1999 Housing Assessment: Barriers

Quality/safety, accessibility/availability, and affordability are the three key components of housing. Within each of these components are major barriers to housing that must be addressed in order to overcome the housing crisis in Travis County.

QUALITY AND SAFETY

At least 58,690 Austin households have a housing need, meaning they live in substandard or overcrowded housing or are paying more than they can afford. At least 11,000 households are overcrowded and approximately 40,000 people are living in substandard housing (Through the Roof, July 1999).

Note: Categories are not mutually exclusive.
Source: "Through the Roof", July 1999.

Overcrowded Housing

According to federal standards, an overcrowded household is one in which there are more family members than there are rooms (not including kitchen and bathrooms) (TLIH, 1999). Those in overcrowded housing are usually at the lower end of the income ladder. Some reasons for overcrowding are affordability and lack of public housing. For example, two full-time minimum wage workers cannot afford a modest two-bedroom apartment in Austin, and the current waiting period for Section 8 public housing is two years.

One example of overcrowded and substandard housing that has been highlighted in recent news stories is the Rio Motel. Persons with little to no income find that the motel is affordable because it allows 4 adults/guests per motel room and does not require a credit history check or a large down payment. The Rio Motel's monthly charge is $600, which includes local phone service, water, utilities, cable, and maid service. This monthly charge is affordable in comparison to average rents, when split among four individuals. However, even two adults in a motel room would be defined as overcrowded, according to federal standards.

Overcrowded conditions also exist in the owner-occupied housing stock in Travis County. Many families continue growing long after a house has been purchased, and sometimes relatives and friends come to stay until they can find their own place to live. Many households have also taken on the responsibility of providing elder care for grandparents, in addition to the care of children already living in the household. These conditions often combine, resulting in households where there are at least two or three people per room. Many mentally ill residents in unregulated boarding homes also live with overcrowded conditions.

Substandard Housing

Substandard housing is defined by the U.S. Census Bureau as a housing unit lacking a complete kitchen or bathroom. Dwelling units that do not meet standard conditions but are feasible for rehabilitation are also defined as substandard. This does not include units that require only cosmetic work, minor livability problems, or maintenance work.

Different housing service providers appear to define adequate housing in varying ways. For example, the U.S. Department of Housing and Urban Development requires public utility companies to heat apartments for low income families, but until recently refused to pay for air conditioning. Consequently, the Austin Housing Authority, who is funded by HUD, had not provided air conditioning to 1,928 low-income apartment units in Austin for 33 years until an especially hot summer in1998 motivated them to reconsider their policy. That summer, the board agreed to pay for installation of air conditioning units in 164 downtown apartments with local funds. The AHA plans to install air conditioning in all of its other housing units for low-income families over the next four years (Thatcher, 1998).

As stated by local providers, "the level and amount of housing repair need in the community is equal to or greater than any level of need that has existed since 1990." In Travis County there are hundreds of substandard houses. In many cases, elderly homeowners are unable to repair their houses themselves, and do not have funds available to hire a contractor. Unfortunately, problems are often ignored until they have multiplied, and houses are too badly deteriorated to repair. In FY 1999, 263 eligible families requested services from Travis County's Emergency Home Repair and Weatherization Program (see Figure 5). This number of families was double the amount that requested services in 1997 (counts for 1998 are spuriously high).

Source: Travis County Emergency Assistance Program.
Note: The inflated number of households counted in 1998 reflects a procedural change that resulted in the over-identification of the number of homes actually needing services.

In a brief survey of 112 homes that had requested help from Travis County Housing and Weatherization Services, it was found that the homes needed a wide variety of repairs (see Table 6). The most common needs were for plumbing, ceiling, wall, and roofing replacement or repair services.

Table 6.
Housing and Weatherization Services Requested from Travis County Emergency Services, August 1999 (Based on a sample of 112 homes)

TYPE OF HOUSING / WEATHERIZATION SERVICE	NUMBER OF SERVICES REQUESTED
Plumbing	51
Ceiling and wall replacement or repair	45
Roofing replacement or repair	36
Window and door replacement or repair	22
Structural repair to the floor	19
Electrical	9
Air conditioning system	8
Heating system	6
Accessibility modifications or installments	3
Total number of services requested	207

Source: Travis County Housing and Weatherization Services, August 1999.

The conditions of the homes certified as eligible in the County housing programs are far more deteriorated than those in the general community, creating risks that some contractors are unwilling to take to complete repairs. Moreover, the cap on material expenses means that contractors often cannot complete all necessary work and must leave the home still in poor condition. In addition, Travis County does not provide enough funds to repair homes to meet existing code requirements, which can necessitate a referral for housing repair services to other community organizations after the County crews have finished their work.

