Midtown TIRZ

[trymahjong]

The last I heard Midtown would annex the Museum district-

[ew2003]

Does anyone know what the Midtown Redevelopment Authority is planning to do with all of the random lots they own?  The odd thing is none of them are actually in Midtown.  They're in East Downtown and Third Ward.  I see 457 lots on HCAD.  I'm just interested to know.  Thanks for any insight!

idtown redev.pdf

 

[Ross]

It's anti-gentrification land banking at the behest of Garnet Coleman who is bitterly opposed to redevelopment that might displace current residents of the Third Ward.

[DrLan34]

Coleman is taking an unconventional and controversial approach to keeping the Third Ward affordable for longtime residents. Quietly, the board of a tax increment financing district that he partially controls has been buying up land in the Third Ward. Not only does Coleman want to keep the land away from developers. He also wants to saddle the property with restrictive deeds and covenants that would ensure that it could be used only for rental housing in perpetuity. 

 

(March 2006)

 

http://www.governing.com/topics/politics/Land.html

[ew2003]

Wow.  That's just crazy.  And what he's doing is working.  

[UtterlyUrban]

I am very confused.

There are 32 pages of parcels now owned by the Midtown redevelopment authority?

Where did it get the money to buy these lots?

[august948]

I am very confused.

There are 32 pages of parcels now owned by the Midtown redevelopment authority?

Where did it get the money to buy these lots?

 

They use the increase in taxes from Midtown each year to fund it. 

 

 

The Midtown TIRZ has been responsible for physical and capital improvements in Midtown. In 1995, the TIRZ was created “freezing” the ad valorem taxes generated from the district for 30 years. From the baseline appraised value of $211 million, every increase in value and the taxes it generated is committed to the District for 30 years. Today, the appraised value of property in the district is over $1.6 billion. This gives the Authority the ability to issue bonds based on the current and anticipated increase in value.

http://houstonmidtown.com/about/mra/

[UtterlyUrban]

They use the increase in taxes from Midtown each year to fund it.

http://houstonmidtown.com/about/mra/

Wow!

So, property taxes are paid into the taxing authority -- a "redevelopment authority" -- and the authority is buying specific parcels of land but does not have a specific plan to "redevelop" the totality of the lots it's has purchased? That can't be correct. There must be a master plan --- some plan --- in mind for the lots that have been purchased.....

I am now even more confused!

[august948]

Wow!

So, property taxes are paid into the taxing authority -- a "redevelopment authority" -- and the authority is buying specific parcels of land but does not have a specific plan to "redevelop" the totality of the lots it's has purchased? That can't be correct. There must be a master plan --- some plan --- in mind for the lots that have been purchased.....

I am now even more confused!

 

Oh, there's a plan alright.  The plan is to deed restrict as much land as possible in the Third Ward so that it remains low-income rental housing.  Are the plots owned even in the Midtown TIRZ?

 

[Ross]

Oh, there's a plan alright.  The plan is to deed restrict as much land as possible in the Third Ward so that it remains low-income rental housing.  Are the plots owned even in the Midtown TIRZ?

 

 

No, the TIRZ, unless it's boundaries have changed, stops at 59/288. The properties are on the other side of the freeway.

 

To make things even more fun, the Midtown Management District collects an 11.81 cents per $100 valuation property tax for improvements the TIRZ doesn't pay for.

[phillip_white]

I knew that they owned land outside of Midtown but wasn't sure why.  Now that I know what's behind it I'm pretty pissed off.  I just sent an e-mail to a neighbor that's on the MRA board asking what's up.  If I don't get a sufficient answer I plan to bring this up at the next MRA community meeting.  They can't seem to afford to pay for any of their new projects but are sitting on a pile of valuable real estate that doesn't have a direct impact on the community it's supposed to be supporting.

[brian0123]

Chill out everyone. Midtown is required by state law to set aside 1/3 of funds collected for affordable housing since Midtown was allowed to be established under Section 311.005...

"In a zone designated under Section 311.005(a)(4) that is located in a county with a population of 3.3 million or more, the project plan must provide that at least one-third of the tax increment of the zone be used to provide affordable housing during the term of the zone."

