HUD sent a letter to Houston Mayor Sylvester Turner stating that it found the City in noncompliance with Title VI of the “Civil Rights Act of 1964.” HUD asserted that the City’s refusal to issue a Resolution of No Objection (a Resolution) for a mixed-income, 233-unit apartment building to be racially motivated. HUD concluded that the City’s procedure for approving proposed projects for financing through the Low Income Housing Tax Credit (LIHTC) program to be influenced by racially motivated opposition to affordable housing, perpetuating segregation.
Title VI states that “no person in the United States, shall on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance.” Houston received more than $62 million in HUD funds in 2016.
The Houston Housing Authority (HHA) proposed developing the Fountain View apartments in a predominantly white, high-opportunity area. HHA had worked with City staff on the project for a number of years. Financing for the proposed project would include $26 million in Community Development Block Grant Disaster Recovery funds, $14 million in LIHTC, and $12 million in tax-exempt bonds. Of the 233 units, 20% were to be market-rate, 70% were to be occupied by households with incomes at or below 60% of the area median income (AMI), and 10% were to be occupied by extremely low income households, those with income at or below 30% of AMI.
HUD’s letter noted that after several months of delay, the mayor refused to place a Resolution for Fountain View on the City Council agenda, claiming the cost of the project was too high. But no City funds were involved, and LIHTC projects with similar costs have been approved. In addition, LIHTC projects seeking a Resolution are not typically vetted for cost by the City, and the mayor did not recall the City reviewing any other Resolutions during his tenure, although ten Resolutions had been successfully issued over that period.
HUD found that Houston does not consider LIHTC projects using objective metrics or systematic assessments; instead the City defers almost entirely to neighborhood opinion. HUD’s letter cites a significant number of written and oral comments about the project using coded language recognized by the courts as expressing racial animus.
Hundreds of neighborhood residents attended a public meeting hosted by HHA objecting to Fountain View because of unit costs and perceived increases in traffic, crime, and school overcrowding, as well as a decrease in property values. HUD asserts that none of the concerns could be substantiated. The mayor stated that school overcrowding and other local opposition arguments were not persuasive. The City Council member in whose district Fountain View would have been located opposed the project, but claimed he was not persuaded by the school, crime, and property values arguments; rather he expressed concern for families because of street traffic. HUD noted that the street where the project was to be built has a 30 mile-per-hour speed limit and is lined with apartment buildings, many of which are luxury buildings. HUD also commented that there had been no local opposition to a number of market-rate multifamily developments recently constructed nearby that could be occupied by school-age children, including some projects with more two- and three-bedroom units than Fountain View would have had.
HUD’s letter outlines eight remedies for Houston to address. If the City does not arrive at a Voluntary Compliance Agreement, HUD indicates that it will initiate administrative proceedings or refer the issue to the Department of Justice for judicial enforcement.
HUD’s January 17 letter is available at a blog post written by John Henneberger, co-director of the Texas Low Income Housing Information Service, an NLIHC state partner, at: http://bit.ly/2jWGu6A