This referral process reflects a strength in the housing repair system. The few non-profit organizations who provide volunteers and resources to fix existing housing problems work together and coordinate their activities in an attempt to address all of the needs of each household. Among the organizations that coordinate services are: Travis County's Emergency Home Repair Program, Hands on Housing, Habitat for Humanity, and the Urban League (see "Austin's Commitment to House the Poor" and "Through the Roof" for further details). Based upon input from a housing focus group conducted in November of 1999, area housing experts unanimously agreed that the number of programs focusing on repairing existing housing is far too small to meet the needs of the Travis County community.

Colonias

There are an estimated 1,500 colonias statewide with 360,000 residents (Garcia, 1996). Although the term "colonias" is technically defined as a substandard community located within 150 miles of the Texas/Mexico border, the term is widely used to refer to any type of substandard housing development within the state of Texas. Most colonias exist along the South Texas/Mexico border in the Lower Rio Grande Valley, but many are also located in rural Texas.

In August of 1998, Governor Bush assigned his Secretary of State, Al Gonzalez, to investigate colonias. In addition to visiting colonias along the Texas Mexico border, he toured Kennedy Ridge, a subdivision located almost 10 miles east of the capital in Travis County, where as many as 14 households had no water or sewer service. He said the conditions in Kennedy Ridge were worse than in many colonias he had seen, with children's toys lying in ditches with sewage (Ralph Haurwitz, August 1998). Wastewater drained directly onto the ground, exposing children and animals to serious health risks. Many residents could not afford water and sewer system hook-up fees, which ranged in cost from $5,000 to $8,000 per household. Other residents were disconnected from the service when they stopped paying their bills (Ralph Haurwitz, July 1998).

Texas State law has contributed to the continuing development of colonias. The Elgin Bank vs. Travis County (January 1996) ruling allows some residential developments to disregard the subdivision platting process, the system that requires standardized lot sizes and adequate utility services. As long as lots have streets that extend to existing roads, the developer can escape county supervision. This had led to the emergence of "flag pole" subdivisions -- long narrow roads that extend off existing county roads and have a cluster of homes at the end of the road. As a result of the Elgin Bank decision, developers are not required to provide utility hook-ups, proper road access, or drainage systems (Through the Roof, 1999). Lack of proper structural resources makes it difficult for fire & emergency services to locate unregistered developments and to reach them quickly. The Texas Legislature granted border counties much broader regulatory authority in an effort to curtail the development of colonias in that area, but these regulations do not apply to the rest of the state (Haurwitz, 1998).

Most counties are urging the Legislature to revise the law so that all developers must file a subdivision plat when starting to build or sell tracts. Other counties want lawmakers to at least grant powers equivalent to those already given to border counties. The Legislature failed to pass any of these proposals during the 1996-97 session, but counties will push for the changes again in 1999. Several bills have been submitted for consideration. In contrast, real estate lobbyists and land developers statewide have long opposed strengthening the ordinance-making authority of county governments (Garcia, J., 10-23-1993).

In these unincorporated areas, it's up to the county commissioners to maintain the streets. Suing colonia developers to make improvements has worked in some instances, but colonia residents rely mostly on help from county programs, which include using state grant money to set up centers where residents can get health services or apply for home-improvement and small business loans. The Texas Water Development Board estimated that providing Texas colonias with clean water and sanitary sewer systems will cost more than $600 million (The Austin Chronicle, 1996).

Substandard lots are primarily purchased by low-income families who are U.S. citizens. Lack of affordable housing has created a pressing need for alternatives. Families are often promised public utilities, septic systems, sewers, and roads, but these services are either poorly installed or never completed (Garcia, 1993).

Impact of Colonias

Social Equity and Health

One negative impact of colonia housing is the increased need for health prevention services. For example, in 1998, almost 3,000 students in elementary schools in northern Hays County were vaccinated against Hepatitis A (Shaw, 1999). These children have an elevated risk of contracting Hepatitis A because they live in neighborhoods with leaking septic systems and poor drainage (Haurwitz, R. K., 07-15-1998).

In spite of the substandard living conditions, many residents are grateful because colonias offer an opportunity for home ownership. Although stricter development laws would improve the living conditions, they would also raise the base price of each home/property. Developers report that building a home in a rural subdivision with basic services would cost between $30,000 and $40,000, a price that most colonia residents could not afford. These residents currently pay $150 a month in the colonia, and have no credit history or bank accounts (Garcia, 1996).

