Hardy Yards Developments

[KinkaidAlum]

Very similar to the affordable housing that replaced the public housing along Allen Parkway. It also discourages schemers from buying and flipping.

[Kinglyam]

14 hours ago, KinkaidAlum said:

Very similar to the affordable housing that replaced the public housing along Allen Parkway. It also discourages schemers from buying and flipping.

What affordable housing is that? The only thing I'm aware of is the gang-infested crime hub at Allen Parkway Villages, but I thought that is all public housing.

[kbates2]

If they were sprinkling this in various neighborhoods it wouldn't have such a high likelihood of turning into a slum.

[phillip_white]

By apologies for not believing that a non-profit could come up with something so idiotic. Capping the market valuation is essentially providing a crutch without treating the underlying poverty issues. From some light googling, I was able to find this:

https://www.houstonclt.org/faq

The first FAQ states that this would be a ground lease, not a purchase.

Quote

The CLT homeowner can sell their home no more than the home's "Resale Formula Price", which is set out in the Ground Lease and agreed upon before the purchase. The Resale Formula Price equals the home's initial sales price plus a fixed increase of 1.25% of the initial price per year. The Resale Formula Price is designed to allow the homeowner to build some equity in the home through appreciation, while ensuring the home is affordable to future limited-income buyers at resale.

As @Kinglyammentioned, owning the home is essentially a piggy bank with a negative interest rate.

[wilcal]

20 hours ago, Kinglyam said:

I spoke to some neighbors yesterday who attended the first meeting. They reported the first round of comments were uniformly negative.

Supposedly the plan is to sell the homes below $90,000, then artificially cap the property value increases on these homes at 1.5% per annum (less than the Fed's target inflation rate), which I expect would have the effect of depressing neighborhood property value growth, too. I'm not an economist, but it seems to me that having an artificial cap below the annual inflation rate is NOT going to help lower income homeowners build capital?

To be extra clear, the "homeowners" are only buying the house. The idea of using a Community Land Trust model is that the trust will always own the land and the homeowner will typically be purchasing a 99 year lease. The land will still be owned by a non-profit, so I would imagine the homeowners would only pay property tax based on the value of the improvement. 

I think that the idea of a CLT is as more about providing an affordable housing option that equity can be built with and not about gaining equity from property value growth. 

17 hours ago, Kinglyam said:

What my neighbor heard was that they couldn't SELL the house for more than 1.5% per year they lived in the house. It had nothing to do with the tax valuation. When asked about it, the city representative said it was intended to keep the houses available for low income people, meaning they will never sell at market value. Perhaps my neighbor misunderstood, but it doesn't sound like it based on that response.

Future purchasers will also have to meet certain income criteria as well (likely 80% of AMI).  The Houston CLT site has these requirements listed:

• Gross AMI < 80% ($63k for a family of four)
• US Citizen/Permanent Resident
• Take an 8 hour homebuyer class
• Be able to obtain a 30 year mortgage
• Meet their DTI requirement
• Have $350 out of pocket for closing costs
• Have  >$1,000 in personal funds after closing

Future buyers will have to meet those same requirements if they buy one of the units maintained by the CLT. Market rate units will of course be market rate. 

31 minutes ago, kbates2 said:

If they were sprinkling this in various neighborhoods it wouldn't have such a high likelihood of turning into a slum.

They actually do have a program where you can approach the Houston CLT to do a single house purchase, but remember that at least a portion of these homes will be sold (land and house) at full market rate to create a mixed-income community. The people that qualify to buy a home via the CLT model actually stand to gain (and lose) financially based on upkeep.  

[wilcal]

5 minutes ago, phillip_white said:

By apologies for not believing that a non-profit could come up with something so idiotic. Capping the market valuation is essentially providing a crutch without treating the underlying poverty issues. From some light googling, I was able to find this:

https://www.houstonclt.org/faq

The first FAQ states that this would be a ground lease, not a purchase.

