ANALYSIS OF IMPEDIMENTS

Transcription

1 ANALYSIS OF IMPEDIMENTS TO FAIR HOUSING PHASE I HURRICANE IMPACTED COMMUNITIES State of Texas Texas Department of Housing and Community Affairs Texas Department of Rural Affairs In conjunction with the AI Committee March 2011 Approved by U.S Department of Housing and Urban Development May 13, 2011

2 TABLE OF CONTENTS INDEX OF TABLES, GRAPHS, CHARTS, ETC SECTION 1. PURPOSE OF PHASE 1, ANALYSIS OF IMPEDIMENTS TO FAIR HOUSING AND EXECUTIVE SUMMARY SECTION 2. BACKGROUND OF REGION SECTION 3. EVALUATION OF LARGE URBAN CENTERS AND SURROUNDING AREAS-- HOUSTON AND GALVESTON SECTION 4. GOLDEN TRIANGLE AND SURROUNDING COMMUNITIES SECTION 5. LOWER RIO GRANDE VALLEY SECTION 6. EVALUATION OF SMALL COMMUNITIES DEEP EAST TEXAS COUNCIL OF GOVERNMENTS SECTION 7. FAIR HOUSING COMPLAINTS AND SURVEY OF FAIR HOUSING COMPLAINT PROCEDURES IN THE TEXAS DISASTER RELIEF AREA SECTION 8. COMPENDIUM OF IMPEDIMENTS AND POSSIBLE ACTIONS APPENDICES APPENDIX A - EXECUTED AND APPROVED CONCILIATION AGREEMENT APPENDIX B -COUNTY MAPS OF SECTION 8 HOUSING AS HELD BY HUD APPENDIX C - FAIR HOUSING FILINGS FROM TEXAS WOKFORCE COMMISSION AND REGION 6 HUD APPENDIX D - DEMOGRAPHIC DATA FROM 2000 AND 1990 CENSUS APPENDIX F - LIST OF PROJECTS AND PROGRAMS BY JURISDICTION 2005 TO PRESENT APPENDIX G - INTERVIEWS/FOCUS GROUPS CONDUCTED BY SOUTHWEST FAIR HOUSING COUNCIL APPENDIX H - SUPPORTING DATA FOR HOME MORTGAGE DISCLOSURE ACT ANALYSIS March 2011 State of Texas Analysis to Impediments to Fair Housing Page 2 of 196

3 INDEX OF TABLES, GRAPHS, CHARTS, ETC. TABLE 2-1 PROJECTED POPULATION STATE OF TEXAS TABLE 2.2 AGE BY AGE GROUP AND RACE/ETHNICITY TABLE 2.3 ANNUAL POVERTY ESTIMATES BY RACE AND LATINO ORIGIN TEXAS, 2006 TO TABLE 2-5 PERSONS WITH DISABILITIES TEXAS, TABLE 2-6 PHA UNITS TEXAS, TABLE 2-7 PERSONS WITH HIV/AIDS TEXAS, TABLE 2-8 COLONIA RESIDENTS TEXAS, ESTIMATED TABLE 2-9 MIGRANT SEASONAL FARMWORKER POPULATION ESTIMATES TEXAS, TABLE 2-10 HOUSEHOLDS WITH ONE OR MORE HOUSING NEEDS - TEXAS, FIGURE 2-1 NUMBER OF UNITS LACKING KITCHEN AND/OR PLUMBING BY AFFORDABILITY CATEGORY TEXAS, FIGURE 2-2 RENTER HOUSEHOLDS WITH SUBSTANDARD HOUSING BY PERCENT TEXAS, FIGURE 2-3 OWNER HOUSEHOLDS WITH SUBSTANDARD HOUSING PERCENT TEXAS, FIGURE 2-4 RENTER HOUSEHOLDS WITH EXTREME HOUSING COST BURDEN (>30% OF INCOME) BY PERCENT TEXAS, FIGURE 2-5 OWNER HOUSEHOLDS WITH EXCESS HOUSING COST BURDEN (>30% OF INCOME) BY PERCENT TEXAS FIGURE 2-6EXCESS HOUSING COST BURDEN BY INCOME GROUP TEXAS, FIGURE RENTER HOUSEHOLDS WITH INCIDENCE OF OVERCROWDING BY PERCENT TEXAS, FIGURE 2-8OWNER HOUSEHOLDS WITH INCIDENCE OF OVERCROWDING BY PERCENT FIGURE 2-9OVERCROWDED HOUSEHOLDS BY INCOME GROUP TEXAS, TABLE 3-1PROJECTED POPULATION H-GAC REGION TABLE 3-2AGE BY AGE GROUP AND RACE/ETHNICITY REGION 6 POVERTY FIGURES, REGION 6 HOUSEHOLD INCOME TABLE 3-3 INCOME LEVELS FOR REGION 6 AS COMPARED TO STATE AS A WHOLE TABLE 3-4 H-GAC HOMELESS, TABLE 3-5REGION 6 PERSONS WITH, WITHOUT DISABILITIES, TABLE 3-6 PUBLIC HOUSING UNITS IN REGION March 2011 State of Texas Analysis to Impediments to Fair Housing Page 3 of 196

