Slummy Apartments

[drfunk]

So, specifically I'm thinking of the complexes lining the west side of Renwick between Beechnut and Bissonnet, but I see this situation in many places around Houston.

Bellaire to the east is obviously nice and high-$ land, and most of the neighborhood to the west of these complexes is also pretty nice, leafy streets with some tear-downs, even (of course, Gulfton is on the other side of Bissonnet, and that's a whole different animal). I never quite understand how these complexes that are visibly decaying, crime-ridden, and ugly can survive surrounding re-development & appreciation. Do the complex owners really make enough money on the (assuredly quite low) rents that they aren't tempted to subdivide the land and sell it off, or else redevelop it into townhouses or something themselves? Also, are they really as sleazy as I imagine them to be, that they have no concerns at all about the effects of their little cesspools on the surrounding neighborhoods, i.e., gangs, drugs, homicides, petty theft, etc etc, that seem to emanate from them? Doesn't their insurance become prohibitively expensive as the buildings themselves rot, and the safety threats begin to escalate over time?

[Fringe]

Also, are they really as sleazy as I imagine them to be, that they have no concerns at all about the effects of their little cesspools on the surrounding neighborhoods, i.e., gangs, drugs, homicides, petty theft, etc etc, that seem to emanate from them?

Unfortunately Houston is full of slum lords. It would be nice if the city could make life miserable for them but instead the city seems to cater to these types.

[TheNiche]

So, specifically I'm thinking of the complexes lining the west side of Renwick between Beechnut and Bissonnet, but I see this situation in many places around Houston.

Bellaire to the east is obviously nice and high-$ land, and most of the neighborhood to the west of these complexes is also pretty nice, leafy streets with some tear-downs, even (of course, Gulfton is on the other side of Bissonnet, and that's a whole different animal). I never quite understand how these complexes that are visibly decaying, crime-ridden, and ugly can survive surrounding re-development & appreciation. Do the complex owners really make enough money on the (assuredly quite low) rents that they aren't tempted to subdivide the land and sell it off, or else redevelop it into townhouses or something themselves? Also, are they really as sleazy as I imagine them to be, that they have no concerns at all about the effects of their little cesspools on the surrounding neighborhoods, i.e., gangs, drugs, homicides, petty theft, etc etc, that seem to emanate from them? Doesn't their insurance become prohibitively expensive as the buildings themselves rot, and the safety threats begin to escalate over time?

There's probably someone on HAIF (you know who you are) who would be a better expert opinion on why slummy apartments in this submarket aren't being targeted by developers for teardown. In addition to the reasons that I'm about to explain, there's usually a back story regarding the seller's way of thinking that I'm not privy to (since I'm usually coming from the buyer's side). I'm willing to bet that sellers were thinking something along the lines of that "cap rates on Class C and D properties got very low, so they tried to cash out, but got greedy expecting for there to be a redevelopment trend and most couldn't get a fish that would bite at such high prices for such a crappy area; others were probably too late to the party."

Here's the redeveloper's/buyer's perspective on why the Gulfton submarket sucks cellulite-ridden stretch-marked ass:

Once you're west of the Bellaire city limits, there are so many crappy apartment complexes so close together that there's not a single place where a developer could knock down and re-build and in so doing change the character of the area enough to entice young professionals to live there at rents such as would be suitable to justify the construction. This differs from inner loop neighborhoods because they were built out mostly as subdivisions with apartment complexes scattered throughout. If there's a crappy apartment complex that has been a blight upon a neighborhood for a long time, you can knock it down and without even building anything immediately have raised the profile of the neighborhood and increased everyone's land values. Don't get me wrong, this is not by itself a viable business model; whatever land value increase is achievable through demolition of a slum cannot entirely make up for the loss of the value of the improvements on the property or the cost of demolition. But it does illustrate how there are synergies from the act of demolishing crap in a a neighborhood and making that neighborhood appealing to yuppies in the near future; this could not be achieved if more crappy apartments were just right next door.

