Questions from 2640 Fountain View Public Meeting- Public Comment

1:  Briargrove Elementary School is overcrowded, will the development add to

the overcrowding?

We understand and appreciate the concerns regarding Briargrove Elementary School.  We have had robust communication with Houston Independent School District (HISD) staff regarding the issue.  We have been told by HISD that currently, for the 2015-2016 school year the Briargrove Elementary School is over capacity (106%) and some students from the Briargrove Zone are being sent to other schools.  http://www.houstonisd.org/cms/lib2/TX01001591/Centricity/domain/32468/cdr%202015-16/116%20Briargrove.pdf

We have been told by HISD that they estimate the 2640 development to have 60 elementary age students.  Our analysis of current HHA tax credit properties indicated an estimate of 42 elementary age students. 

We have also been told by HISD that they are opening Mark White Elementary School for the 2016-2017 school year as a relief school that will serve four zoned schools, including Briargrove.  http://www.houstonisd.org/Page/71778.  We understand that HISD has decided that Mark White will not have its own attendance zone and that it will take students from Briargrove, Piney Point, Pilgrim and Emerson.  Currently, the students are sent to Memorial and Love Elementary Schools, in the future they will be sent to Mark White Elementary. 

We understand that HISD regularly deals with the issue of overcrowding at many of their schools.  It is their function to ensure that the schools can provide education to the residents of the City of Houston.  This is not a new problem for HISD, they have recently addressed the issue at 10 of their schools without disrupting existing students at the schools.  http://blogs.houstonisd.org/news/2015/11/12/board-of-education-votes-on-attendance-zone-changes-for-10-schools/

2: Can you postpone your development until after Mark White opens?

The development is not planned to open until fall of 2018 which is after the opening of the Mark White Elementary School which is supposed to open fall of 2016.

3:  Are you going to tell these people when they sign a lease, when they come in they are going to have to go 10 miles away to school?  Is that what you are going to disclose?

We will share with prospective families information provided by HISD regarding the school conditions when that time comes.

4:  The proposed location has no green space, where will the children play? 

The proposed development has incorporated amenities for the residents of the development and their family to utilize.  Some of the amenities include an on-site pool, a media/game room, and an interior courtyard. 

5:  Aren’t apartments already overbuilt?

No, affordable apartments in the City of Houston are not overbuilt.  It may be possible that the high end luxury apartment market may be overbuilt, but this is surely not the case for the quality affordable housing market. 

We know that there are approximately 100,000 families in need of affordable housing in the City of Houston, and the significant majority of the affordable housing in the City is 40 or more years old and has not been updated.  Within a one mile radius of the site there are over 15,000 workers making less than $40,000 per year, who currently travel more than 10 miles one way to get to work each day.  We also know that in the local area there has been no affordable housing built in this millennium.  While there is one older rehabilitated property, the TDHCA website indicates there have been no new affordable tax credit developments constructed within 5 miles of the site. https://www.tdhca.state.tx.us/multifamily/htc/docs/HTCPropertyInventory.xls  This development is a step to assist with the supply of quality affordable housing, especially affordable housing with a close proximity to many amenities like grocery stores and employment opportunities that are not found in many areas of the city. 

6:  Will the development overload the local traffic?

No, the development will not overburden the current infrastructure.  A traffic analysis was conducted and submitted in accordance with the City of Houston guidelines.  The current use of the site is for a commercial office building.  Based on the Trip Generation Guidelines the current use of the site generates 141 AM peak hour trips and 135 PM peak hour trips.  The comparison of the new proposed use of the site to the existing use of the site show that the AM rush hour will see a decrease in traffic by 13 trips, and an increase in PM rush hour traffic of 20 trips. 

Overall there will be an increased number of car trips throughout the day and on weekends, but because this is residential instead of office commercial use, the majority of the increase will be during off-peak (non-rush hour) traffic hours.  The City of Houston only requires a full traffic study if there will be an impact greater than 100 trips during a peak hour, more information of the City’s guidelines can be found in the link to the design manual.  https://edocs.publicworks.houstontx.gov/documents/design_manuals/idm.pdf

7:  Can you spend this money for roads, sewer and drainage?