4 TABLE 3-7 H-GAC PUBLIC ASSISTANCE REQUEST INVENTORY, SFY TABLE 3-8 H-GAC PERSONS LIVING WITH HIV/AIDS, TABLE 3-9 H-GAC MIGRANT AND SEASONAL FARMWORKER POPULATION, TABLE 3-10 REGION 6 HOUSING SUPPLY, TABLE 3-11 H-GAC HOUSEHOLDS WITH HOUSING PROBLEMS, CHART 3-1A DERIVED FROM DATA IN TABLE 1A CHART 3-2A DERIVED FROM DATA IN TABLE 2A CHART 3-3A DERIVED FROM DATA IN TABLE 3A CHART 3-1B DERIVED FROM DATA IN TABLE 1B CHART 3-2B DERIVED FROM DATA IN TABLE 2B CHART 3-3B DERIVED FROM DATA IN TABLE 3B CHART 3-1C DERIVED FROM DATA IN TABLE 1C CHART 3-2C DERIVED FROM DATA IN TABLE 2C CHART 3C DERIVED FROM DATA IN TABLE 3C CHART 3.1.1A DERIVED FROM DATA IN CHART 1A CHART 3-1.2A DERIVED FROM DATA IN TABLE 2A CHART 3-3.3A DERIVED FROM DATA IN TABLE 3A CHART 3-1.1B DERIVED FROM DATA IN TABLE 1B CHART 3-1.2B DERIVED FROM DATA IN TABLE 2B CHART 3-1.3B DERIVED FROM DATA IN TABLE 3B CHART 3-1.1C DERIVED FROM DATA IN TABLE 1C CHART 3-1.2C DERIVED FROM DATA IN TABLE 2C CHART 3-1.3C DERIVED FROM DATA IN TABLE 3C TABLE 4-1 PROJECTED POPULATION SETRPC REGION TABLE 4-2 AGE BY AGE GROUP AND RACE/ETHNICITY TABLE 4-3 SETRPC POVERTY FIGURES, REGION 5 HOUSEHOLD INCOMES TABLE 4-4 SETRPC HOUSEHOLD INCOME TABLE 4-5 REGION 5 PERSONS IN OTHER GROUP QUARTERS, TABLE 4-6 SETRPC PERSONS WITH DISABILITIES TABLE 4-7 REGION 5 PERSONS WITH HIV/AIDS, TABLE 4-8 SETRPC/GOLDEN TRIANGLE MIGRANT AND SEASONAL FARMWORKER POPULATION, TABLE 4-9 SETRPC/GOLDEN TRIANGLE PUBLIC ASSISTANCE REQUEST INVENTORY, SFY TABLE 4-10 REGION 5 HOUSING SUPPLY, TABLE 4-11 SETRPC/GOLDEN TRIANGLE HOUSEHOLDS WITH HOUSING PROBLEMS, CHART 4-1A DERIVED FROM DATA IN TABLE 1A CHART 4-2A DERIVED FROM DATA IN TABLE 2A March 2011 State of Texas Analysis to Impediments to Fair Housing Page 4 of 196

