Posting THIS without comment – by LaRence Snowden, the HHA Chairman
These two developments are slated to be exempt from sales and use taxes, as well as ad valorem property taxes. The properties, leased from Lakeside PFC for 75 and 99 years respectively, have deed restrictions placed on them which require that a certain minimum number of units be set aside as affordable housing.
Though little information about the value of these projects is available, the Harris County Real Property records reflect that the Caroline at Memorial project has been loaned not less than $57,265,000 from Amegy Bank. It is expected that the developer will add some of its own capital to the construction of the 340 unit project. The loss of tax revenue, if the value were based solely on the loan amount, is over $1,425,000 annually. This would greatly impact Katy ISD, which would be denied $774,000 in ad valorem tax revenue annually, but still be required to increase their own cost to provide education to the additional students.
The Memorial at Six property is projected to have a slightly a smaller number of units – 307 units – than its neighbor down the street. If the cost is proportional (10% fewer units), we can project the lost ad valorem taxes on that project to be $1,282,000.
Between the two proposed new construction projects, the taxing authorities will lose over $2,700,000 in annual tax revenue than if these projects were built without the tax benefits. This lost revenue to the taxing authorities is not for only a single year, but possibly for the entirety of the 99 and 75 year lease terms
Sound Familiar?
Ada Burch – September 19th, 2022
HUD Audit
I first called HUD and reported the situation verbally and was asked to also go on their website so that I could add add the links to the Delcifino reports. The form on the website had fields where I had to enter in my name and contact information and then it had a very small section where I could type in the complaint and accusation of fraud, abuse, mismanagement. I tried to put it in a format that could be quickly read and understood. Also, since HUD is mainly interested in the affordable housing and equity part of the issues, I wrote it from that perspective. They will call if there is any further information that is required for the investigation:
- Houston Housing Authority has many low housing and Section 8 apartment complexes that do not offer the agreed % of low income and Sec 8 housing, if any at all.
- There is a huge conflict of interest as HHA members are also on the board of the PFC that buys the land for the low-income apartment complexes to be built, then gives 75–99-year leases to developers to build them, then exempts the developers from billions of dollars in taxes, including sales tax, per year. HHA even wants a 25% kickback from the developers on the sales taxes saved. There are currently over 45 new complexes being build and more in the works.
- No public hearing or notices have been given for those being built, which is part of the law.
- In the time between permits being requested and being granted, the city engineer is to complete impact studies for new construction of new complexes. In at least 1 case, permits were requested on April 25th and granted on April 26th, giving no time for studies on impact of traffic, flooding, emergency services, schools, or infrastructure like sewage, trash, and electricity grid, making area potentially unsafe for residents.
- Developers are getting $1.4 Billion in tax breaks that are not going to support services and infrastructure essential to keeping low-income complexes safe and equitable.
- See links below of local investigations and DO NOT pass this to local OIG in Houston as they are aware and are part of the problem.
- Reports: https://youtu.be/-j0736lRXxc https://youtu.be/Oh5yVth42fc https://youtu.be/jjrOv7T61cM https://youtu.be/d1s78Qyn21M
- Low-income families deserve equity and truly affordable housing. HHA is not serving some of the most vulnerable population, and are instead getting rich lining their pockets along with the developers. Please also stop all current developments that are being built while the investigation is ongoing to prevent further fraud, abuse, and mismanagement. Thank you.
Mary Nan Huffman – HHA Public Board Meeting – September 19th, 2022
Follow up notes with Mary Nan after the HHA Board Meeting:
1. Mary Nan attended the rescheduled HHA Meeting on September 19th, and presented the speech below. The Council member was limited to 3 minutes as are all speakers at HHA Meetings, and no answers were given.
2. Mary Nan has a meeting scheduled with HHA for Monday Sept 26th when it is hoped she can get some questions answered.
3. Mary Nan is engaged in dialog with the Mayor’s Office relating to adjustments or alternatives for these developments. She supports the idea of residents expressing their concerns to the Mayor during the public session of City Council. If you would like to sign up to speak at public session you must sign up the Monday before the Tuesday session by 3:00pm. If you would like more information about speaking during public session, please visit: https://www.houstontx.gov/council/meetingsinfo.html
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Speech to HHA Board
I am Houston City Council Member Mary Nan Huffman and I represent the residents on the west side of Houston where two large PFC developments are happening right now less than a mile from each other. As this was an area that was hit particularly hard by Hurricane Harvey, residents are understandably concerned.