No, the funds allocated for this project are from the United Stated Department of Housing and Urban Development allocated by Congress to construct new affordable housing units.  They cannot be repurposed for other uses and needs of the city. 

8:  What will be the impact on the area infrastructure and sewer system?

The City of Houston has departments that deal directly with these issues.  Nevertheless, the Housing Authority as the developer of the project will have an architect review the requirements for the sewer to the site.  HHA has a pending application for wastewater capacity outflow to Westheimer with the City of Houston.  Along with those required approvals there will be collaboration with the City engineers to make sure that the design will meet all City requirements for permitting. 

Additionally, the development is designed with environmentally conscious approach to water consumption and sewer use.  For example, the fixtures will be low flow in design to ensure efficiency in use of water and energy.  This design approach lowers the cost of utilities for families in the development and ensures sustainability of resources used. 

9:  Will the development cause an increase in crime?

No, the management strategies of the Houston Housing Authority and its partners would likely result in a reduction in crime.  The development will be served by a supplemental contract for security through the Harris County Constable Precinct 6 similar to HHA’s other properties.  The local law enforcement presence at the site will result in spillover benefits which will positively impact crime in the community. 

HHA strictly enforces lease requirements and screening criteria for potential residents of its development.  Unlike many types of housing where an owner may take the first available applicant in order to fill vacancies, HHA residents must pass a criminal background check prior to being offered a lease in one of our developments.

10: How will we know how many families are going to be living in each apartment?

Residents of the development will be required by their lease and state and federal requirements to include all individuals living in the unit on the lease.  Families found to have unreported members living in their unit will be subject to lease enforcement and eviction. 

11: Is the property for non-United States Citizens?

In order to be a resident at this property you have to be a legal resident of the United States.  The property is funded with federal funds and there are strict rule which require the HHA to obtain prove of citizenship or legal immigration status prior to occupancy.  The HUD restrictions on assistance to non-citizens can be found at the following link.  http://www.ecfr.gov/cgi-bin/textidx?SID=41ea02139f852ff6c20e75ff26737fbb&mc=true&node=pt24.1.5&rgn=div5#sp24.1.5.e

12:  I saw the deterioration of other areas of Houston in the 80’s.  How would this not be the same?

The Houston economy is affected by a great many factors, and local economies as well.  Some of the larger factors that have an impact on Houston are the oil industry and the medical industry.  Economic struggles in those industries would have a significant effect on property values and the conditions of some of the neighborhoods.  One significant factor would be the disinvestment that is triggered by an economic downturn.  These are matters outside the control of HHA.  The surrounding neighborhood to this development was not effected during the downturn of the 1980s.  We can assure you, because we would be the owner of the development, HHA would remain invested in the property for the long term.  While private companies have the option of disinvesting in a property or letting it deteriorate, HHA does not have that option.  HHA would ensure that the property maintains its affordable character and is maintained as a high quality development.   Summarily, we are less subject to market forces in our investment and maintenance decisions regarding the properties we own. We would not disinvest in this community and would strive to see its success.

13:  How will this development affect our property values?

It should not affect your property values.  HHA has done substantive research on this issue to ensure that its development activities do not have a negative impact on property values and will provide positive benefits to the surrounding community.  There is extensive literature on the effect of affordable housing projects on neighboring property values.

Early studies found no negative effects and even positive effects of affordable housing on property values.  More recent studies, performed since the 1990s, have employed more advanced methodologies isolating factors of housing developments that, when pursued as part of a development may positively affect local property values. 

These factors are:

Good Project Management: Quality property management is an important variable affecting the impacts that an affordable housing development can have on a neighborhood.  Good property and project management can ensure that a development positively impacts the local community, while poor management may have a deleterious effect on the neighborhood.

Eliminating the Disamenity: Subsidized housing may have positive external benefits in one of two ways: eliminating an eyesore and second creating new housing that provides amenities.  The proposed Fountain View development does both.  First, it would turn a nearly vacant office park into a vibrant residential community.  Second, the new housing development would create approximately 233 units of safe, affordable housing with amenities for families.

Program Type: Research has shown that certain types of housing programs work better than others.  One of the more successful types is the LIHTC program.  Several researchers have found that LIHTC projects improve property values relative to other types of programs.