Also, whereas the inner loop apartment complexes that have gotten knocked down are typically not especially dense, the complexes in the Gulfton submarket have many more units per acre. Because they're so much more compact and intensively developed, there's a higher opportunity cost to knocking it all down. To replace something so dense as these apartments with something so much less dense as townhomes wouldn't have been possible.

But all these comments apply best to the area just on the western fringe of Bellaire. Once you get up along Renwick, you're so far into the jungle that it's just absurd to think that development on vacant land, much less already built-out land would be viable. Nobody with the means to live in new-construction residences wants to be surrounded by little El Salvador.

[RedScare]

Unfortunately Houston is full of slum lords. It would be nice if the city could make life miserable for them but instead the city seems to cater to these types.

The conditions that produced the Gulfton slums is a story 35 years in the making, and includes the entire history of Houston's boom to bust to boom cycle of the latter 20th century. To dismiss it as the City "catering to these types", is to ignore the last 35 years of Houston's economy. While a comment like this would surely provoke a nod of agreement from those who express disdain for Houston city government on any issue, it also shows a shallow or even non-existent knowledge of how the area became what it is, and more importantly, what caused it.

[TAK]

TheNiche is mostly correct and used "cellulite-ridden stretch-marked ass" which i found amusing.

If you were the owner of a whole area of 'slummy' apartments, you'd be collecting a lot of rent, and that's all you'd care about from a business standpoint. What value would there be in tearing it all down to build something new? How much could you actually raise rent to cover for the lost rent and the cost of knocking down and rebuilding? How saturated is that area with units? blah blah blippity...

poor people need housing, too. and with the prevalence of NIMBY, and a boom/bust economy, you'll be hard pressed to make much change. i have the same thing in my 'hood... inwood forest is surrounded by apartments... some were once considered nice THs... but now, they're all just 'slummy apartments' that someone is making a killing on. The homeowners wish 90% of the apartments were greenspace...

[Scott08]

15 years ago or so, long before it had really taken off, I looked at house in Shady Acres. It sat on a 1/3 acre lot, nicely renovated 2 bed/1 bath with 2 car garage. Overall it was an extremely sweet deal listed at only $50K (keep in mind that nothing in the neighborhood was going for over $100K at the time.) Trouble was, there was a sleazy 20 unit or so apartment building next door. There was trash in the back yard that the apartment residents had thrown over, and the noise level was pretty high coming from there. A friend advised me to buy the house, saying that the area was ripe for redevelopment (he was right there) and that in only a short time the apartments would be history. Long story short,the apartments are still there. New townhouses abound all around there, but the land price has still not risen to a level where it makes sense for the slumlord to sell out or redevelop. With things slowed down again, I suspect the apartments will still last another decade or more.

[sevfiv]

While I am not one to run off scared, I am in a situation where there's a place I'd like to put an offer on but it sits around the block from a few crummy sets of apartments. According to the crime statistics, those places are pretty active (more of the petty crimes) and the stuff doesn't seem to bleed over too much, but just enough to be...a major turn off.

For example, the apartments (from January to mid May of this year) have had 8 narcotic drug law calls, 9 robberies/burglaries, and 1 aggravated assault. The properties adjacent to the apartments have had 1 narcotic drug law, 2 burglaries, 1 auto theft, and 1 aggravated assault. A little bit farther away, where I was looking, there were no reported crimes.

[Fringe]

The conditions that produced the Gulfton slums is a story 35 years in the making, and includes the entire history of Houston's boom to bust to boom cycle of the latter 20th century.  To dismiss it as the City "catering to these types", is to ignore the last 35 years of Houston's economy.  While a comment like this would surely provoke a nod of agreement from those who express disdain for Houston city government on any issue, it also shows a shallow or even non-existent knowledge of how the area became what it is, and more importantly, what caused it.

I was referring to Houston as a whole not just Gulfton area. Sorry if I didn't make that more clear. It’s not just Gulfton apartments. A place I used to live, later called “sin alley” was just as bad. There’s places by Greenspoint also equally rough. Everywhere you look in Houston, apartment projects are bringing down the whole area yet nothing is ever done.  

