions to build affordable housing is “a great idea.”
Ramirez said the city does not have enough information to evaluate the deal and that it is important to understand the project and partnership with HHA, which is not a city department but needs the City Council to approve tax deals. Ramirez delayed the three proposals earlier, arguing that the Orem Circle project “is not affordable enough” for the residents of Sunnyside.
“When you have a plan for at least 50% of the units to be above market rate, that sounds like gentrification to me,” Ramirez said.
He argued HHA needs to “do its job” and negotiate deals that are actually affordable and serve those at a 30% and 50% AMI, not just market rate and above. Ramirez suggested the council use Public Facility Corporations (PFC) to generate affordable housing not just at market rate, instead of giving developers tax abatements when “they don’t pay any taxes at all for housing that the market would’ve provided anyway.”
Mayor John Whitmire has expressed skepticism of the HHA’s current leadership, especially President and CEO David A. Northern, who defended the project.
“It was a major concern how the housing authority was being operated, lack of transparency. We’ve got new board members, but there are still some issues concerning the process. The same developers keep getting additional projects about the lack of designated space for low-income,” Whitmire said.
District F councilmember Tiffany D. Thomas defended HHA, labeling the criticism against its leadership “problematic” when the administration has not met with Northern.
“The reason why Houston is on national news about homelessness is because of the housing authority, not exclusively for the Coalition for the Homeless, because they have their vouchers for us to house the unhoused,” she said. “So to make the point that they’re not transparent is an attempt to assassinate someone’s character.”
In defense of the organization, she said out of all the Houstonians HHA serves, 86% are Black, which is why the administration often considers it a “Black agency.”
“The playbook is not to trust Black people in leadership and money. If you can’t get us on like ethical practices, then you’re gonna attack by character because we have to be 20 times more transparent,” she said after the council meeting. “I can’t let that happen.”
The ‘race factor’ in affordable housing
Thomas said last week the question of housing affordability involves gentrification, the displacement of Black people, and “stabilizing the Houstonians who need to return to their neighborhood.” Council Member Letitia Plummer also supported the proposals.
“Third Ward is no longer majority Black. No one’s talking about the 44,000 units we lost to Harvey,” Thomas said. “We still have to replace those. Every delayed vote gets us further away from that. We have people that still need market break units in their neighborhood. They still need 80% AMI units in their neighborhood.”
For Ramirez, “race has got absolutely zero to do with any of this.”