Quality and Design of Developments: Quality of project design can play a major role in determining the impact of an affordable housing development on a neighborhood. Physical design aspects, incorporation of safety measures, and even landscaping and monitoring of property access can improve the impact of an affordable housing development on a community.  HHA has a track record of good property management and construction of well-designed developments. 

14:  Could you spread people around in affordable housing and not house them all in one building?

This development will be built under the tax credit program which is one of three programs that the Houston Housing Authority operates.   Another program that the Houston Housing Authority operates is the Housing Choice Voucher program.  That program provides rental assistance to spread families throughout the city, and we agree that this is a good approach to affordable housing.   Place based strategies, like this new development also provide opportunities to deconcentrate low income families.  This development is designed with a mixed income approach in mind, with a blend of family income ranges integrated seamlessly into the development.   This mixed income approach replaced the traditional model of developing highly concentrated public housing projects like those built in the early days of the public housing program.  These new style developments integrate better into the surrounding community and provide a better approach to development and opportunities for families.  

15: Can HHA purchase a property and improve it?

One of the eligible activities for grant funds is to acquire and rehabilitate an existing housing property.  HHA has looked at this option and considered using funds to acquire properties on the market and comprehensively rehabilitate units.   The properties that HHA looked had many issues including financial, structural or locational problems that made the option unappealing to pursue for those transactions.   

16:  What about making this affordable senior housing?

While affordable senior housing is a worth wile consideration.  The site’s location and proximity to employment opportunities for our residents make the site a better location for those families that are working in the community but can’t afford to live in the community. 

17: Can HHA use some of the funds to improve education among low-income families, like parental involvement, where their food is coming from, maybe provide a couple of meals a day because these kids go home and have no idea how they’re going to eat?

The funds for this project are slated for construction of units.  That being said the Housing authority does have a division that provides client services to families that participate in its programs.  HHA has very limited resources for dealing with areas outside of the housing scope but in order to fill this gap we work with many community partners to address these concerns.  The Houston Housing Authority is committed to providing support to its low-income, elderly and disabled residents. Families that need assistance in obtaining child care, health care, finishing school or learning a trade, can contact HHA’s client services staff.  The staff leverages HHA funding with other community resources to best assist families to fulfil their goals and meet their specific needs.  

18: What other options have you looked at?  With the cost of this project in a slightly different area, you could serve so many more families who do need affordable housing.

We recognize we will pay a premium to build here.  The value of the site reflects that value of the neighborhood. 

HHA has explored many sites in depth over the last three years.  Originally, HHA’s strategy was to construct as many homes as possible to house low income families and utilize funds in communities that needed investment.  However, that strategy did not honor our commitment to affirmatively further fair housing. 

HHA staff submitted seven original proposals to HUD and other regulatory agencies to determine if the sites were suitable for affordable housing.  Sites were denied for various reasons, including the site was located in a high crime area, an area with failing schools, and area with no access to public transportation, an area with no access to grocery or retail, an area with no job opportunities, or an area that had to high of a concentration of poverty or an area that was racially or ethnically segregated.  The site on Fountain View has very few community stressors, but the land cost was more expensive.  While Fountain View was not the cheapest site available it appears to be the best from a perspective of a sound real estate investment in a strong housing market.  

19: With the map that you guys determined the areas where you would build these projects, is that based on the neighborhood and the school or just the neighborhood?  

The quick answer is we look at the neighborhood and the school before selecting a site.  The expanded answer is that the map is a generalized analysis of certain standards that have been outlined by the Texas Department of Housing and Community Affairs.  Each site is analyzed individually on a number of factors before a determination of adequacy of the site.  HHA’s initial review looks preliminarily at census tract data from the United States Census Bureau.  We look at certain factors such as the poverty rate, minority concentrations, diversity, locations of the nearest bus stop, grocery store, if it is in a flood plain and if the schools meet the State standards.  Once that initial review is complete, the staff takes a deeper look into the location to see if it is in a gentrifying area, or area with private investment, if there are employment opportunities, access to utilities, fire and police stations.  Subsequently environmental studies and appraisals would be conducted in order to comply with the federal site acquisition standards.  A summary of the factors that are evaluated for each site is included in 24 CFR 905.602.  https://www.law.cornell.edu/cfr/text/24/905.602 . Additionally, the Texas rules for site selection can be found in the Uniform Multifamily Rules Section 10.101(a).