As @Kinglyammentioned, owning the home is essentially a piggy bank with a negative interest rate.

What is the return on paying rent? That is the alternative here. 

And the mortgage on $100k with property taxes on the improvement is going to be what $800ish? And they'll retain $150-$200/month in equity. Where can they get a quality house for that price while also generating some equity albeit it will track behind inflation value. 

[phillip_white]

9 minutes ago, wilcal said:

What is the return on paying rent? That is the alternative here. 

And the mortgage on $100k with property taxes on the improvement is going to be what $800ish? And they'll retain $150-$200/month in equity. Where can they get a quality house for that price while also generating some equity albeit it will track behind inflation value. 

Yes, that was my point. Piggy bank with negative interest rate.

But keep in mind that someone along the line will be responsible for maintenance. A low income earner with no savings other than home equity will be a tight spot trying to make an unexpected repair. Again, if this were sprinkled throughout Houston it might work, but amassing large subsidized rent-locked neighborhoods is not a good idea.

[wilcal]

6 minutes ago, phillip_white said:

Yes, that was my point. Piggy bank with negative interest rate.

Yes, versus a completely empty piggy bank. Actually, probably negative since there is 0 chance that they can find comparable housing at this price point. 

Quote

But keep in mind that someone along the line will be responsible for maintenance. A low income earner with no savings other than home equity will be a tight spot trying to make an unexpected repair. Again, if this were sprinkled throughout Houston it might work, but amassing large subsidized rent-locked neighborhoods is not a good idea.

Have CLTs been perfect? No, of course not. However, there are hundreds in the US and they have been nearly universally successful. Houston would really have to come up with something unique to ourselves if this turned in to a slum area. 

[Kinglyam]

36 minutes ago, wilcal said:

They actually do have a program where you can approach the Houston CLT to do a single house purchase, but remember that at least a portion of these homes will be sold (land and house) at full market rate to create a mixed-income community. The people that qualify to buy a home via the CLT model actually stand to gain (and lose) financially based on upkeep.  

You really think anyone is going to pay full market rate to live in a neighborhood where the surrounding properties have artificially limited value increases? Realtors and assessors aren't going to ignore that when they assess the market value of the house, are they? Or will there be two different valuations, one for people making <80% AMI, and another one for everyone above that? My guess is that everyone who can afford market value will look elsewhere, and this will be entirely low-income.

Frankly, I think this will be sellable to the community if and only if they build it as condos on top of one or two layers of retail. That would, I think, be very progressive and maybe even visionary (which is why it won't happen). If they build more pure residential housing, particularly with only one little kids park in the area, then nobody will mix. If, however, they have the retail that everyone wants to go to, all the different social classes will have places to mix. Which is supposed to be one of the main points behind mixed income developments, isn't it? To prevent the social stratification that comes with gentrification?

[wilcal]

2 hours ago, Kinglyam said:

You really think anyone is going to pay full market rate to live in a neighborhood where the surrounding properties have artificially limited value increases?

They aren't competing with those units. The buyers are completely different. 

Quote

Realtors and assessors aren't going to ignore that when they assess the market value of the house, are they? Or will there be two different valuations, one for people making <80% AMI, and another one for everyone above that? My guess is that everyone who can afford market value will look elsewhere, and this will be entirely low-income.

That is exactly it. Anyone buying market rate will just see the listing on Zillow or whatever else. They will also be able to sell for full market rate whenever they sell because they own the land and the house. CLT buyers will just own the house, and the value for what they sell it for will be capped. 

Quote

Frankly, I think this will be sellable to the community if and only if they build it as condos on top of one or two layers of retail. That would, I think, be very progressive and maybe even visionary (which is why it won't happen). If they build more pure residential housing, particularly with only one little kids park in the area, then nobody will mix. If, however, they have the retail that everyone wants to go to, all the different social classes will have places to mix. Which is supposed to be one of the main points behind mixed income developments, isn't it? To prevent the social stratification that comes with gentrification?