As members of the Houston Housing Authority, you have a very important job. The mayor has appointed you and trusts you to do projects in the city of Houston that no one else can do. You have a lot of discretion. We know you are not necessarily under the same regulations and restrictions imposed by the Texas Department of Housing and Community Affairs, but we are asking you to follow their lead and use best practices.
The Texas Department of Housing and Community Affairs has a “one-mile, three-year rule.” If new construction or adaptive reuse of a development that is located within one linear mile or less from another development that serves the same target population and has received tax benefits, the development is considered ineligible. That seems like a pretty reasonable rule. We want to make sure the project is meeting the needs of the area before adding another one. We want to be sure it is serving its purpose before we continue to build and build. Here we have 2 projects happening almost simultaneously less than a mile from one another. Does the HHA have any safeguards like this in place?
Furthermore, no notice was given to the residents. Under the Texas Local Government code, notice should have been mailed to all residents within a ¼ mile of these developments, but none was given.
The people of the City of Houston have a right to know what is happening, but it is hard to keep up when meeting dates continue to change unexpectedly. Why do your meeting dates keep changing? Where is the transparency? Keep us informed. Keep me informed, so I can relay information to the residents. I hope to get all these questions answered when we finally have the chance to meet in person.
Today I am asking you to be careful with our neighborhoods. Slow down, consider the impact that these two large developments will have on the traffic, the infrastructure, flooding, and the neighbors. Listen to the concerns of the residents. Spread the projects out. Demonstrate a willingness to ensure there is transparency in the process.
I’m asking you to do what’s best for the City of Houston.
Chris Culberson – Sept 19th 2022 – HHA Public Board meeting
Use of CDBG Disaster Relief Funds by HHA
My name is Chris Culberson, a lifetime Houstonian and Vice President of Fleetwood West POA.
As part of the third supplemental appropriations bill for disaster relief passed in February 2018, Congress included $12 billion in Community Development Block Grant Disaster Relief funds (CDBG-DR) to be reserved for use in rebuilding Harvey victims’ homes, economic recovery and mitigating future disasters. HUD ultimately distributed $5 billion of those funds with $1.2 billion going to the City of Houston, $1.2 billion to Harris County and $2.5 billion to the State of
Texas.
Fast forward to 2022 and public records reveal the Houston Housing Authority and its partners have been quietly redirecting millions from these CDBG-DR funds to your affordable housing projects. One recent example is the Richcrest Apartments project which has asked Harris County Commissioner’s Court to cover project budget overruns with more taxpayer CDBG funds on four separate occasions (see latest request attached).
Following the Harvey flooding, hundreds of Westside Houston flood victims applied for CDBG-DR funds to restore their homes and were denied or in best cases, received a pittance relative to their losses. Now seeing those very CDBG-DR funds redirected to develop projects on properties flooded during Harvey is insult upon injury to those flood victims.
As a taxpayer, I request you conduct and publish an independent audit to answer these questions:
- Which specific HHA projects have CDBG funds been solicited for?
- Which specific HHA projects have been either partially or fully funded by CDBG funds?
- Which specific HHA projects have been either partially or fully funded by loans guaranteed by HUD?
- What is the total amount to date of CDBG funds allocated, expended, or otherwise encumbered by loan
guarantees to lenders funding HHA projects?
My name is Greg Sergesketter.
Our group spoke at your last meeting about:
- Resolution 3320 passed by you on August 17, 2021, for the
Memorial at Six Project. - Resolution 3460 passed by you on June 14, 2022, for the Caroline
at Memorial Project
Let me start with something that just came to my attention. Chairman
Snowden, you had published just on Friday an article titled, “How You Can Speak Up And Become An Affordable Housing Ally”. Your position as chair of HHA was the first item in your by-line.
I think I am being charitable in describing your article as containing quite a bit of misinformation (that seems to be the term de jour).