Many residents who move into these poorly developed rural subdivisions purchase pre-manufactured/mobile homes. Although manufactured or mobile homes are more affordable, the quality of mobile homes is not as high as permanent housing structures, and the financial investment differs greatly from investment in traditional houses. The value of a manufactured home decreases over time whereas permanent homes tend to increase in value. For example, a mobile home may be almost worthless by the 15^th year of a 30 year mortgage, yet owners continue to pay for it another 15 years. As a result, families are left with no home equity, and lack the ability to use the sale of their current home in order to move into a larger or more traditional residence.

Safety

"Flag pole" subdivisions create safety problems on nearby county roads. Due to insufficient drainage systems within the subdivisions, the drainage systems along the county roads become overburdened and flooded by the subdivision's runoff (Shaw, 1999). In addition, because many "flag pole" lot roads are unpaved, during inclement weather they become impassable. Consequently, residents must park their vehicles along the side of the county road and walk into their neighborhood. These parked vehicles create a driving hazard for other vehicles and limit the maneuverability of emergency vehicles trying to enter the subdivision (Shaw, 1999).

HOUSING AVAILABILITY

Housing availability issuesare pervasive in the Austin area. With 97 percent occupancy rates, and new single family homes being purchased before they are built, Travis County residents are becoming desperate for any housing. Renters are having trouble finding any available units, and houses put up for sale are sold in a matter of days, or even hours. Housing being built is beyond the reach of lower income residents. Of the over 6,000 homes built in 1999, only 20 percent were priced below $110,000. Only 15 percent of the 4,312 apartment units new to the market in 1998 were moderately priced ("Pricing Austin out of the market?", July 1999).

Recently, a very powerful example of the lack of housing in Travis County was highlighted in an article by the Austin American Statesman. In November of 1999, the State had to rent military barracks for jail guards who have been brought into town to work at the local state jail. The barracks are being provided to prison employees on a temporary basis, because so many were having problems relocating to the Travis County area. Although prison guards do not make enough money to afford an average priced apartment, State Jail Division Director Tom Baker said it best when he remarked, ".the biggest problem is there are very few apartments available at all - at any price." (Austin American Statesman, November 1999)

AVAILABLE FUNDING FOR HOUSING PROGRAMS

The primary cause of the lack of available public housing is that Federal resources for publicly funded housing programs have not kept pace with the rapid population growth in Travis County. The federal funding that the Housing Authority of the City of Austin (HACA) receives has declined almost 20 percent in the last two years, from $21.2 million to $17.8 million. As a result, HACA has been unable to create new permanent affordable housing units. HUD has also decreased the maximum rents it will pay in the Section 8 voucher program in order to cut costs ("Through the Roof", July 1999). In an economy where 97 percent of rental units are filled, there is very little incentive for landlords to accept Section 8 vouchers, especially if the maximum rents are decreased.

HOMELESSNESS

Lack of available housing also has a significant impact on the success of Austin's service providers in helping homeless persons achieve self-sufficiency. Without adequate housing available in the community, homeless persons who have successfully completed shelter, treatment, job training, and other self-improvement programs are unable to take the final step toward independent living. The lack of housing also restricts the availability of other services in Travis County's continuum of care for homeless persons. Because there is not enough affordable housing for homeless persons to move into, homeless persons tend to stay in shelters and transitional housing longer than is necessary. This results in a bottleneck in the system, restricting access to shelter and transitional housing for those who are still on the streets.

LACK OF INFORMATION

Even though First Call for Help and Hotline for Help are tasked with being the information distribution centers for social services throughout Travis County, there are sometimes instances when information is outdated, or when people are not aware of these call centers. As a result, neither residents nor service providers are fully aware of the housing options available.

HOUSING DISCRIMINATION

According to an Urban Institute study, in the Austin area nearly half of all Hispanics and more than 40 percent of all African-Americans who applied for loans in 1997 were rejected, compared to 22 percent of White loan applicants. Similar financial information was presented when the study was conducted in order to eliminate income or credit history as possible factors for the differences. This study also found that minorities are less likely to receive information about loan products, and are more likely to be quoted higher interest rates than White people are. In the United States today, 73 percent of White families own their own home, while only 46 percent of black families and 45 percent of Hispanic families were homeowners ("Housing Secretary says Discrimination Persists", September 1999).

Discrimination in housing has a long history in Travis County, dating from 1929 when the City's first comprehensive plan designated a "Negro district." This discrimination in housing persisted through the 1950s, when the City Planning Commission continued approving plans that prohibited blacks and Mexican-Americans from living in certain subdivisions (McIver & Associates, October 1996). This legacy and current discriminatory practices perpetuate racial division in this community.

In order to reverse this trend, the City Council established an Affordable Housing Policy in 1987 that prompted the implementation of homeownership programs for low-income people. Additionally, the City Council gave responsibility for handling fair housing complaints to the Austin Human Rights Commission (McIver & Associates, October 1996). The City of Austin also contracted with ADAPT of Texas, Inc. to promote and conduct a seminar on the fair housing rights of individuals with disabilities (City of Austin Consolidated Plan, August 1998). These efforts have begun to address the segregation and fair housing issues in Travis County.