5 CHART 3A DERIVED FROM DATA IN TABLE 3A CHART 4-1B DERIVED FROM DATA IN TABLE 1B CHART 4-2B DERIVED FROM DATA IN TABLE 2B CHART 4-3B DERIVED FROM DATA IN TABLE 3B CHART 4-1C DERIVED FROM DATA IN TABLE 1C CHART 4-2C DERIVED FROM DATA IN TABLE 2C CHART 4-3C DERIVED FROM DATA IN TABLE 3C CHART 4-1.1A DERIVED FROM DATA IN TABLE1A CHART 4-1.2A DERIVED FROM DATA IN TABLE 2A CHART 4-1.3A DERIVED FROM DATA IN TABLE 3A CHART 4-1.1B DERIVED FROM DATA IN TABLE 1B CHART 4-1.2B DERIVED FROM DATA IN TABLE 2B CHART 4-1.3B DERIVED FROM DATA IN TABLE 3B CHART 4-1.1C DERIVED FROM DATA IN TABLE 1C CHART 4-1.2C DERIVED FROM DATA IN TABLE 2C CHART 4-1.3C DERIVED FROM DATA IN TABLE 3C TABLE 4-12 LOT SIZES IN SETRPC TABLE 4-13 MINIMUM SQUARE FOOTAGE REQUIREMENTS OVER 1000 SQ FEET TABLE 5-1 PROJECTED POPULATION LRGVDC REGION TABLE 5-2 AGE BY AGE GROUP AND ETHNICITY TABLE 5-3 LRGV POVERTY FIGURES, TABLE 5-4 LRGVDC PERSONS IN OTHER GROUP QUARTERS, TALE 5-5 PERSONS WITH DISABILITIES TABLE 5-6 REGION 11 PERSONS LIVING WITH HIV/AIDS, TABLE 5-7 LRGV COLONIA POPULATION, ESTIMATED TABLE 5-8 MIGRANT AND SEASONAL FARMWORKER POPULATION, TABLE 5-9 REGION 11 PUBLIC ASSISTANCE REQUEST INVENTORY, SFY TABLE 5-10 NUMBER OF UNITS LACKING KITCHEN AND/OR PLUMBING BY AFFORDABILITY CATEGORY LRGV, BAR GRAPH 5-1 RENTER HOUSEHOLDS WITH SUBSTANDARD HOUSING BY INCOME CATEGORY TEXAS, BAR GRAPH 5-2 OWNER HOUSEHOLDS WITH SUBSTANDARD HOUSING BY INCOME CATEGORY TEXAS, BAR GRAPH 5-3 RENTER HOUSEHOLDS WITH HOUSING COST BURDEN BY INCOME CATEGORY TEXAS, BAR GRAPH 5-4 RENTER HOUSEHOLDS WITH HOUSING COST BURDEN BY INCOME CATEGORY TEXAS, TABLE 5-11 LRGVDC HOUSEHOLDS WITH A COST BURDEN >30% BAR GRAPH 5-5 RENTER HOUSEHOLDS WITH INCIDENCE OF OVERCROWDING BY INCOME GROUP TEXAS, March 2011 State of Texas Analysis to Impediments to Fair Housing Page 5 of 196

6 BAR GRAPH 5-6 OWNER HOUSEHOLDS WITH INCIDENCE OF OVERCROWDING BY INCOME GROUP TEXAS, TABLE 5-12 LRGVDC HOUSEHOLDS THAT ARE OVERCROWDED CHART 5-1A DERIVED FROM DATA IN TABLE 1A CHART 5-2A DERIVED FROM DATA IN TABLE 2A CHART 5-3A DERIVED FROM DATA IN TABLE 3A CHART 5-1B DERIVED FROM DATA IN TABLE 1B CHART 5-2B DERIVED FROM DATA IN TABLE 2B CHART 5-3B DERIVED FROM DATA IN TABLE 3B CHART 5-1C DERIVED FROM DATA IN TABLE 1C CHART 5-2C DERIVED FROM DATA IN TABLE 2C CHART 5-3C DERIVED FROM DATA IN TABLE 3C CHART 5-1.1A DERIVED FROM DATA IN TABLE 1A FHA CHART 5-1.2A DERIVED FROM DATA IN TABLE 2A FHA CHART 5-1.3A DERIVED FROM DATA IN TABLE 3A CHART 5-1.1B DERIVED FROM DATA IN TABLE 1B CHART 5-1.2B DERIVED FROM DATA IN TABLE 2B CHART 5-1.3B DERIVED FROM DATA IN TABLE 3B CHART 5-1.1C DERIVED FROM DATA IN TABLE 1C CHART 5-1.2C DERIVED FROM DATA IN TABLE 2C CHART 5-1.3C DERIVED FROM DATA IN TABLE 3C TABLE 6-1 PROJECTED POPULATION DETCOG REGION TABLE 6-2 PROJECTED POPULATION ANDERSON COUNTY TABLE 6-3 PROJECTED POPULATION CASS COUNTY TABLE 6-4 PROJECTED POPULATION CHEROKEE COUNTY TABLE 6-5 PROJECTED POPULATION GRIMES COUNTY TABLE 6-6 PROJECTED POPULATION HARRISON COUNTY TABLE 6-7 PROJECTED POPULATION LEON COUNTY TABLE 6-8 PROJECTED POPULATION MADISON COUNTY TABLE 6-9 PROJECTED POPULATION MARION COUNTY TABLE 6-10 PROJECTED POPULATION MILAM COUNTY TABLE 6-11 PROJECTED POPULATION MORRIS COUNTY TABLE 6-12 PROJECTED POPULATION PANOLA COUNTY TABLE 6-13 PROJECTED POPULATION ROBERTSON COUNTY TABLE 6-14 PROJECTED POPULATION RUSK COUNTY TABLE 6-15 PROJECTED POPULATION WASHINGTON COUNTY TABLE 6-16 AGE BY AGE GROUP AND ETHNICITY REGION 5 HOUSEHOLD INCOMES TABLE 6-17 REGION 5 POVERTY FIGURES, March 2011 State of Texas Analysis to Impediments to Fair Housing Page 6 of 196