[TheNiche]

I was referring to Houston as a whole not just Gulfton area. Sorry if I didn't make that more clear. It’s not just Gulfton apartments. A place I used to live, later called “sin alley” was just as bad. There’s places by Greenspoint also equally rough. Everywhere you look in Houston, apartment projects are bringing down the whole area yet nothing is ever done.  

Most of those places also came out of the same broad set of conditions and happenstances that gave us Gulfton, so I think that Red's point still has merit.

So what do you propose be done, who do you propose pays for it, and where do you propose that the existing undesirable population live (if not in the existing crappy apartments)?

[WAZ]

Most of those places also came out of the same broad set of conditions and happenstances that gave us Gulfton, so I think that Red's point still has merit.

So what do you propose be done, who do you propose pays for it, and where do you propose that the existing undesirable population live (if not in the existing crappy apartments)?

I've written at length about what I think the City government should do to fix slummy apartment complexes. I won't go into that here. I just want to point out a few things I've observed about low-cost housing, apartments, and slums.

First, not all apartments are low-cost. Not all low-cost housing is slums. My observations are that true slums account for only a small portion of Houston's low-cost housing stock. (Niche, please correct me if your numbers contradict).

Second, you have to differentiate between slums and good low-cost housing. This should go without saying but in the apartment debate it doesn't. Good low-cost housing might need a coat of paint, but there are no broken windows or fences, the roof is in good repair, the power is reliable, the plumbing works, and the buildings are structurally sound and up to code. Crime rates are no higher than the community at large, and neighbors can feel safe walking in and by the property. Slums by contrast often have broken windows, broken fences, leaky roofs, intermittent power, structural and code problems. Not every slum has all of these problems, but usually they have two or more, and often the crime rates at slums are astronomical.

Third, a lot of it has to do with the owners. Ownership makes a huge difference in apartments. Upstanding landlords keep up maintenance, use tax credits, screen out bad tenants, and look to make steady, long-term returns on their investments. Good landlords are professionals who are easy to find and attentive to neighbors' concerns. Slum lords take as much money as they can out of their properties, defer maintenance, keep units occupied by renting to anyone who'll pay, sometimes skip out on taxes, and look for big, short term financial gains no matter what the outcome. Slum lords are fly-by-night operators who are often hard to find, because they don't want to be found.

As I've said before, there are a lot of things I wish the City would do about slum apartments. When I say that I'm talking about real slums, and real slum lords - as I hope I defined here. We can't knock down all the apartments in Houston, and there will always be low-cost housing in Houston. But we can and we should demand that all of our city's slums be fixed or demolished.

[WAZ]

There's probably someone on HAIF (you know who you are) who would be a better expert opinion on why slummy apartments in this submarket aren't being targeted by developers for teardown. In addition to the reasons that I'm about to explain, there's usually a back story regarding the seller's way of thinking that I'm not privy to (since I'm usually coming from the buyer's side). I'm willing to bet that sellers were thinking something along the lines of that "cap rates on Class C and D properties got very low, so they tried to cash out, but got greedy expecting for there to be a redevelopment trend and most couldn't get a fish that would bite at such high prices for such a crappy area; others were probably too late to the party."

Here's the redeveloper's/buyer's perspective on why the Gulfton submarket sucks cellulite-ridden stretch-marked ass:

Once you're west of the Bellaire city limits, there are so many crappy apartment complexes so close together that there's not a single place where a developer could knock down and re-build and in so doing change the character of the area enough to entice young professionals to live there at rents such as would be suitable to justify the construction. This differs from inner loop neighborhoods because they were built out mostly as subdivisions with apartment complexes scattered throughout. If there's a crappy apartment complex that has been a blight upon a neighborhood for a long time, you can knock it down and without even building anything immediately have raised the profile of the neighborhood and increased everyone's land values. Don't get me wrong, this is not by itself a viable business model; whatever land value increase is achievable through demolition of a slum cannot entirely make up for the loss of the value of the improvements on the property or the cost of demolition. But it does illustrate how there are synergies from the act of demolishing crap in a a neighborhood and making that neighborhood appealing to yuppies in the near future; this could not be achieved if more crappy apartments were just right next door.

