Fort Worth seeks new ways to tackle affordable housing crisis
In February, Carlin Thomas King, a local real estate agent, received a call about a new home on the market in Como, one of the historically black communities on the west side of Fort Worth.
List price? $486,500.
“He’s ridiculously tall,” King said. That’s a high selling price for just about any area, but it’s a really high selling price for that area considering there are houses there that are probably 70-80 years old.”
Rising prices over the years have reduced the availability of low-cost housing, both single and multi-family, throughout the city. Increasing pressure on the market – and competition from investors – means more residents are price conscious. The problem is exacerbated by higher interest rates, with the average 30-year fixed rate mortgage rising to 7.12%, and the median rent in Fort Worth rising from $803 in 2010 to $1,262-$1,557 in 2023.
As Fort Worth continues to grow – sooner or later its population is expected to grow from 950,000 to a million – the city is revisiting its housing strategy to reduce the affordable housing gap.
A report produced by Interface Studio shows that housing that matches the wages of new residents is more important than ever, said Amy Connolly, deputy director of community services for the city. This strategic housing plan, for which the city paid $24,240, is part of the city’s larger strategic plan to preserve neighborhoods.
“We want to make sure we know what these gaps are and will formulate housing policies and goals for our department and our city so we can try to create a better housing ecosystem,” Connolly said.
The report says that between 19,000 and 32,000 new homes will be needed to fill Fort Worth’s housing gap through new construction. This could cost taxpayers between $1.1 billion and $2.9 billion.
There are also problems for renters in Fort Worth, where prices in the city rose 32 percent between 2010 and 2019. About 40 percent of tenant households are saddled with expenses, the report says.
The Texas Relief Fund helped tenants across the state with more than $2 billion during the COVID-19 pandemic, but only $96 million remains, according to their website.
Low-income neighborhoods are most at risk
According to the National Association of Realtors, in 2021, 52% of home sales in Tarrant County came from investors. But in low-income neighborhoods, single-family properties were twice as likely to be purchased by an investor.
These investors, both small and corporate, often buy homes in these areas at a lower price before renovating and selling or renting them out for a profit. If the house they are buying needs to be demolished or the lot is empty, they will build a new one.
The trend for investors to buy real estate began during the COVID-19 pandemic when mortgage rates were low and buying demand was high. Investors often pay upfront in cash, which creates an uneven playing field.
“Investors have definitely given us a lot of trouble working with low-income buyers, even buyers who may not have necessarily been low-income,” King said. He said that not many people have thousands of dollars to spend on a house right away.
In addition, the number of homes under $200,000 on the market in Fort Worth has dropped significantly over the past decade, from 83% to 12%.
This trend has affected people like Cynthia Ashley, who dreams of buying her first home. She is 60 years old, preparing to retire in a few years, and she would like to have a place where she can enjoy her retirement.
But over the past two years, she says, she has bid unsuccessfully on 18 different properties and has always been beaten by an investor, someone who paid cash or someone who raised her bid. As she continued searching, she found nothing in her $225,000 budget that didn’t require a major overhaul.
“I felt really cheated because I thought I had done everything I had to do to prepare for this American dream to get out (out of the lease),” Ashley said. “It was possibly one of the most stressful moments of my life.”
The influence of investors buying these homes in low-income areas is a distraction to families looking to buy homes to create generational wealth, Connolly said. Investors tend to target homes in southeast and east Fort Worth, which tend to be predominantly communities of color.
“When you can only rent, it gives you less wealth to transfer. So that’s a concern,” Connolly said.
Another issue highlighted in the report was the deterioration of homes in these areas. A third of the city’s housing units are in low-income neighborhoods, but they account for just 22 percent of housing rehab permits in 2021.
Most homes in the southeast and east Fort Worth neighborhoods are older homes, with 75% built before 1960 compared to 30% citywide. But their often poor condition increases costs and risks, making them less affordable and riskier investments for low-income residents.
Graphic courtesy | City of Fort Worth Graphics Courtesy | City of Fort Worth
Investors don’t share the same concerns, which creates what King calls the regentrification effect.
“(Investors) come in with corporate money. They have millions of dollars to spend,” King said. “They are paying all this money to inflate what I would call the real cost.”
The problem of affordable housing can be traced back to market conditions over the past 50 years, Connolly says. Current conditions in low-income neighborhoods are consistent with years of declining investment and racial discrimination, Connolly said.
“You will find that all of these things overlap and decisions that were made 50, 70 years ago still have an impact today,” Connolly said. “That means a lot more investment will be needed to overcome all these hurdles.”
Analysis of urban housing to help shape policy
Affordable housing shortages are affecting cities of all sizes, says Laura Keyes, senior lecturer and undergraduate program coordinator in the University of North Texas Department of Public Administration.
“Fort Worth is not an anomaly. It matches where other cities are,” she said.
Keyes said that the solution to affordable housing problems could start by working to lower the price of a house or rent, but that the city has little influence on that. However, the city can find ways to offset these costs, such as lowering the cost of building permits or finding mechanisms to subsidize these costs.
As for investors, regulating them and their impact on the housing stock can be tricky, Connolly said, because Texas is a state with strong property rights.
An alternative solution, which Keys supports, is the practice of land banks, in which the city or non-profit organizations buy land or houses to sell at affordable prices.
“The more a city owns, the more it can control the prices of that property,” Keys said.
The City continues to use this approach in some areas, Connolly said, working with its partners and the Fort Worth Housing Finance Corporation.
“We are looking at existing programs that we need to address both options in order to increase the supply of new housing. And we are also looking at what we are currently doing to maintain accessibility for existing residents who are here,” she said.
On February 28, the company purchased 15 acres for an $11 million affordable housing project that will house up to 140 families. And the city is working on a partnership with Tarrant County to fund more permanent assisted housing on the Las Vegas trail.
The City also offers incentives to developers building or redeveloping neighborhood beautification areas to promote affordable housing, economic development, and service expansion for historically disadvantaged communities.
Are you looking for housing assistance? The City of Fort Worth Neighborhood Service has several programs and partners to help renters and homebuyers meet their housing needs.
The final report is expected to be presented to the City Council in May.
As for Ashley, who has bought a house for the first time, she has not given up on her dream, but admits that it is slowly fading away.
“I don’t think I’ll buy it, but I always hope, I look at it every day,” Ashley said. “You [once] could get a relatively nice house for less than $250,000 [in Texas.] I don’t know if we’ll ever have him again.
Thanks for reading Dallas Press News
Content and Photo credit go to Texas Standard
Read the full article on Texas Standard News