7 TABLE 6-18 REGION 5 PERSONS IN OTHER GROUP QUARTERS, TABLE 6-19 BY COUNTY PERSONS IN OTHER GROUP QUARTERS, TABLE 6-20 REGION 5 PERSONS WITH AND WITHOUT DISABILITIES, TABLE 6-21 BY COUNTY PERSON WITH DISABILITIES TABLE 6-22 REGION 5 PERSONS WITH HIV/AIDS, TABLE 6-23 REGION 5 MIGRANT AND SEASONAL FARMWORKER POPULATION, TABLE 6-24 BY COUNTY MIGRANT AND SEASONAL FARMWORKER POPULATION, TABLE 6-25 EAST TEXAS IMPACTED AREAS PUBLIC ASSISTANCE REQUEST INVENTORY, SFY TABLE 6-26 REGION 4 HOUSING SUPPLY, TABLE 6-27 REGION 4 HOUSEHOLDS WITH HOUSING PROBLEMS, TABLE 6-28 REGION 5 HOUSING SUPPLY, TABLE 6-29 REGION 5 HOUSEHOLDS WITH HOUSING PROBLEMS, TABLE 6-30 REGION 8 HOUSING SUPPLY, TABLE 6-31 REGION 8 HOUSEHOLDS WITH HOUSING PROBLEMS, CHART 6-1A DERIVED FROM DATA IN TABLE 1A CHART 6-2A - APPENDIX H 2A DERIVED FROM DATA IN TABLE 2A CHART 6-3A DERIVED FROM DATA IN TABLE 3A CHART 6-1B DERIVED FROM DATA IN TABLE 1B CHART 6-2B DERIVED FROM DATA IN TABLE 2B CHART 6-3B DERIVED FROM DATA IN TABLE 3B CHART 6-1C DERIVED FROM DATA IN TABLE 1C CHART 6-2C DERIVED FROM DATA IN TABLE 2C CHART 6-3C DERIVED FROM DATA IN TABLE 3C CHART 6-1.1A DERIVED FROM DATA IN TABLE 1A CHART 6-1.2A DERIVED FROM DATA IN TABLE 2A CHART 6-1.3A DERIVED FROM DATA IN TABLE 3A CHART 6-1.1B DERIVED FROM DATA IN TABLE 1B CHART 6-1.2B DERIVED FROM DATA IN TABLE 2B CHART 6-1.3B DERIVED FROM DATA IN TABLE 3B CHART 6-1.1C DERIVED FROM DATA IN TABLE 1C CHART 6-1.2C DERIVED FROM DATA IN TABLE 2C CHART 6-1.3C DERIVED FROM DATA IN TABLE 3C TABLE 7-1 TWC COMPLAINTS March 2011 State of Texas Analysis to Impediments to Fair Housing Page 7 of 196