Renters also experience additional barriers in housing practices, as more and more apartment complexes conduct credit and criminal history checks. Barriers such as these prevent many residents from securing affordable housing.

NIMBY

Another issue that affects housing availability/accessibility in Travis County is the "NIMBY" or "Not in My Back Yard" attitude. This is a common problem for developers who try to build affordable housing in existing neighborhoods, but encounter road blocks put up by neighborhood organizations or community groups who fear that such projects will lower property values.

In 1998, neighbors protested an affordable housing project on Slaughter Lane in South Austin, and another project on Manchaca Road. Neighbors had concerns about the maintenance of the sites, despite the fact that Central Texas Mutual Housing (the management organization) has a strong track record for maintaining its properties ("City's NIMBY Epidemic," June 1998). In 1997, the City Council opposed an affordable apartment complex in Northeast Austin after residents complained that it would cause crime ("NIMBY Bug Has Struck City's Affordable Housing", December 1997).

The NIMBY phenomenon can be beneficial to neighborhoods when it succeeds in preventing hazardous uses of property near residential areas, but when applied to affordable housing, it can have the negative effect of perpetuating racial division and exacerbating other social problems. Although studies have shown that subsidized housing developments do not negatively impact the value of surrounding property and have the ability to diminish social problems ("Through the Roof", July 1999), organizations in Travis County continue to mobilize to prevent such developments. Unfortunately, stereotypes about housing for families who earn less than the average city income are not easy to overcome.

AFFORDABILITY

As is explained in "Through the Roof," Travis County has a severe shortage of affordable housing. In comparison with larger Metropolitan Statistical Areas in Texas, Austin's housing market is the most expensive. The wage that a worker would need to earn per hour to be able to work 40 hours per week and afford a two-bedroom unit at the area's Fair Market rent is at least $10, 200 percent of the current minimum wage of $5.15 per hour (Out of Reach, September 1999).

For families trying to purchase their first home, the largest obstacle that they face is saving for a down payment and closing costs. For low-income renters, the barrier is saving for the first and last month's rent payment and for damage deposits. Another problem is bad credit. Underwriters usually require at least two years of clean credit in order to qualify for a mortgage. Lower income persons can take advantage of local credit counseling programs to begin to address this problem. Down-payment assistance programs exist to help first-time homebuyers, but similar programs for renters are rare. Down payment assistance programs are popular because the investment per person is relatively low, and more people can be served with the number of dollars available. The drawback to this "helping more people is better" philosophy is that moderate-income people who qualify for first-time homebuyer programs are not those who are most in need. The very low income people who need housing assistance may require more expensive services, which means that the funding dollars won't be stretched as far.

LOCAL POLICIES

In response to suburban sprawl, the City of Austin has adopted a Smart Growth plan, which limits the development of land on the City's fringes. However, as available land within city limits becomes scarce, competition for that land drives up land costs, which in turn drives up housing costs. Portland has long been a model city for "Smart Growth" but is currently experiencing a housing affordability crisis, in part because of Smart Growth efforts. (George Passantino, October 1999) Planners in Travis County will have to walk a fine line between preserving the environment and keeping housing costs down. The City of Austin is also considering a "SMART Housing" proposal that would give builders/ developers providing new housing in designated areas waivers and expedited processing for including up to 40 percent of the units at affordable rents/ prices.

The City of Austin's permitting processes for building houses are extremely lengthy, and delays in construction translate into increased costs in housing. In order to process a fifty-lot construction project in Austin, the Texas Capital Area Builders Association estimates that it takes a year and a half. In Cedar Park, it only takes eight months, Pflugerville takes one year, and Round Rock only takes six months. Austin also has high development fees, at an average of $4,163 per lot. When compared with Dallas, Houston, San Antonio, Round Rock, and San Marcos, Austin's development fees, on average, range from 20 to 120 percent higher ("Through the Roof", July 1999). Because of high building costs, developers often find that the only way they can afford to build housing is to focus on the most expensive housing developments. This leaves lower-income residents with fewer options, and forces the market to rely on older housing stock for lower-income residents.

City environmental laws designed to protect the aquifer limits land uses as well. A consequence of these protective policies is the increased cost of development in sensitive areas, which results in development of more expensive housing in sensitive areas. Costs are increased because of lower allowable densities, larger lot sizes, construction of water quality and detention ponds, limitations of infill and redevelopment in these areas and of additional foundation work required to deal with shifting soils (Through the Roof, July 1999).

BARRIERS