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It’s Chapter 42 week

We won’t know for years what the upcoming revisions to Chapter 42, the development and density codes in Houston, will mean to the city and its development and population patterns. There’s certainly a lot of hope that the changes will be positive.

Southwest Houston, with its glut of apartments and condominiums, is three times denser than the city as a whole.

Whatever the term – aging, blighted, dilapidated – many of those complexes are ripe for redevelopment, as are the empty shopping centers and abandoned warehouses around them. Often havens for crime, these eyesores depress property values and are themselves a drag on the tax rolls.

Some revitalization efforts are underway, but residents like Jim Bigham, president of the Sharpstown Civic Association, are looking for a spark, a catalyst for change.

With a proposed rewrite of Houston’s development ordinance headed to the City Council table on Wednesday, city leaders say they have one.

The new rules, six years in the making, would allow greater single-family housing density outside Loop 610. That, builders say, will enable them to fit more houses on the same piece of land, bringing down the price of each home and making it more likely that market-price housing can be placed on dormant tracts.

“We’re stuck right now. What’s not working is having an empty retail – vacant, crappy – building for 20 years sitting on the same corner,” Bigham said. “We see the overall rule change facilitating redevelopment at some level, and that in itself is a positive thing.”

By their own admission, however, homebuilders will struggle to develop many of the tracts targeted for renewal because they do not have the capital or because they risk being outbid by apartment developers. Experts say land developers, who buy large tracts, invest in infrastructure and then sell individual lots to homebuilders, will play an important role if revitalization is to be widespread.

“Our challenge that we have to think about is, we have an aging city, and we need to think about how we go in and allow for our city to be updated,” city Planning Department Director Marlene Gafrick said. “To some degree, these rules will encourage the redevelopment of property, and you’ll utilize the existing infrastructure that’s already in place where the city has already made an investment in the infrastructure, streets and sewers.”

That’s the plan, anyway. How well it will work, I have no idea. The theory is simple enough – when you’ve got a lot of demand for something, you should try to increase the supply of that something – it’s the ancillary effects that are the big unknowns. Check back in ten years and we’ll see where we are.

One way to know if the revision has been a success is if this trend slows down.

More than 80 percent of the homes that sold last year were outside of Beltway 8, according to a study commissioned by the Houston Chronicle. Compare that to just 6 percent inside Loop 610 and 12.8 percent between the Loop and the Beltway.

What draws people to these far-off suburbs, sometimes 30 miles from downtown? Homeowners cite a multitude of reasons, like schools, shopping and affordable housing. Another big draw is jobs.

Houston’s outlying areas are home to major business districts.

“You keep seeing oil companies and major employers locating outside of downtown. They locate along the West Belt. They’re moving up to The Woodlands,” said Evert Crawford of Crawford Realty Advisors and the Institute for Regional Forecasting at the University of Houston’s C.T. Bauer College of Business.

“A lot of people don’t work downtown anymore,” said Crawford, who conducted the study.

[…]

The median price per square foot for a home outside the Beltway was $72.98 last year, according to the housing data. That was up 3.7 percent from 2011, but still less than half of the Inner Loop value of $178.09 per square foot.

That’s an insufficient comparison, since the Chapter 42 revision is aimed at property between 610 and the Beltway, but you get the idea. We’d like to see a higher percentage of homes purchased inside the Beltway in order to say that the Chapter 42 remake is doing what we wanted it to do. Now, single-family houses aren’t the be-all and end-all – there’s a ton of high-end apartment construction inside the Loop, and smaller apartments, the antithesis to sprawling suburban mansions, are a trend as well. A fuller range of metrics will be needed to really get an answer to the question of how successful the Chapter 42 changes were. But since we’ve been talking so much about how the goal is to make it easier to build affordable housing in Houston, then let’s look first at those numbers.

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