Houston’s Midtown Development Zone spent nearly 15 years quietly amassing hundreds of lots in and around Third Ward. The land was purchased as part of an effort to slow gentrification and build affordable housing in a historic Black neighborhood.
Yet the Midtown Redevelopment Authority’s single largest expense to date is a half-empty office building where nobody lives.
Mike Morris, an investigative reporter focused on local government for the Houston Chronicle, said the Redevelopment Authority pitched the tower as a “central clearinghouse” for everything affordable housing related.
“They built it from the ground up using their affordable housing money – the single largest use of their affordable housing money,” he said. “The idea was that it would be full of housing-focused nonprofits, that folks seeking affordable housing could go there, apply for programs and grants, learn what options are available, etc.
It hasn’t panned out that way. Part of the issue is that the COVID-19 pandemic upended commercial office leasing. Part of the issue, according to some nonprofits in the area that we spoke to who were interested in moving to the facility, is they were quoted prices they just simply couldn’t afford.”
Morris said the Authority shifted their focus around 2020 from acquiring land to building housing on that land.
“They have built hundreds of housing units, usually by selling lots to homebuilders to build affordable single family homes, sometimes by giving or selling slightly larger tracts to nonprofits who are already building multifamily housing,” he said. “But hundreds of the hundreds of lots that they bought are still vacant. They’re often overgrown and community leaders in the area view this as really a missed opportunity.”
The office tower is not the Authority’s only questionable use of its affordable housing funds.
The main example, which we covered last year, is that a former Midtown executive and two landscaping vendors are facing felony charges for allegedly misusing some $8.5 million in midtown affordable housing funds,” Morris said. “They were supposed to be maintaining the land, the hundreds of lots, but they were often paid for work they didn’t do.
The former executive paid a company he himself formed. He was charging documents, say, in a romantic relationship with the vendor who made the most, at least on paper, out of this scheme. It was a bit of a mess.”
As it stands now, the office tower has fewer than expected tenants, Morris said.
“There are two main issues that the community remains disappointed in. They remember being told by Midtown officials that the building would feature retail on the first floor,” Morris said. “Nonprofits and community leaders in the area say that retail space is a crucial need in the community, that there’s nowhere for new entrepreneurs to go really in Third Ward to set up a business and start building. However, Midtown filled the entire first floor of the tower, initially with a health clinic. That health clinic then closed last year.
Community leaders said they were hopeful that Midtown would take this opportunity to reconsider their idea of having retail space on the first floor, a place where entrepreneurs could operate. Midtown, however, says that the health clinic is still under lease, still paying rent, even though they’re not in the space, and that they won’t consider a shift to retail until that lease expires toward the end of 2028.”
The other issue is the availability of community space, Morris said.
“The other main promise that they made in writing I found multiple times was that there would be a vibrant community gathering area in the building. That would be a community room that civic clubs and others could use,” he said.
“They have ultimately now made a policy that the community room – it’s called that, still – but that is to be used by tenants of the building first. And one of the main civic clubs in Third Ward tried repeatedly to use it, but it has never succeeded at doing that.”
Morris said at this point, the Redevelopment Authority plans to continue with their housing plans.
“Their plan continues to be that they will move forward building housing on the land that they own,” he said. “The predominant way that they’ve done that over the years has been to sell individual lots in groups of five or 10 roughly to homebuilders, building modest houses that are income-restricted to people making 80% or 100% or 120% of the area median income. This is how affordable housing programs are pegged to various income levels.
If there is a re-imagining on the horizon for the work that they’re doing, we’ll just have to see.”