8 SECTION 1. PURPOSE OF PHASE 1, ANALYSIS OF IMPEDIMENTS TO FAIR HOUSING, AND EXECUTIVE SUMMARY. EXECUTIVE SUMMARY. This Phase I Analysis of Impediments to Fair Housing directly pertains to the $1.6 billion in the second round of Community Development Block Grant funding allocated to the State of Texas by the U.S. Department of Housing and Urban Development (HUD) to assist citizens and communities to recover from the devastation of Hurricanes Dolly and Ike, both of which heavily impacted the Texas Coast during The Phase I Analysis of Impediments is the result of two important factors: a greatly heightened emphasis by HUD on compliance with federal requirements to Affirmatively Further Fair Housing; and a fair housing complaint to HUD filed by two housing advocacy groups against the State of Texas. The fair housing complaint resulted in a HUD-approved, legally binding conciliation agreement between the State and the complainants. Nothing in this document constitutes a legal finding that the State or any of its jurisdictions has violated or is in violation of any federal laws. Nor is anything in this document intended to set forth a requirement or standard on which any allegation of a future violation may be based. The State s plan to pursue specific action steps as described in this document presumes continued federal and state appropriations authority to conduct such activities. Where changes in state law or increased funding are necessary to carry out recommendations, the parties to this document acknowledge that is the ultimate decision of the Texas Legislature whether to enact laws and appropriate funds. This document also contains numerous recommendations for increased training of locally elected officials and their staffs. The State recognizes and respects the autonomy of independently elected officials and acknowledges there are limitations on its ability to direct independent, locally elected officials to take certain actions. Nothing herein is intended to relieve the State of any of its obligations to comply with federal housing laws and the Conciliation Agreement, entered into May 25, These obligations will March 2011 State of Texas Analysis to Impediments to Fair Housing Page 8 of 196

9 continue to be met by the designated state agencies, TDHCA and TDRA, or any successor agencies designated by the Legislature. One of the primary items included in the conciliation agreement (included as Appendix A) is that the State will complete a Phase I Analysis of Impediments to Fair Housing for the areas within the Dolly and Ike impacted areas and submit the Phase I Analysis of Impediments to HUD for review by January 1, The Phase I AI is intended to be a tool used by state agencies, and recipients and subrecipients of CDBG disaster recovery funds to promote the State s goal that infrastructure, housing and economic development projects affirmatively further fair housing within the impacted communities, as required by federal law. The Phase I AI identifies 16 impediments to fair housing and includes individual recommended actions that recipients and subrecipients of funding should consider as they allocate funding and prepare applications for projects that will be funded by the remainder of round 2 funds. The impediments fall into four basic categories: education, training, planning, and enforcement. Some impediments pertain to activities to be conducted by the State. Others pertain to local governments. Not all impediments or recommended actions pertain to any single entity. Specific impediments and recommendations are presented in Section 8. The State completed the Phase I AI under a very demanding schedule using a variety of resources from specialized consultants and demographers to input from citizens, local governments and advocacy groups. The Phase I AI also underwent substantial discussion and review by an AI Committee (as required in the conciliation agreement). The AI Committee included representation by the complainants, the Texas Department of Housing and Community Affairs ( TDHCA ), Texas Department of Rural Affairs ( TDRA ), Association of Rural Communities In Texas ( ARC ), and the four councils of government most impacted by Dolly and Ike (i.e., Deep East Texas Council of Governments, Houston-Galveston Area Council, Lower Rio Grande Valley Regional Development Council, and the South East Regional Planning Commission). March 2011 State of Texas Analysis to Impediments to Fair Housing Page 9 of 196

10 Purpose of the Phase 1 Analysis of Impediments. It is almost impossible to describe a typical Texas community, much less identify all of its characteristics, its citizens and its challenges in a single document and we do not attempt to do so in this, Phase 1 of the state s Analysis to Impediments to Fair Housing (AI). In section eight of this AI titled Compendium of Impediments and Possible Solutions, the state has identified several actions to help build a greater understanding of the Fair Housing Act and specifically to affirmatively further fair housing. That section also identifies impediments and action steps to provide guidance on issues to address in a community s individual analysis of impediments to fair housing and as it seeks to affirmatively further fair housing. In examining impediments to Fair Housing for members of protected classes under the Fair Housing Act 1 race, color, religion, national origin, sex, disability, and familial status - in this AI, we will also look at current federal and state complaints that allege any direct violations of the Fair Housing Act for root causes caused by public policies or by practices in the private market place whether intentional or unintentional that may limit fair housing choices for all Texans. As a result of heightened emphasis on fair housing by HUD and the conciliation agreement, the approach of this AI is different than previous versions presented by the State. It reflects a change in what constitutes a comprehensive review of fair housing in communities. This AI seeks to provide foundational research information regarding racial housing patterns and to provide guidance to assist a community in analyzing what it means to affirmatively further fair housing in their community in both housing and infrastructure projects. A Fair Housing Complaint Against the State of Texas. In 2008, HUD accepted a fair housing complaint filed by Texas housing advocates raising issues about Texas ability to certify that it considered affirmatively furthering fair housing with disaster recovery funds. 2 HUD sent Texas a Request for Response to the issues raised in the complaint and indicated that after the response was received, they would conduct an investigation if necessary. Among the points raised in the complaint was that the State, and 1 42 USC Case No (Title VII) and Case No ( 109) March 2011 State of Texas Analysis to Impediments to Fair Housing Page 10 of 196