.

http://www.statutes.legis.state.tx.us/Docs/TX/htm/TX.311.htm

No scandal here. Just a clause in state law that allowed Midtown to gentrify with thought given to those who may get displaced in the process. Midtown chose to do the affordable housing outside of their zone (which is allowed under the law).

[ew2003]

I mapped the properties out and added it to the original post so everyone can see exactly where this land is.  

[DrLan34]

Chill out everyone. Midtown is required by state law to set aside 1/3 of funds collected for affordable housing since Midtown was allowed to be established under Section 311.005...

"In a zone designated under Section 311.005(a)(4) that is located in a county with a population of 3.3 million or more, the project plan must provide that at least one-third of the tax increment of the zone be used to provide affordable housing during the term of the zone."

.

http://www.statutes.legis.state.tx.us/Docs/TX/htm/TX.311.htm

No scandal here. Just a clause in state law that allowed Midtown to gentrify with thought given to those who may get displaced in the process. Midtown chose to do the affordable housing outside of their zone (which is allowed under the law).

 

That sounds good.

 

I'm all for affordable housing but I don't see much of it on those lots - but I can appreciate that I don't have all the plans in front of me.  

 

Does anyone know what percentage of those lots have been developed into affordable housing?

[phillip_white]

Thanks for posting this.  DrLan34 definitely knows how to assemble an angry mob.

 

Follow-up questions to this new info:

 

Has the MRA been buying land INSTEAD of developing affordable housing?

What could their exit strategy be?  Increased land value is only advantageous to them before a sale because it's outside the TIRZ.

Would it be allowable for the MRA to sell the land to a developer who agrees to put a cap on home prices?

 

Chill out everyone. Midtown is required by state law to set aside 1/3 of funds collected for affordable housing since Midtown was allowed to be established under Section 311.005...

"In a zone designated under Section 311.005(a)(4) that is located in a county with a population of 3.3 million or more, the project plan must provide that at least one-third of the tax increment of the zone be used to provide affordable housing during the term of the zone."
.
http://www.statutes.legis.state.tx.us/Docs/TX/htm/TX.311.htm

No scandal here. Just a clause in state law that allowed Midtown to gentrify with thought given to those who may get displaced in the process. Midtown chose to do the affordable housing outside of their zone (which is allowed under the law).

 

[cspwal]

Thanks for posting this.  DrLan34 definitely knows how to assemble an angry mob.

 

Follow-up questions to this new info:

 

Has the MRA been buying land INSTEAD of developing affordable housing?

What could their exit strategy be?  Increased land value is only advantageous to them before a sale because it's outside the TIRZ.

Would it be allowable for the MRA to sell the land to a developer who agrees to put a cap on home prices?

 

I think what they are saying is that they want to sell it, but deed restricted to be affordable housing.  Why they need so many lots, and whether they actually are affordable housing right now, is what confuses me.  Also, why not build some of this affordable housing in/near midtown?

[DrLan34]

Thanks for posting this.  DrLan34 definitely knows how to assemble an angry mob.

 

Follow-up questions to this new info:

 

Has the MRA been buying land INSTEAD of developing affordable housing?

What could their exit strategy be?  Increased land value is only advantageous to them before a sale because it's outside the TIRZ.

Would it be allowable for the MRA to sell the land to a developer who agrees to put a cap on home prices?

 

haha naw, just tying to understand the details. I really like the MRA but this is some interesting news.

[brian0123]

Everyone go to the affordable housing section in their report:http://www.houstonmidtown.com/wp-content/uploads/2015/03/Midtown-Special-Report.pdf

Yes, they've built multifamily (they even have a picture of one in doc above). Yes, they have covenants around the land if sold. They probably don't do this in Midtown since land is so expensive now, they can have a greater impact setting aside land for future housing needs instead of buying a couple Midtown lots. Remember, they buy the land at lot value... They're not Gods who can just take land. Buying land in third ward lets them accomplish more with the same resources.

