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Houston's Housing

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Until it was slammed by the oil and real-estate crash a decade ago, Houston hadn't much reason to consider the full range of economic perspectives. The city's growth and success was born of its marriage of politics and business. The poor don't vote. Nor do they do much business. So, despite the recent talk coming out of City Hall about diversity, it's still inherently easier to think of the poor in terms of cost rather than benefit.

"As one elected official told me," recalls Shipman, "'You have no constituency.' And he's right."

Such attitudes have led to some rabid reactions to the presence of the less fortunate. A case in point is the demolition of thousands of low-cost apartment units in Spring Branch, which, with the support of City Councilwoman Helen Huey, seems to be waging war against its large immigrant population. Similar uprisings have been staged by single-family homeowners in the Fondren Southwest area.

So it's not surprising that the city's first sorties over the land acquired in the RTC sale was at the behest of homeowners in those two areas of the city.

"The mayor's office is interested in converting this site to new home development ... if we could recover it from the RTC, hit it with deed restrictions and market it to a homebuilder," read a January 2, 1993, memo from Huey to her chief aide, Bob Thompson.

Residents of Spring Branch, the heart and soul of Huey's District A, had long been asking the city to do something about dilapidated apartment buildings in their community. The memo to Thompson concerned Springtime Estates, an abandoned 300-unit complex near the Binglewood subdivision. Huey had all but promised her constituents that the complex would be demolished. Nearby residents lobbied hard for single-family homes or a neighborhood park to be built on the site.

Informal discussions with the RTC about Springtime Estates began soon after the agency took over the complex in July 1992. A sticking point was $287,000 in back taxes the property owed to the Spring Branch Independent School District, Harris County and the city of Houston. Lanier, Huey, the homeowners and a squadron of lawyers spent considerable time and energy trying to figure out a way around the tax issue. Their dilemma is best stated in a letter from Superintendent Hal Guthrie to SBISD trustees: "[D]o we wish to get in the business of forgiving taxes? The impact is far-reaching. If the city doesn't complete their intentions, the project could be taken over by an individual(s) and rehabbed enough that occupancy would be permitted. This would produce many poor children for our district." Then again, Guthrie continued, single-family homes would pump up the tax rolls, not to mention result in "a very different student population."

Similar pressure was being applied to the city by homeowners' associations in the Fondren Southwest area. The groups met with Lanier on January 11, 1993, to discuss the Bellfort Southwest III and Bellfort Southwest IV complexes, which were on the "fast track" for purchase from the RTC.

A follow-up letter to the mayor's office outlined the homeowners' demands, which included a city-funded capital reserve for any future repairs; input into who would manage the complex (specifically not to be the city's housing authority); right of first refusal of prospective buyers; and a promise from the city that it would "remove nearby nuisances," such as a local nightclub that had the neighborhood up in arms.

At this point -- January 1993 -- negotiations with the RTC were well under way. In addition to the above three complexes, the city was also attempting to work out deals for Tara Hall Apartments, near Hobby Airport, and Winwood Club.

Also at the time, the city was in the process of choosing a real-estate consultant to help it negotiate the tangle of federal regulations and guidelines that dictated the purchase of property from the RTC.

The city was apparently in a hurry to find someone. The RTC's marketing period for the first four complexes the city wanted to buy was running out. The city's office of housing and community development issued a request for proposal on November 4, 1992; the deadline for responses was just nine days later.

One respondent was Abraham Koshy, head of A.K. Realty Inc. Koshy says his company has been in the real-estate management business in Houston for 15 years. He scurried to meet the city's deadline, but he never heard back.

"They did not even give me the courtesy of a response," he recalls. "I called them three times to find out what happened, and finally someone told me that they had canceled it. The person on the phone said they weren't going to go through with the purchases."

Koshy says he doesn't remember whether the short time he had to prepare his proposal hurt his chances. Max Uzick, the man in charge of preparing a proposal for the Duddlesten Management Group, says he doesn't remember that either.

"We had 30 to 45 days to respond, as I recall," Uzick says.
It's hard to say whether Uzick's memory is poor or if, for some reason, he had different time constraints to contend with. However, he does remember what happened when he asked the RTC for information on the affordable housing program.

"It came back in boxes," Uzick remembers with a chuckle. "I mean, stacks of paper a foot high. When we reviewed the program, we decided that, in our minds, it could be very successful. So we sent in the proposal."

Suzy Hartgrove, a spokeswoman for the office of housing and community development, says Duddlesten wasn't given any more time than any other real-estate firm to prepare and submit a proposal, though many such companies, including Duddlesten's, had previously contacted the city about the RTC's affordable housing program.

Like a lot of close friends of Bob Lanier, Wayne Duddlesten stays out of the public eye. He served with Lanier on the Texas Highway Commission and has given thousands of dollars to the mayor's political campaigns. One thing in particular about Duddlesten that some people have noticed is the prominent role he has assumed in Lanier's low-income housing strategy.

In addition to handling the city's RTC purchases, Duddlesten is currently negotiating a contract for a $50 million, federally funded redevelopment of Allen Parkway Village. The selection of Duddlesten, whose master plan team includes some Boston architects, disturbed at least one housing authority board member, who said the team's proposal was second-rate.

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