Due to the arbitrary strictures imposed by you, I only have time for one
example of misinformation. In your article you state, “Numerous studies show that affordable housing has either a positive or neutral impact on property values. Moreover, having more affordable housing options can lead to reduced crime rates. That’s the reality, and it’s good news for everyone.”
You don’t provide a cite for your statement.
Only in another part of your article do you make a relevant statement, which is “According to a Stanford Graduate School of Business study, the benefits of mixed-income housing include increased property values, a more diverse community and a greater potential for higher quality homes and services. And when cities champion this housing model, they break down systemic barriers and build more unified communities.”
So let’s look at your link. Directly quoting, “The two studied affordable
housing projects’ impact on the surrounding neighborhoods over a 10-year span, and found that new projects in poorer neighborhoods increased surrounding home prices and reduced crime, while new projects in wealthier neighborhoods drove down home prices and decreased racial diversity. In the high-income areas, you saw a strong housing price drop very locally, and then it radiated outward over time. The price effects remain even after 10 years”.
That cuts directly against your proposition and actually supports not
approving locations such as those we are discussing again today.
I am concerned that your article and using your government position to
promote it may have the unintended effect of irrationally fanning the flames of bigotry either by your negligence or intentional dishonesty.
For almost two weeks you have had my name, email and telephone number to address HHA’s multiple violations of state law (Texas Local Government Code §§ 392.053 & .054) and perhaps show me the error of my ways. But it has been total and complete radio silence.
Agenda For the HHA Commissioner’s Meeting
at 3:00pm on Monday, September 19th, 2022
The Public Comments are Item VI. on the Agenda
Dolcefino Consulting – September 13th, 2022
September 7th, 2022 – HHA Board Meeting
A full house at the HHA Board Meeting, September 7th, 2022, probably 90 – 100 of “the public”. We send a BIG Thank You to all who turned up.
Our 8 speakers did a great job, there were a few others and a couple of detractors. Wayne Dolcefino also spoke with a passion about the workings of the HHA, effectively a corrupt body. The HHA Trustees showed a high level of indifference, and one even yawned to make his point. A video was made of the proceedings, and the section on Wayne Dolcefino’s speech is HERE (turn on your sound, and the volume up). We will post the full meeting shortly. Stay tuned for the next moves.
Links to ALL the individual speakers at the recent HHA meeting are HERE
Six at Memorial after a rain storm
Useful Addresses
Is this just a coincidence? No, see below…
Houston Housing Authority
2640 Fountain View Dr,
Suite 350
Houston, TX 77057
| The HHA’s mission is “to improve lives by providing quality, affordable housing options and promoting education and economic self-sufficiency.” |
Houston Housing Authority Committee
100% Appointed By – The Mayor
100% Terms Expired
Lakeside Place PFC is a non-profit public facility corporation created by the Houston Housing Authority. Lakeside Place purchased the property from ATMA Memorial, LLC in August 2021. In September 2021, Lakeside Place entered into a 75 year lease of the property to Memorial at Six Lessee, LLC. Both ATMA Memorial and Memorial at Six are managed by Cardan, LLC. The manager of Cardan is Rene Bremauntz-Michavila.
Along with the lease to Memorial at Six, Lakeside Place put deed restrictions on the property requiring the certain percentages of the units to be built be leased to “low income” tenants. Of the proposed 307 units, 121 are set aside for tenants earning no more than 80% of the median family income for the greater Houston area. 31 units are set aside for tenants earning less than 60% of the area median income. 5 units are set aside for Houston Housing voucher tenants(what I would term Section 8 vouchers.) These are the minimum set asides. The landlord could do more. Rents for the low income units are below market based on a formula taking into account income.
The benefit to the developer is that development is exempt from sales and use taxes during construction and from property taxes during operation so long as it maintains the low income unit requirements. If the development loses it tax exemption, the rent limits go away. Also, the loan for the developer is guaranteed by HUD, which usually means a favorable rate.
We have no knowledge about why this was not known to City Council. There is a requirement of one public meeting of the Houston Housing Authority to discuss the project. I saw nothing in the statute requiring notice be given to the neighboring owners.