[cspwal]

Everyone go to the affordable housing section in their report:http://www.houstonmidtown.com/wp-content/uploads/2015/03/Midtown-Special-Report.pdf

Yes, they've built multifamily (they even have a picture of one in doc above). Yes, they have covenants around the land if sold. They probably don't do this in Midtown since land is so expensive now, they can have a greater impact setting aside land for future housing needs instead of buying a couple Midtown lots. Remember, they buy the land at lot value... They're not Gods who can just take land. Buying land in third ward lets them accomplish more with the same resources.

 

Notes from reading this:

• They have a map of "midtown" with a big star on downtown
• It does look like they have done 16 affordable housing projects.  This is very admirable
• They do mention the land bank program - "$31 million of the Affordable Housing costs"  So I guess if they were getting lots in midtown it would be even more so they would have a smaller effect
• Both multifamily and single family affordable housing
• Looks like the super block may have been originally imagined as one large park, but they do talk about it.  

Very much worth a read even if you don't understand half of it (like me)

[brian0123]

Agreed cspwal. It's confusing, but everything they do is by law. People tend to think government is crooked and that Coleman is locking up votes for himself. In reality, they have to follow Texas law and attempt to save as much land as possible for current and future affordable housing. I was glad they were doing it in third ward and not Midtown because it would effectively wipe out potential tax revenues from their growth. In other words, a big Camden development increases tax revenues (so Midtown can fancy up Bagby) vs them buying land and putting a tax exempt property there and Bagby never getting rebuilt (or just a basic street overlay).

Now, newbies to the area look around at all the nice stuff and wonder why Midtown bothers with third ward. They weren't around when Midtown was a desolate wasteland and Baldwin Park had grass over your head with prostitutes and drug dealers living at it. The TIRZ law allowed Midtown to get fixed up, while allowing for affordable housing for those displaced. This avoided what happened in Freedman's Town. Third Ward (neighbor to the district) gets rebuilt as well, which in turn helps reduce crime rates in Midtown, and Midtown grows with inc. tax revenues to fund transition of both areas. Midtown TIRZ will go away in the future by law (can't remember the official date). At that point, we'll have an awesome urban neighborhood with an awesome rebuilt neighboring district that has affordable housing in the city.

[august948]

I think what they are saying is that they want to sell it, but deed restricted to be affordable housing.  Why they need so many lots, and whether they actually are affordable housing right now, is what confuses me.  Also, why not build some of this affordable housing in/near midtown?

 

Because this is a personal/political thing for Garnet Coleman.

 

 

From his fifth-floor office, Garnet Coleman can almost see the gleaming new urban lofts lapping at the edge of Houston's Third Ward. Artists began moving into the poor, largely African-American neighborhood about a decade ago, converting historic but run-down shotgun shacks into cutting-edge art spaces. Now, in the next step of an increasingly familiar cycle, blocks of new townhouses are rising over the freeway, front yards turned toward the downtown skyline just a few miles away. Yuppies, empty nesters, childless couples--mainly white and Hispanic people with enough money to drop $250,000--are starting to move in. And Coleman, an intense, chain-smoking power broker who represents the neighborhood in the Texas legislature, isn't happy about it. "You can tell a neighborhood's turning," he says with dismay, "when you see them out at night walking their dogs."

 

Coleman is determined to stop gentrification in Houston's Third Ward before it gets out of hand. "I understand how this happens," he says. "I understand how to stop it." He's also uniquely situated to do something about it. Coleman is an influential player in Houston's local politics, owing partly to his House seat and partly to his family lineage.

 

Coleman is taking an unconventional and controversial approach to keeping the Third Ward affordable for longtime residents. Quietly, the board of a tax increment financing district that he partially controls has been buying up land in the Third Ward. Not only does Coleman want to keep the land away from developers. He also wants to saddle the property with restrictive deeds and covenants that would ensure that it could be used only for rental housing in perpetuity. "Quite frankly, this is personal," Coleman says with grim determination.

http://www.governing.com/topics/politics/Land.html

 

Props to DrLan34 for the original post of this link earlier in the thread.