 20: Is the point of this to house people, or is it for social justice?

HHA is committed to providing affordable housing opportunities in all of Houston.  As we stated in a previous question there is huge need for affordable housing in Houston. 

Housing and social justice are not mutually exclusive.  The legacy and history of low income housing policy has directed affordable housing to less desirable areas of the community.  We don’t necessarily believe that development in a high quality and marketable area is social justice, but we do know that it is a good investment in both the real estate and the people of the community.  

21: What is and how does the Houston Housing Authority work?

Today’s public housing authorities were created by the Housing Act of 1937 during President Roosevelt’s administration.  HHA was created by the City of Houston’s City Council in 1938.  The Housing authority primarily operates federal programs under Section 8 and Section 9 of the United States Housing Act through an Annual Contributions Contract with the United States Department of Housing and Urban Development.   The Low Income Housing Tax Credit Program was created under Ronald Raegan in 1986.   Although we were created by federal government, we are required to honor the Texas Government Code.  The state law is found in Title 12 of the Local Government Code Chapter 39. 

Our Board of Commissioners consists of seven members, all direct appointees of Houston’s Mayor.  By law, two of our seven board members have to be either residents of public housing or recipients of housing assistance through our housing choice voucher program.  The role of chairman and vice chairmen are filled by a vote of the board members not the Mayor. 

22:  How many HHA Board Members live in your low- income housing projects?

As mentioned previously, two HHA Board members are residents of Public housing. 

23:  Do any members of HHA have a financial interest in the real estate development?

No individual at the Houston Housing Authority (HHA) has a personal financial interest in the development.  It is against the law.

24: Is Lance Gilliam, or Waterman Steele personally involved in the project and was there a there a commission paid?

No fees have been paid to Waterman Steele Real Estate Advisors (Waterman Steele), a firm in which board chairman Lance Gilliam is a partner. 

From time to time Waterman Steele provided real estate advice to the Houston Housing Authority.  By mutual agreement, all services were provided on a pro bono basis and no fees were earned or paid to Waterman Steele.  In late 2014, the firm was retained by the authority to market 2640-2650 Fountainview for sale to third parties.  The listing agreement, approved by the Board of Commissioners with Chairman Gilliam abstaining, provided that Waterman Steele’s services were to be provided on a pro bono basis.  The authority did not receive any acceptable offers and no transaction was consummated.

Like other board members, Lance Gilliam serves a volunteer without compensation.  He has not, does not and will not have any personal involvement in the development except in his official capacity as a member of the authority’s board of commissioners.  Except for reimbursement for some travel expenses Lance has not received any payment or financial benefit from his service to the authority.

25: How are we supposed to find out about the activities of the Houston Housing Authority?

There is a space on this website to input your email address to receive future updates regarding the project.  The Housing Authority also posts all of its board meeting announcements and calendar on its website at the following address.   http://www.housingforhouston.com/about-hha/board-of-commissioners.aspx.  Minutes of each board meeting are included in the following months Board Packet and agenda.

26: Was HHA as transparent as it could have been regarding this development?

HHA has met and exceeded all legal requirements.  Prior to acquiring the site HHA spoke with top officials, Councilman Pennington, HISD Trustee Harvin Moore, the former HISD Superintendent, and other HISD staff.  HHA has been transparent in responding to all requests for additional information about the development. 

The Authority conducts the majority of its work in producing and administering affordable housing throughout the City of Houston.  We have had conversations about the potential development with some community members who are interested in the Housing Authority’s activities and follow affordable housing activities throughout the City.  Some community members are more vested and have more of an inherent interest in participating in the public meetings held by HHA.  Other community members may not be as well involved in following the activities of the HHA.  For those families that may not have been closely involved with the Housing Authority activities we reached out to ensure that they were aware of our plans.  We invited the community and held a public meeting at Briargrove Elementary School on March 9th, with a resounding turnout of interested community members.  At that meeting we presented the potential development and were able to open a line of communication with the community to talk about fears, concerns, and opportunity.