You should definitely tell them that, but yeah, it is not going to happen. There was a project in Midtown where something similar to what you are describing was going to happen (but all rental and not purchase) but it got cancelled. 

Also remember that these are not isolated areas but established neighborhoods. There's already some bars/restaurants/etc. And also, remember that we are not talking about families that are destitute poor or homeless that are just off the street, we are talking about a family of four making up to $50k/year. 

I'm actually going to email one of my professors that has studied CLTs extensively and find out if he can point to any specific mixed-sale CLTs that have been successful or failures. The majority of them don't integrate market-based pricing to my knowledge. 

 

[samagon]

22 hours ago, Kinglyam said:

What my neighbor heard was that they couldn't SELL the house for more than 1.5% per year they lived in the house. It had nothing to do with the tax valuation. When asked about it, the city representative said it was intended to keep the houses available for low income people, meaning they will never sell at market value. Perhaps my neighbor misunderstood, but it doesn't sound like it based on that response.

so while it makes the home available to a new buyer, the person selling will be making less money (after inflation) than the bought it for. keep the poor poor I guess.

[wilcal]

4 minutes ago, samagon said:

so while it makes the home available to a new buyer, the person selling will be making less money (after inflation) than the bought it for. keep the poor poor I guess.

What about the interest saved by not purchasing the land? You have to look at the whole picture.

[samagon]

Just now, wilcal said:

What about the interest saved by not purchasing the land? You have to look at the whole picture.

there's certainly plusses and minuses on both sides.

alternatively, they can pay rent, which is always going to go up, and when they are ready to move there is nothing they get out of it other than maybe their security deposit back.

as someone else pointed out, those random expenses of homeownership (AC repair in August) can catch you off guard, and if you're month to month anyway, it might be easier to just call a landlord, rather than having to find the cash to afford a service call.

[wilcal]

Ok, so quick update. Basically this is the Houston Land Bank which is not a CLT. 

Land Banks typically are used to convert distressed property (typically property taxes) and convert them into something usable, typically new housing.

Houston Land Bank used private developers to build the housing and then it is sold, although there is an option for some properties to be sold using a land trust option.

More info on their site

[cougarpad]

On 6/9/2021 at 11:48 AM, Kinglyam said:

I spoke to some neighbors yesterday who attended the first meeting. They reported the first round of comments were uniformly negative.

Supposedly the plan is to sell the homes below $90,000, then artificially cap the property value increases on these homes at 1.5% per annum (less than the Fed's target inflation rate), which I expect would have the effect of depressing neighborhood property value growth, too. I'm not an economist, but it seems to me that having an artificial cap below the annual inflation rate is NOT going to help lower income homeowners build capital?

What baffles me is that HEB says that they will no longer be building HEB Central Markets. There are multiple of these stores in San Antonio and Austin area yet Houston has one. HEB just spent a lot of money expanding the one in Houston, yet they now say the stores are not profitable. Then why expand the one in Houston? Plus go into that store and see how busy it is and HEB is saying it is not profitable? They should build an HEB Central Market in the Hardy Yards. Two other locations for HEB Central Markets are the Clear Lake and Woodlands areas. An HEB in Hardy Yards or the Midway development would be nice but be even better if it was a Central Market.

[Houston19514]

2 hours ago, cougarpad said:

What baffles me is that HEB says that they will no longer be building HEB Central Markets. There are multiple of these stores in San Antonio and Austin area yet Houston has one. HEB just spent a lot of money expanding the one in Houston, yet they now say the stores are not profitable. Then why expand the one in Houston? Plus go into that store and see how busy it is and HEB is saying it is not profitable? They should build an HEB Central Market in the Hardy Yards. Two other locations for HEB Central Markets are the Clear Lake and Woodlands areas. An HEB in Hardy Yards or the Midway development would be nice but be even better if it was a Central Market.