[IronTiger]

First off, I'm not saying that I support Coleman, but to me this shows how artificial development is, even in Houston. It annoys me when people point to Houston as this model of free development (oddly enough, most of them seem to be pretty crummy examples—like Zone D'Erotica in Uptown, or the proposed Ashby High Rise), but to me, Coleman's anti-gentrification scheme is just as disingenuous as TIF zones that allowed areas like Midtown to come back to life. Required affordable housing aside, the whole "where does gentrification happen" thing is just politicians pushing money around.

[brian0123]

Did you guys not read the state law I posted above? Yes, Coleman hates gentrification in Third Ward. He has every right to feel like that when you have long time residents and people on fixed incomes being pushed out. He loves Midtown and the development there as well. Again, it's a win win for both neighborhoods. Everything he's doing is by the books and legal. I talked with him at a Midtown event once and he's a cool guy really excited about how far Midtown has come.

Personally, I think there are better ways to provide affordable housing... but Coleman is following the law and Midtown is complying with what is required of them.

All that said, it's not like Coleman's plan is stunting growth in Third Ward or hurting Midtown. Both places are hot. The only people I've seen really upset by it typically have crime concerns about Midtown and wonder why more can't be spent on police instead of buying land. Again, 1/3 of revenues HAVE to go to affordable housing.

[august948]

This will be interesting to follow going forward.  Up to this point I assumed that the Third Ward would gentrify like other near in neighborhoods.  I'm guessing not now.  Based on the map/picture in the op it looks like they've locked up quite a bit in a concentrated area.  Enough to really affect how things turn out.  I wonder if Coleman is going to be bent out of shape if it all goes hispanic at some point.

[terra002]

Such a shame, I would love to see that area utilized better by U of H

[phillip_white]

I agree.  I was actually considering buying a property in that area, but after learning this information will be looking more at East End.  The problem with the concentration of these properties is that even if some of the properties are developed, they can't do everything at once which will lead to a prolonged (10-20 years) revitalization vs the quick growth that Midtown, Eado, and downtown have seen.

 

This will be interesting to follow going forward.  Up to this point I assumed that the Third Ward would gentrify like other near in neighborhoods.  I'm guessing not now.  Based on the map/picture in the op it looks like they've locked up quite a bit in a concentrated area.  Enough to really affect how things turn out.  I wonder if Coleman is going to be bent out of shape if it all goes hispanic at some point.

 

[ew2003]

http://urbanedge.blogs.rice.edu/2016/05/25/third-ward-looks-to-shift-the-gentrification-conversation/#.V0W0lvkrKUl

 

 

"Adjacent to the Third Ward, the quasi-public tax increment reinvestment zone that was transforming Midtown — an area formerly divided between the Third and Fourth Wards — was required to dedicate a portion of its revenues for affordable housing. But Coleman saw that property values there were rising so quickly, affordable housing would be a difficult pitch to developers, so he convinced a related agency, the Midtown Redevelopment Authority, to use the money to buy properties in Third Ward instead. The redevelopment authority would then sell the property to developers who were required to build affordable single-family homes and rental units.

Today, the authority owns 3.5 million square feet of land in Greater Third Ward. Coleman started banking land through the authority in the neighborhood he grew up in, hoping to buy up enough to make a sizable percentage of its future housing affordable. That scheme has already yielded a crop of single-family homes and plans for apartment complexes."

[DrLan34]

http://www.houstonchronicle.com/business/real-estate/article/East-west-divide-becomes-an-issue-in-Midtown-7962001.php

East-west divide becomes an issue in Midtown

By Erin Mulvaney

June 3, 2016 Updated: June 6, 2016 10:11am

 

 

A slice of the area also earned the designation of an "arts district" and is home to a new theater venue MATCH, Ensemble Theater, popular music venues like the Continental Club and art galleries. A Whole Foods Market-anchored mixed-use development is under construction nearby.

 

"It's a perception thing," Thibodeaux said. "They don't have a Bagby Street on the east side. The market has been focused on this side. The new apartments. A Whole Foods store. It's a market-driven thing."

[Gator Purify]

As long as two rappers representing the east and west sides of Midtown don't get shot, everything will be fine in the end.

[bobruss]

Maybe instead of taking a good portion of the funds from the TIrz to buy homes and property in the third ward, they should use those funds to upgrade lighting, streets and landscaping and promote the east side of Midtown more.