27: Why weren’t people of the community notified ahead of time and why was the meeting with the community held sooner?

HHA sent out notices to the community on February 3, 2016 and HHA posted a sign on February 8, 2016 at 2640 Fountain View for a public meeting held on March 9, 2016 at Briargrove Elementary.  The meeting was well attended by the community. 

The timing was appropriate because it was not too early to prevent us from having educated answers to provide the community, and not too far along to allow for feedback from the community in the planning.   

28: Could HHA publish a timeline of the sequence of events from when HHA started on this project?

The following is a general timeline regarding the more significant milestones:

Prior to 2014 HHA was a tenant at 2640 Fountain View since the mid 1990’s

Early 2014 HHA was notified of the owners pending bankruptcy

February 2014 HHA expressed interest to owner for purchase

March 2014 property is under Contract

April-June 2014 HHA conducts due diligence for property acquisition, drafting contracts, inspecting property, evaluating title and land history, etc.

May 2014 meeting with HISD presenting possible development at 2640

June 2014 HHA takes ownership

July/August 2014 HHA PHA Plan Meetings

January 2015 Environmental Report

March 2015 Initial Elevations

July /August 2015 HHA PHA Plan Meetings

September 2015 Renderings

October 2015 Market Study

November 2015 Geotechnical Study

March 2016 public meeting

29: Can you please provide examples from across the country where this kind of process for this kind of  

housing has gone in and has been successful?

Listed below are some examples of affordable housing being incorporated into high opportunity communities:

Columbia Commons/Columbia Hicks Apartments- Brooklyn, NY (95 apts plus for-sale units in the desirable Cobble Hill neighborhood of Brooklyn): http://uli.org/wp-content/uploads/2011/10/columbia-commons-Columbia-Hicks.pdf  

Montecito Vista- Irvine, CA (162 affordable units in high-cost Orange County, CA):http://www.housingpolicy.org/gallery/entries/Montecito_Vista.html

Fairbanks Ridge- San Diego, CA (200+ affordable units in a larger master planned community):http://www.housingpolicy.org/gallery/entries/Fairbanks_Ridge.html

On the Park- Seattle, WA (mixed-income building in a middle-income & rising area): http://uli.org/wp-content/uploads/2011/10/On-the-Park.pdf

30: Why does the development cost that much money?

This development is a complex mix of financing tools that incorporate multiple sources of public and private investment.  HHA plans to utilize a bond issuance, apply for 4% low income housing tax credits, utilize public housing capital funds and a private mortgage to fund the development activity.  The leveraging of funds in such a way allows HHA to raise the funds need for construction but adds layers of complexity to closing the financing.  This complexity results in higher finance costs. 

Additionally, utilizing public funds triggers many additional requirements including oversight and payment of Davis Bacon wage rates for construction activities, oversight of job training and employment initiatives for low income workers required by Section 3, and oversight of subcontracting goals to ensure adequate minority and women owned business participation in the project.  These factors all contribute to a total development cost that may be higher than other development activities that do not have such complex compliance requirements.    

Nevertheless, the hard construction costs of the development must be competitively bid and the HHA must select the lowest responsive and responsible bidder.  At this point HHA’s architect has developed hard construction cost estimates that are the basis for the proposed total development costs, which are extrapolated from the hard costs.  HHA has received a review of the construction costs by local third party multifamily developers that are currently constructing similar type properties.  The third parties have indicated that costs of construction are comparable to similar types of podium structures constructed elsewhere in Houston.  

In the design, HHA has requested that durable construction material and finishes be used to extend the lifecycle of the development and mitigate the need for capital repairs.  Using durable construction materials in the development would allow for lower operating and replacement costs over the long term.  Quality materials and quality workmanship will add to the appeal of the neighborhood and ensure that property values are not negatively affected by low quality construction.  Additionally, the design incorporates energy efficient construction, fixtures, and appliances.  This energy savings will benefit the operations of the projects and add to the long term viability of the development.

The price of land coupled with the relatively low density of units on a site in this market also results in a higher per unit cost.     

31: Why is it much more difficult for HHA to buy land than private developers?

