How federal dollars might help El Paso stem its affordable housing crisis

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The nonprofit publication Capital & Main produced this article. It is co-published with permission.

Paul Lopez didn’t realize there were options for him outside of El Paso’s homeless shelter for veterans. The disabled Gulf War veteran owned a home in Illinois before fleeing from a woman he says began to physically abuse him shortly after they married in 2022. With a terminal cancer diagnosis hanging over his head, he decided it was better to die helpless in Texas, where it is warm, than it would have been to freeze in Illinois.

With the help of a friend, Lopez recently found himself a single room, paying rent of $550 per month. He can cover the cost with disability money he is receiving through the VA, but it took months of living at the shelter or on the streets to reach this point, housed and independent. Yet he is one missed check away from losing it all again.

Affordable housing in El Paso, with a population of around 677,000 residents and an 18.3% poverty rate, is at a dire point, according to Abraham Gutierrez, assistant director with the Department of Community and Human Development in El Paso. More than 81,000 El Paso County households were considered “asset limited, income constrained, employed” in 2021 — meaning they were working full time but living at 20% above the federal poverty level.

Meanwhile, the average cost of a home in the city has also increased by 61% since 2014. Housing is affordable when individuals have enough money left over after paying housing costs (rent, mortgage, utilities, etc.) to afford other necessary budget expenses (food, transportation, child care, health care, etc.), researchers with the University of Texas at Austin wrote in a brief submitted to the 88th Texas Legislature.

The city could soon see some relief from its affordable housing crisis: El Paso is one of several cities across the state entitled to millions of federal dollars this year as part of President Joe Biden’s 2022 promise to increase the availability of affordable housing nationwide over the next five years. Texas, as a whole, was promised $148.2 million to be divided among dozens of cities and counties.

Supported by funding from the federal Department of Housing and Urban Development, El Paso’s Housing Opportunity Management Enterprises (HOME), which boasts a $91 million annual budget, is the 14th largest public housing authority in the U.S. and the largest in the state, assisting more than 52,000 residents. The funding it receives has declined significantly in recent years, however.

The budget for HUD has been cut by each presidential administration for decades, according to Gutierrez. Funding for individual housing departments, such as El Paso’s, trickles down through the national HUD program. States are allocated a certain amount of grant funding each year and they, in turn, allocate those funds to cities and counties across their states. State and local spending on housing and community development in Texas equaled just 0.9% of total expenditures in 2020, according to a brief submitted to the legislature by professors at UT-Austin. Texas ranked 49th in state spending on affordable housing nationwide, ahead of Nebraska, 33rd in local spending and 40th in combined state and local spending.

“The HUD entitlements have been slashed and cut significantly,” Gutierrez said. “We used to get double the amount that we get now; so what we’re dealing with right now is a very dire situation.”

The city has $11.37 million from four grants to spend on social programs meant to improve the lives of low-income Americans by addressing education, food insecurity and more. The funds may be used to improve affordable housing, but the city has another resource it intends to use this year.

Because COVID-19 forced certain operations to pause, it delayed the city’s use of HUD HOME Investment Partnership Program funds. What money was given to El Paso over the last few years accrued to $15 million that the city plans to use on specific high-ticket projects to increase the availability of affordable housing within the city. The submission period for project proposals ended in July. Organizers intentionally left few restrictions on what could be proposed, Gutierrez said.

Gutierrez hopes those who submit proposals can also show how they will leverage other sources of funding to complete the project.

Using those funds over the last decade, the city has used HUD HOME funds to invest in multiple affordable housing projects, such as the Artspace El Paso Lofts and the Blue Flame Apartments, which have benefited El Paso communities, Gutierrez said.

Given current inflation and housing affordability issues, among other indicators, Gutierrez said that generating as much affordable housing as possible and finding projects to benefit those who are low income greatly impacts the community.

Affordable housing and work performance

Affordable housing has always been a concern in Texas for low-income residents, said Jake Wegmann, a professor in the School of Architecture at UT-Austin.

“It’s not like you’ve ever had a lot of great options if you were a low-income household in Texas,” he said. “It’s always been the case, and there has always been a shortage of quality and secure, well-located housing in that situation.”

“But what’s different now is, even middle-income people are struggling to find housing that meets their needs in more and more places.”

Research shows that public housing can improve the lives of children and their families, he said. While it goes against the stereotypes, affordable housing helps the children living there to perform better in school and their parents to avoid the devastating impacts of eviction. Work performance improves in adults, and there are better health outcomes, Wegmann said.

“The reality is, for things like HOME funds, they’re extremely valuable and helpful, but the amount of money is just so tiny compared to the need,” he said.

Austin, which is home to nearly 1 million people, recently approved several hundred million dollars in bonds to be used for affordable housing. Wegmann does not expect it will fully address the problem, though it is a good start.

He likened current state and federal spending on affordable housing to trying to fill a bathtub using a cup while the drain at the bottom is unstoppered. It would take buckets to see any progress, and there is still a hole at the bottom.

But money alone will not resolve the issue, both Wegmann and Gutierrez said.

Wegmann was heartened by the conversation around affordable housing on the floor of the 88th Legislature, which is a big step for the state.

“The political will of elected officials in Texas to generate Texas’ own energy for [affordable housing] is close to nonexistent,” Wegmann said. “Which is not to say that the state Legislature may not do some important things to help with housing.”

The Legislature will need to focus on the regulations stymying housing production on a local and state level to begin making an impact. Zoning laws may prevent projects from construction exactly where they are needed, and the state could step in and change that, Wegmann said.

Policy changes that make it easier for apartments to be constructed near city cores would be a good start, Wegmann said. Policies need to align economic development with affordable housing, so city planning makes sense, and so the city can stop the migration of people from inside the city to the smaller satellite communities.

“That’s why, for us, it’s extremely important that we don’t just create affordable housing, and just increase the stock of affordable housing — that’s important, for sure — but we also need to create affordable housing where it makes sense for our community to live. To be close to schools, close to hospitals, close to employment centers,” Gutierrez said.

The cost to assist residents on the outskirts of town is immense and creates more pull on local funding. To get ahead of this, the city needs to make a robust investment in not only building new affordable housing, but in rehabilitating the vacant, older homes in the city’s center, Gutierrez said.

He also would like to see a federal review of the first-time home buyer program that restricts the purchase of homes worth more than $160,000.

“I mean, good luck finding a house that’s $160,000 for this program,” he said. “We can’t use it. So we basically have a program that is not well adjusted to the times that we live in.”

El Paso leadership has to be specific and intentional in its use of funding because it is so limited, said Gutierrez. Federal allocations improved, temporarily, in response to the COVID-19 pandemic.

“I would have loved to see the same investment from the state,” he said.

Paul Lopez, the formerly homeless veteran, was skeptical that El Paso had or was using millions to create more affordable housing options. If the city had millions to spend on affordable housing, it would alleviate the homelessness crisis in the city, he said.

“The ones just need a break, [the money] would help them. It would get them established, off the streets.”

Copyright 2023 Capital & Main

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