Also, whereas the inner loop apartment complexes that have gotten knocked down are typically not especially dense, the complexes in the Gulfton submarket have many more units per acre. Because they're so much more compact and intensively developed, there's a higher opportunity cost to knocking it all down. To replace something so dense as these apartments with something so much less dense as townhomes wouldn't have been possible.

But all these comments apply best to the area just on the western fringe of Bellaire. Once you get up along Renwick, you're so far into the jungle that it's just absurd to think that development on vacant land, much less already built-out land would be viable. Nobody with the means to live in new-construction residences wants to be surrounded by little El Salvador.

At the same time, if you ignore the apartments for a minute, and look at the single family houses, you'll see a lot of activity just past Bellaire. Meyerland, to the south, is almost as rich as Bellaire, and the money's spreading west to my own neighborhood and south to Westbury. The movement has lessened somewhat with the bad economy, but it will start again when things pick up. People with money -WANT- to live close to downtown and uptown - and they're looking for places that are still affordable where they can do that.

[TheNiche]

I've written at length about what I think the City government should do to fix slummy apartment complexes. I won't go into that here.

I wasn't responding to you, so that isn't necessary anyway.

First, not all apartments are low-cost. Not all low-cost housing is slums. My observations are that true slums account for only a small portion of Houston's low-cost housing stock. (Niche, please correct me if your numbers contradict).

I concur that not all apartments are low-cost. However, the vast majority of them cost less on a per square foot basis than single-family housing of comparable location and age. Clearly there are exceptions, however those most frequently occur in areas such as that are beyond the scope of this conversation to begin with (like Downtown or Midtown).

Second, you have to differentiate between slums and good low-cost housing. This should go without saying but in the apartment debate it doesn't. Good low-cost housing might need a coat of paint, but there are no broken windows or fences, the roof is in good repair, the power is reliable, the plumbing works, and the buildings are structurally sound and up to code. Crime rates are no higher than the community at large, and neighbors can feel safe walking in and by the property. Slums by contrast often have broken windows, broken fences, leaky roofs, intermittent power, structural and code problems. Not every slum has all of these problems, but usually they have two or more, and often the crime rates at slums are astronomical.

There is a correlation between physical and sociological problems because physically deficient apartments cannot command high rental rates, attracting a tenant base that reflects persons willing to live in crappy apartments such as is disproportionately likely to tear the place up and commit crime. But not for subsidized housing, I would venture to say that indeed low-cost housing must in fact reflect that that housing is in some way inferior to higher-cost housing, whether that is because of a physical deficiency, a sociological deficiency, or just because it happens to be poorly-located. Furthermore, to the extent that problems are related to poor management, then that is a maladaptive strategy within the context of capitalism, and by one means or another those problems are likely to be resolved.

Throwing subsidized housing into the mix, as is the case in real life, your statement is accurate. The truth of that statement fails to justify the existence of subsidized housing programs, however, IMO. And it certainly fails to consider that the subsidy is exhausted each and every fiscal year, incapable of even coming close to satiating the demand for it on the part of landlords.

Third, a lot of it has to do with the owners. Ownership makes a huge difference in apartments. Upstanding landlords keep up maintenance, use tax credits, screen out bad tenants, and look to make steady, long-term returns on their investments. Good landlords are professionals who are easy to find and attentive to neighbors' concerns. Slum lords take as much money as they can out of their properties, defer maintenance, keep units occupied by renting to anyone who'll pay, sometimes skip out on taxes, and look for big, short term financial gains no matter what the outcome. Slum lords are fly-by-night operators who are often hard to find, because they don't want to be found.

See the above point about the nature of capitalism. Owners that can't compete effectively cease being owners. The nature of competition, however, is such that there is an equilibrium level of maintenance that ought to be performed...maybe it isn't necessary to power wash the sidewalks every six months or to attempt to scrape every piece of chewing gum off the pavement. Maybe the surrounding three apartment complexes, which all look the same as the subject property, are willing to lease units month to month without running background checks...and maybe the subject property is in an area with basically no hope for gentrification...is it preferable to endure high vacancy rates perpetually to achieve a goal whose impact is undermined because the complexes next door leased to the prospects that you rejected, and those former prospects are continuing to ruin the neighborhood with or without your expressed written consent to live in it? And seeing as how you weren't even aware of a Tax Credit program for the renovation of existing properties, how do you know that any given landlord hasn't applied for it and been rejected, seeing as how there's only so much money to go around in any given fiscal year? More likely, the landlord is aware of it but doesn't bother with the (expensive) paperwork because they know that the odds of getting a subsidy are too low.

