Retrying Failed Housing Policies in Houston

In a opinion piece in today's Houston Chronicle, an owner of many apartment complexes and housing advisor the mayor, David Mincberg offer solutions to the so-called problem of Houston housing costs, which are terribly misguided. Anyone with a basic understanding of economics knows that his solutions will only raise rents. Investment of capital to improve some neighborhoods will increase the desirability of to live in those apartments and hence an increase in rent. Removing a couple buildings in complexes might improve green spaces, but reducing supply will only increase prices. Tearing down and rebuilding apartment complexes will also increase prices as builders must recuperate their costs.

None of his options actually involve increasing the number of apartments, which is the correct solution if Houston is expecting an increase in population. The easiest way to cut rent prices is to increase supply. If builders construct new apartment complexes, Houstonians with higher incomes will likely move there. Then the complexes that are older will be forced to lower rent. Every city that has dictated rent control and created open space laws, end up with high rents and slums.

Houston already has some of the more affordable housing in the country, especially with contrast to its size. It’s significant that one person on minimum wage can afford to make rent and have some money leftover. Let’s not forget that good workers don’t stay at $6/hr for long. Houston’s costs are much lower than many other major cities, because it lets the market work. The other half of the equation is that Houston likely has an oversupply of unskilled labor due to illegal immigration. However, other locations need people and hence some may need to move.

As a final thought, it seems suspicious that Mincberg is championing policies that would actually raise rent. Perhaps he would like to increase profits without having to build. Very dodgy indeed. If the CEO of Exxon was the head of the Council on Alternative Energy, everyone would be rightly concerned.

Barbara Ehrenreich, the journalist who recorded her experiences living on the low end of the legal economy in her book Nickel and Dimed, learned first-hand the truth that all low-wage earners in America face today: lack of access to affordable housing is an enormous problem. That problem exists in Houston today.

It may not be glamorous, but the crisis in affordable housing impacts us all. Lack of housing increases homelessness, increases truancy and juvenile delinquency, and decreases economic opportunities for otherwise hardworking people. A city can not survive or prosper in these circumstances.

Half of Houston's population lives in rental housing. One million people. When you look

at the incomes earned by Houstonians, they don't fall in a neat bell curve. Instead, we have a two-hump curve; one small hump of high wage earners, like engineers. A much larger hump on the income curve is the number of people employed in Houston making $6 or $7 an hour, or maybe $60 a day.

Doing the math is pretty easy.

Sixty dollars times five days is $300 per week. Four weeks per month means $1,200 per month of total income. Since half the households in Houston are composed of one or two persons, this means total household income for a substantial portion of our residents is just that: $1,200 per month. With the cheapest apartments renting for $500 per month plus utilities, many families double up, live in cars, or make the tradeoff between food and electricity.

Drive in some neighborhoods and you'll notice the large number of little hibachi grills in the front yards of apartment units. Barbecue lovers? No. People without electricity.

Low incomes explain the large number of homeless and near-homeless employed persons in Houston, because people who want to work must have a car to get to employers. Look through the Chronicle's Help Wanted section, and you'll find more than 4,000 current job openings, mostly in places not accessible by public transportation. If you can get to La Porte, you can make $20 per hour as a painter's assistant. Forklift drivers in northwest Houston earn $9-$10 working in a warehouse. An ice cream shop is hiring scoopers in a convenient location on Kirby — at $6.25 per hour.

Many Houstonians ask: Aren't there programs? Aren't there vouchers? Aren't there places for people to stay?

The answer is a qualified yes. Some programs do exist, but the waiting list for assisted housing has the names of more than 18,000 families.

The 2000 U.S. Census predicts that Houston will add 350,000 more people over the next five years, with the greatest demand coming from workers requiring housing that costs $400-$600 per month. The apartments that are available in this price range are frequently in terrible condition. Every week, it seems we read another report of poor living conditions and rampant crime in apartment communities. This condition needs to change, now, if Houston is to remain a growing, viable city.

Houston has three options to help multifamily communities.

• First, the rehabilitation of existing units through significant dollar investments will improve properties in targeted neighborhoods.

• A second choice is the teardown of one or two buildings within selected complexes to decrease density and create green or community space as appropriate.

• Finally, the complete teardown and rebuilding of non-livable apartment properties may be appropriate. Each of these options will improve the quality of life for the 50 percent of families not able to own their own home yet. Having enough safe, decent, affordable housing units helps Houston draw a qualified workforce and keeps our economy strong. Government, civic leaders, businesses and all people that call Houston home have a stake in the success of getting enough affordable housing units here in Houston.

David Mincberg, chairman and CEO of Flagship Properties Corporation, currently serves as Mayor White's special assistant for Multi-Family Housing Policy. Houston Chronicle