Where did they say Central Markets are not profitable or that the Houston Central Market is not profitable?

[Kinglyam]

4 hours ago, cougarpad said:

What baffles me is that HEB says that they will no longer be building HEB Central Markets. There are multiple of these stores in San Antonio and Austin area yet Houston has one. HEB just spent a lot of money expanding the one in Houston, yet they now say the stores are not profitable. Then why expand the one in Houston? Plus go into that store and see how busy it is and HEB is saying it is not profitable? They should build an HEB Central Market in the Hardy Yards. Two other locations for HEB Central Markets are the Clear Lake and Woodlands areas. An HEB in Hardy Yards or the Midway development would be nice but be even better if it was a Central Market.

I understand that they basically considered the new "upgraded" HEB experience to be sufficient, while the CM experience I guess was too expensive to develop and maintain. But since they had already developed the Houston one, adding more to it wasn't as big a deal. They just wouldn't want to spend the money to buy this land and develop an all new CM, that wouldn't be as profitable as a regular HEB.

Besides, as someone earlier said, this area has poor access to the freeways compared to other locations (though not sure that is the case compared to other EMPTY large lots), which makes CM less desirable.

[Houston19514]

Yes, in the Houston market, they have developed the hybrid HEB Market stores, rather than expanding the Central Market concept.  (Not all HEB's are "Market"s)

[iah77]

15 hours ago, Kinglyam said:

I understand that they basically considered the new "upgraded" HEB experience to be sufficient, while the CM experience I guess was too expensive to develop and maintain. But since they had already developed the Houston one, adding more to it wasn't as big a deal. They just wouldn't want to spend the money to buy this land and develop an all new CM, that wouldn't be as profitable as a regular HEB.

Besides, as someone earlier said, this area has poor access to the freeways compared to other locations (though not sure that is the case compared to other EMPTY large lots), which makes CM less desirable.

Which I don't understand because in Dallas they are opening 4 Central Markets and they are not hybrids including one near downtown in Victory Park. 

[Texasota]

I can't be the only person who prefers the hybrid style HEBs to Central Market, can I? I can't think of any reason to go to Central Market rather than the HEBs on Washington or West Alabama. 

[JBTX]

8 minutes ago, Texasota said:

I can't be the only person who prefers the hybrid style HEBs to Central Market, can I? I can't think of any reason to go to Central Market rather than the HEBs on Washington or West Alabama. 

The HEBs you list are my go-to ones, but as far as Central Market being better? Depends on what you want, personally, I like:

-More bulk spices (which become comically cheap in normal commercial quantities)

-More bulk tea/coffee

-Based deli (and lets not forget the meat and lox "ends" that make for the best/cheapest lunch you can get in town)

For me, Central Market fills this wild void between "special occasion" shopping (like the butcher counter) and "staples shopping" (deli, spices, etc.)

[Texasota]

I guess for me the balance is with Whole Foods and Phoenicia (spices!) not to mention 99 Ranch, H Mart, etc.

I also just dont like the layout of Central Market, so I generally find the experience less pleasant. 

[samagon]

central market has some very specialized stuff, if you are looking for it.

but, if you aren't interested in that, then any old HEB will probably work.

for instance, there's this stuff called Maggi Seasoning. I can get it in HEB no problem, I can also get it at CM, no problem. 

so what's the problem, you ask? well, one (the one you can get in HEB) has a yellow top. the other (CM) has a red top, and is labeled "Wurze".

the yellow top is a completely different flavor than the red top, yellow top is good, but red top is that much better. basically, they are made for different markets. the red one is imported from Germany.

or if you want a Polish version, you can go to Phoenecia, which is a red cap too.

anyway, there's stuff there that you can't get elsewhere.

on a side, if you haven't tried Maggi, or Wurze as a topper for your food, give it a shot. it mixes well on spaghetti, and in pretty much any soup. https://www.cooksinfo.com/maggi

Edited June 11, 2021 by samagon

[Texasota]

I get my Maggi's at H Mart, as God intended.