Why is it that good landlords can only possibly be identified by the owners of single-family homes nearby? And what make you all the arbiters of all that is good and just in the world?

Being a residential landlord is the most thankless job I've ever witnessed. Thankfully I've never had to have been on the property management side of the business.

As I've said before, there are a lot of things I wish the City would do about slum apartments. When I say that I'm talking about real slums, and real slum lords - as I hope I defined here. We can't knock down all the apartments in Houston, and there will always be low-cost housing in Houston. But we can and we should demand that all of our city's slums be fixed or demolished.

Oh, of course! If only things reeked less of desperation, then people would be less desperate and commit less crime. It has nothing at all to do with upbringing, ethnicity, education, job opportunities, individuals' intelligence levels, or mental health. It's because the management company forgot to rotate out the perrenials going into the Fall season.

At the same time, if you ignore the apartments for a minute, and look at the single family houses, you'll see a lot of activity just past Bellaire. Meyerland, to the south, is almost as rich as Bellaire, and the money's spreading west to my own neighborhood and south to Westbury. The movement has lessened somewhat with the bad economy, but it will start again when things pick up. People with money -WANT- to live close to downtown and uptown - and they're looking for places that are still affordable where they can do that.

Say that the owner of a large apartment complex on Chimney Rock decided to demolish and redevelop their apartment complex as single-family lots. Never mind for the moment that lots aren't selling anymore. You want to own a brand new $700,000 home. Why would you want to be surrounded by Little El Salvador when there are so many better options? Is Gulfton even zoned to Bellaire schools?

[VicMan]

Is Gulfton even zoned to Bellaire schools?

Gulfton is zoned to Lee High School, Long Middle School, and several elementary schools.

[TheNiche]

Gulfton is zoned to Lee High School, Long Middle School, and several elementary schools.

There you have it. The case for residential redevelopment within Gulfton based upon the Bellaire/West U paradigm has been snuffed from existence.

[WAZ]

I concur that not all apartments are low-cost. However, the vast majority of them cost less on a per square foot basis than single-family housing of comparable location and age. Clearly there are exceptions, however those most frequently occur in areas such as that are beyond the scope of this conversation to begin with (like Downtown or Midtown).

True. But that really doesn't have anything to do with what I'm saying.

There is a correlation between physical and sociological problems because physically deficient apartments cannot command high rental rates, attracting a tenant base that reflects persons willing to live in crappy apartments such as is disproportionately likely to tear the place up and commit crime. But not for subsidized housing, I would venture to say that indeed low-cost housing must in fact reflect that that housing is in some way inferior to higher-cost housing, whether that is because of a physical deficiency, a sociological deficiency, or just because it happens to be poorly-located. Furthermore, to the extent that problems are related to poor management, then that is a maladaptive strategy within the context of capitalism, and by one means or another those problems are likely to be resolved.

Throwing subsidized housing into the mix, as is the case in real life, your statement is accurate. The truth of that statement fails to justify the existence of subsidized housing programs, however, IMO. And it certainly fails to consider that the subsidy is exhausted each and every fiscal year, incapable of even coming close to satiating the demand for it on the part of landlords.

My point is that there's low-cost housing - what you might call 'crappy apartments' - and then there are SLUMS. If you got out of your developers' office and went around to look at some of Houston's worst apartments - you'd see what I mean. These aren't places that are just poorly located, or lack a pool, or have bad parking. These are places with mold problems, structural problems, raw sewage flowing above ground.... These are places where a police officer can get shot and nobody helps because they are afraid of getting shot themselves.