Prior to acquiring property with HUD funds, HHA must apply to HUD with a site acquisition application and fulfil a myriad of requirements before utilizing HUD funds.  The regulatory requirements are contained in 24 CFR 905.608.  http://www.ecfr.gov/cgi-bin/textidx?SID=96d02a8664d7ee3df77a0b795990edff&mc=true&node=se24.4.905_1608&rgn=div8

32: Why is low income/affordable housing including a pool, fitness center and WiFi in common areas?

There are a few reasons.  One, it is the right thing to do.  Two, HHA intends to build something that is consistent and competitive to the private development in the surrounding area.  Three, a quality amenity mix in an affordable housing development is required by the application for Low Income Housing Tax Credits.  It also provides on-site resources similar to those found in market development which will attract residents to the development.   Please see the Texas Uniform Multifamily development Rules Section 10.101(b).  https://www.tdhca.state.tx.us/multifamily/docs/16-UniformMFRules-10TAC10-SubA-EandG.pdf

33: Why is the HHA charging $6 million for developer fees and what is HHA doing with the money?

Developer Fees are calculated with an underwriting formula proscribed in Title 10 of the Texas Administrative Code Subchapter D.  Section 10.302(e)(7) specifically addresses the underwriting criteria for developer fees and eligible basis for construction costs. https://www.tdhca.state.tx.us/multifamily/docs/16-UniformMFRules-10TAC10-SubA-EandG.pdf

Developer fees earned by a Housing Authority are restricted by the federal rules for program income (2 CFR 200.80).  http://www.ecfr.gov/cgi-bin/text-idx?SID=96d02a8664d7ee3df77a0b795990edff&mc=true&node=pt2.1.200&rgn=div5#se2.1.200_180.

Unlike a private developer that would take the fees as profit, the Houston Housing Authority is required by federal law to only use the fees for affordable housing purposes to fulfill its mission.  Developer fees will not be received for years, but it is likely that HHA would use those fees to construct or acquire new units.

34: How much profit for HHA or the private investor or whoever is getting the money form that apartment?

There is no profit.  HHA is a nonprofit entity and will not make any profit from the property.  If there are any revenues from developer fees or otherwise, they are restricted by law to be used for affordable housing purposes.  Private partners have not been selected as of yet, but the proposals will be reviewed and bid in accordance with the procurement requirements, and the partner with the proposal that is most beneficial to the agency will be selected.   

35: Where is that other $17 million of the development funds coming from?

The portion of the development cost that is not from private investments generated by the low income housing tax credit program or Houston Housing Authority CDBG and Capital Funds will be contributed by a conventional permanent mortgage lender.  The property will support approximately a $17 million mortgage which will be paid from operations and rent collections from the residents.

Who’s the contractor and have you done this before with this company and is there a relationship that we should all know about?

The contractor has not yet been selected for the development.  The contractor will be selected in accordance with the federal, state and local procurement requirements.  The construction will be bid and awarded to the lowest responsive and qualified bidder. 

36: Is HHA going to hire a minority contractor to do this job?

Houston Housing Authority has set a procurement goal for its contractors to subcontract at least 30% of the contract amount to minority firms and women owned firms.  We strive to encourage our contractors, if not minority and women owned themselves, to partner with historically underutilized businesses to achieve an overall 30% goal.  This strategy is included in the Houston Housing Authority procurement policy available at http://www.housingforhouston.com/media/47790/procurement%20policy%20revised%2001.24.15.pdf

37: What’s going to happen to the empty HEB store next door?

The site is owned by JLL Houston.  http://www.jllproperty.us/en-us/houston/retail-property-for-sale/2660-fountain-view/530484?ct=usd.  It is our understanding that the site is available for sale and we are unsure of any future plans for that site.
 

38: Why wasn’t a change of property use posted?

The City of Houston has no Zoning ordinance, the site is platted as “unrestricted” thus a notice was not necessary.

39: Do the 4% tax credit need all the elected officials in the area to provide consent?

No, the application for 4% tax credits only requires the submission of a resolution of no objection passed by the City’s Governing Body.   

40: How set in stone is the plan?

The development is not a done deal.  There are still approvals necessary at the federal, state, and local level in order to move forward.