[hindesky]

The east lot of the Prose is going vertical.

[southerncrj]

A little extra info I found about the projects by the Houston Landbank for their Hardy Yards/Near Northside lots:

"The City of Houston and Houston Land Bank have recently acquired two new sites, which will be the location of development of communities of single-family homes. The “north site,” located at on three blocks at 3201 Hardy and 1406 Hays roads, currently is the site of Yellow Cab Company. The “south” site sits adjacent to the Burnett Transit Center. In total, these two sites represent 16.8 acres of land that can be transformed to enrich the Near Northside, through the creation of homes and community spaces that residents want to see.

These will be mixed-income developments, where over half of the homes will be dedicated to providing homes that are affordable to residents making at or less than 80% of Houston’s Area Median Income. In order to make best use of the space, we are looking to create higher density communities – from townhomes to duplexes to condos. But before development begins, it is crucial to get the input of community members, so we can make these homes fit into the vision that residents have for the Near Northside."

"Developments are mixed-income. Over half (at least 51%) of the new homes will be affordable to households earning 80% of the Area Median Income or less. For a family of three, for example, this would mean earning $57,050 or less as of 2021."


Source: https://houstontx.gov/housing/homes/near-northside.html?fbclid=IwAR26g-DTPxbjhqOPpiiZFfPhFWWM778NezDdJtSF4PTUSPUq0dkqdbSn9kA

There will be a meeting to discuss these projects today at 17:30. https://bit.ly/Near-Northside-Homes-Community-Engagement-Meeting

 

Last, it appears urban planning and design for these projects will be by Asakura Robinson. 

[Montrose1100]

18 minutes ago, southerncrj said:

A little extra info I found about the projects by the Houston Landbank for their Hardy Yards/Near Northside lots:

"The City of Houston and Houston Land Bank have recently acquired two new sites, which will be the location of development of communities of single-family homes. The “north site,” located at on three blocks at 3201 Hardy and 1406 Hays roads, currently is the site of Yellow Cab Company. The “south” site sits adjacent to the Burnett Transit Center. In total, these two sites represent 16.8 acres of land that can be transformed to enrich the Near Northside, through the creation of homes and community spaces that residents want to see.

These will be mixed-income developments, where over half of the homes will be dedicated to providing homes that are affordable to residents making at or less than 80% of Houston’s Area Median Income. In order to make best use of the space, we are looking to create higher density communities – from townhomes to duplexes to condos. But before development begins, it is crucial to get the input of community members, so we can make these homes fit into the vision that residents have for the Near Northside."

"Developments are mixed-income. Over half (at least 51%) of the new homes will be affordable to households earning 80% of the Area Median Income or less. For a family of three, for example, this would mean earning $57,050 or less as of 2021."


Source: https://houstontx.gov/housing/homes/near-northside.html?fbclid=IwAR26g-DTPxbjhqOPpiiZFfPhFWWM778NezDdJtSF4PTUSPUq0dkqdbSn9kA

There will be a meeting to discuss these projects today at 17:30. https://bit.ly/Near-Northside-Homes-Community-Engagement-Meeting

 

Last, it appears urban planning and design for these projects will be by Asakura Robinson. 

I'm glad they mentioned condos. It would be counter productive to put single family homes/town homes/suburban style development here next to a light rail station and bus transit center. 

[Kinglyam]

14 minutes ago, Montrose1100 said:

I'm glad they mentioned condos. It would be counter productive to put single family homes/town homes/suburban style development here next to a light rail station and bus transit center. 

That's hardly going to stop them, though. Look at what else they've put up already. This is what is easy to build and manage, I suspect.

At least the designer has experience with mixed use development.

[hindesky]

Looks like second story lumber framing going up.

[hindesky]