See the above point about the nature of capitalism. Owners that can't compete effectively cease being owners. The nature of competition, however, is such that there is an equilibrium level of maintenance that ought to be performed...maybe it isn't necessary to power wash the sidewalks every six months or to attempt to scrape every piece of chewing gum off the pavement. Maybe the surrounding three apartment complexes, which all look the same as the subject property, are willing to lease units month to month without running background checks...and maybe the subject property is in an area with basically no hope for gentrification...is it preferable to endure high vacancy rates perpetually to achieve a goal whose impact is undermined because the complexes next door leased to the prospects that you rejected, and those former prospects are continuing to ruin the neighborhood with or without your expressed written consent to live in it? And seeing as how you weren't even aware of a Tax Credit program for the renovation of existing properties, how do you know that any given landlord hasn't applied for it and been rejected, seeing as how there's only so much money to go around in any given fiscal year? More likely, the landlord is aware of it but doesn't bother with the (expensive) paperwork because they know that the odds of getting a subsidy are too low.

Often slums sit next door to low-cost apartments that are perfectly fine. As is the case in my neighborhood. By your logic this should never happen. If one apartment is a slum, the neighbor must automatically be a slum. Right?

Why is it that good landlords can only possibly be identified by the owners of single-family homes nearby? And what make you all the arbiters of all that is good and just in the world?

We have to live here, like tenants. And we own, like landlords. That's what makes neighboring homeowners concerned.

We spend a longer period of time here than the tenants or the landlords. We can witness the changes that happen, over time, after an apartment complex is bought or sold. What's more - we can't be evicted us for speaking up, the way they can evict tenants who speak up about problems.

Being a residential landlord is the most thankless job I've ever witnessed. Thankfully I've never had to have been on the property management side of the business.

Being a GOOD residential landlord is the most thankless job. But not all residential landlords give a damn. The ones who care, generally have decent properties. It's the ones that don't care that we have to worry about.

Oh, of course! If only things reeked less of desperation, then people would be less desperate and commit less crime. It has nothing at all to do with upbringing, ethnicity, education, job opportunities, individuals' intelligence levels, or mental health. It's because the management company forgot to rotate out the perrenials going into the Fall season.

You're painting with a very broad brush. Even in the worst apartment complexes, you'll find the majority of people really care about themselves and their properties. It's a handfull of tenants, who are there because the landlord let them in - who sit outside drinking all day long and intimidating passersby. Most tenants do their best to keep apartments clean. Often it's the common areas - that SHOULD be taken care of by the landlord and management, that have gone to hell. I know because unlike you, I live next door to one of these places.

Say that the owner of a large apartment complex on Chimney Rock decided to demolish and redevelop their apartment complex as single-family lots. Never mind for the moment that lots aren't selling anymore. You want to own a brand new $700,000 home. Why would you want to be surrounded by Little El Salvador when there are so many better options? Is Gulfton even zoned to Bellaire schools?

I know you hate the thought, but there ARE bad landlords out there. And bad landlords own slum properties. They NEED to be dealt with. We NEED to fix up those slums. And it doesn't have to be $700,000 homes. It could be new, low-cost apartments built by you and your friends. It could be a new elementary school and park. It could be retail. Anything is better than a slum apartment complex.

[Random]

While I am not one to run off scared, I am in a situation where there's a place I'd like to put an offer on but it sits around the block from a few crummy sets of apartments. According to the crime statistics, those places are pretty active (more of the petty crimes) and the stuff doesn't seem to bleed over too much, but just enough to be...a major turn off.

For example, the apartments (from January to mid May of this year) have had 8 narcotic drug law calls, 9 robberies/burglaries, and 1 aggravated assault. The properties adjacent to the apartments have had 1 narcotic drug law, 2 burglaries, 1 auto theft, and 1 aggravated assault. A little bit farther away, where I was looking, there were no reported crimes.

I live near Sandpiper/Fondren and El Rod Elementary in Maplewood - not far from a whole bunch of slummy apartments. I've been here two years and to be honest, if I never drove down Bob White, I wouldn't even know those apartments were there. Houston's funny that way.

[Fringe]

So what do you propose be done, who do you propose pays for it, and where do you propose that the existing undesirable population live (if not in the existing crappy apartments)?

Why to the Woodlands, of course.