I am supporting the the Texas Department of Housing & Community Affairs Round 2 plan for CDBG housing assistance for Hurricane Rita victims. The state has decided to oversee the rehabilitation and rebuilding of houses through a private contractor rather than handing checks out to hurricane victims.
After seeing first hand the problems low-income families and particularly the elderly are having in dealing with contractors and getting repairs done I think having the state stay involved to oversee the process makes sense. That said, this approach brings with it a whole host of potential pitfalls.
I have tried to be upfront with TDHCA about what I see as these potential pitfalls in hopes they will figure out a way around them. One of my major concerns has to do with the decision to contract with a handful of large home builders to rebuild 3,000 to 4,000 homes.
Here is my advice…
Heed the lessons from the HUD 235 program
My overarching concern has to do with the quality, suitability, and design of the replacement housing units. It is critical that we do not repeat the mistakes of previous HUD programs that produced large quantities of marginal quality single-family housing units in close proximity to one another that quickly deteriorated and lost value both as individual housing units and as an entire community. We should learn from the mistakes of the HUD Section 235 Program that produced these unfortunate results.
Retrospective studies of the HUD 235 Program determined that the critical failures were the production of houses using marginal to low quality construction techniques, fixtures and finishes, coupled with the failure to adequately prepare the low-income home buyers for their maintenance responsibilities.
In the effort to limit costs and produce the highest number of units that underlies the Round 2 Program I do not believe that we have adequately heeded these lessons.
Emphasize quality and suitability
I am concerned about the size, in terms of square footage of the houses the Department proposes be built. While I believe that homes of this size are appropriate for single persons and the elderly couples I do not believe it is appropriate to provide a house as small as 800 ft. to a three to four person household.
We should also remain aware of the social and economic forces that often require low-income families to occasionally take other low-income relatives into the house. Often times the new houses built under this program will be replacing an older house of a substantially larger size. The large existing houses could easily accommodate the temporary or semi permanent housing of relatives and adult children as economic circumstances required. The replacement houses will become severely overcrowded in these circumstances. I would urge that consideration be given for increasing the minimum square footage of each of the three proposed structures.
I also urge that much more specificity be provided regarding the quality of materials and finishes included in the specifications within the RFP TDHCA has released to home builders who want to bid to build the new houses. As it is written, the RFP is singularly devoid of most specifications. In my opinion, this will result in the bidders offering inferior materials that will not stand up to the type of wear and tear to which the houses will be subject.
It has long been understood that in the provision of subsidized housing special consideration must be given to the incorporation of extremely durable materials and fixtures in order to minimize accelerated deterioration of the housing. The frequent presence of large numbers of small children, coupled with a lack of financial resources for repairs and the absence of knowledge and experience regarding home maintenance requirements means that houses occupied by lower income families are often subject to more severe wear and tear than typical homes. This was another lesson learned through the HUD Section 235 Program.
In visiting a number of people who are now applicants to receive replacement homes I have noted that quite a number of them have had rehabilitation performed on their homes under HUD funded programs in previous years. While the damages from Hurricane Rita are the main reason for the current need for reconstruction I have seen several cases in which the repairs provided through HUD rehabilitation programs have not held up well and are contributing today to the substandard conditions in the homes. It is of critical importance that we not repeat those mistakes by using inferior materials and finishes in this round of repairs.
The many families with extremely low incomes who will be receiving houses under this program will simply not have the financial resources necessary to replace appliances which wear out prematurely or to repair low quality plumbing fixtures that cannot stand up to reasonable use.
Good design is important
The homes that will be replaced under the Round 2 program are often located in older historical neighborhoods in which the homes that will be torn down have contributed to the architectural character of the entire community. If the Round 2 program is not careful it will introduce into these neighborhoods a house that is incompatible. Placing a poorly designed, suburban style, low end, tract house into these neighborhoods will depress property values of the surrounding houses and accelerate neighborhood deterioration.
Aside from this negative effect upon the entire neighborhood there is a risk of stigmatizing the residents of the rebuilt house if it stands out from the surrounding structures as an incompatible housing type. We must be cognizant of the fact that the Round 2 program will be rebuilding a very large number of homes at a relatively high level of concentration within some urban neighborhoods in Southeast Texas. If these homes all have a similar appearance that is easily distinguished from that of surrounding houses then the occupants are going to be easily identified by the public as recipients of a federal housing subsidy. The negative public reactions to public housing residents and to Katrina evacuees are not something that we should consciously direct against the Round 2 recipients.
Home buyer education should be mandatory
I would urge that a financial literacy and homeowner training program be established and that all of the persons assisted under the program be required to successfully complete the program.
Immediately upon the completion of the house each homeowner will have an asset of considerable value. They need to be educated about the need to budget sufficient funds for long-term maintenance of their homes, to budget for the immediate increase in property taxes they will be subject to. Education also needs to be provided regarding the perils of subprime home equity loans.
Simple and basic information regarding the importance of home maintenance needs to be part of the curriculum. The need to inspect for water infiltration and various forms of deterioration and to immediately address these problems must be made clear to the homeowners.
Also, the homeowners need to be educated regarding the provisions of the homeowner’s warranty and told what is covered and what is not and how to file a claim.