11 several potential local sub-recipients of the disaster funding, had inadequate or outdated AI s with which to certify that the state was affirmatively furthering fair housing. Development of a Conciliation Agreement. HUD informed the state that absent reaching a conciliation agreement with the housing advocates, HUD would immediately launch an investigation in Texas, much as it did with Westchester County, N.Y., and halt all CDBG funding in the state, including disaster recovery funding. Rather than delay the funds for the length of a pending investigation, the State moved toward a Conciliation Agreement 3 with the Complainants to ensure Texas had access to more than $3.1 billion in disaster recovery funds. The Conciliation Agreement is included as Appendix A. An Overview of the Phase I AI Process. To meet the concerns raised in the complaint the parties agreed to develop the state s updated AI in two Phases. Phase 1 will focus on areas of the state that are receiving the majority of disaster funding awarded to Texas by Congress. 4 Phase 2 will address the balance of the state. In preparing the AI under these unusual circumstances, the state had to look at combining elements of both a traditional statewide AI with selective elements of a local AI to help provide guidance to the cities and counties receiving disaster funds. In reality, the ability to take on this task in roughly 120 days and cover each community was not possible using a traditional method. In the Conciliation Agreement, TDHCA agreed to appoint a committee to work with the state. 5 The Committee, in an effort to make the AI document more user friendly, determined that in many cases, communities fell into four groups that were similar in nature. These groups are represented in Sections three through six of this document, and include: Section 3. Evaluation of Large Urban Centers and Surrounding Areas Houston and Galveston. Section 4. Golden Triangle and Surrounding Communities. 3 Attached as Addendum A 4 Public Law The Committee was made up of two representatives from the housing advocacy community, two members from Texas Department of Rural Affairs, two members from TDHCA, one representative of rural communities, and one representative from each of the four non-pool COGs. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 11 of 196

12 Section 5. Lower Rio Grande Valley. Section 6. Evaluation of Small Communities Deep East Texas Council of Governments. With that distinction, information could be gathered that might not address each issue in every community, but represent a fairly comprehensive set of circumstances that would provide direction to similar size and resourced cities as to what to consider in reviewing their commitment to affirmatively further fair housing. In order to complete the work in a timely fashion, the state determined that a collaborative approach would be necessary and contracted with the Southwest Fair Housing Council (SWFHC) in Tucson, Arizona selected from a list of recommended consultants, as the primary contractor to develop the AI. SWFHC conducted interviews, held focus groups and gathered data on allegations of individual acts of discrimination for the report as well as coordinating additional efforts and supervising subcontractors. SWFHC contracted with National Community Reinvestment Coalition to conduct a portfolio and market share analysis using 2008 Home Mortgage Disclosure Act data and the HOPE Fair Housing Center for information regarding complaints. Rice University and Dr. Steve Murdock (a former census bureau director and former state chief demographer) were retained to help provide the demographic and community housing patterns for the document. TDHCA staff were also involved in the research and drafting process. The AI as drafted has foundational information regarding the members of protected classes, residential patterns, and use of public funds to be used as resources for the public or a community planning staff to assist in their own reviews regarding affirmatively furthering fair housing. Appendix C provides a table of individual fair housing complaints made to HUD identified by type and outcomes by county. Appendix D contains tables using 1990 and 2000 census information that break out the demographic data including racial segregation patterns in neighborhood groups for communities over 10,000 in population. Presented with this are visual representations of the concentration of minorities and poverty in the communities by neighborhood groups. Also included in Appendix D is a representative sample of smaller communities (those having more than one census tract for comparisons) to demonstrate the racial concentrations in smaller communities. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 12 of 196

13 Communities in the hurricane impacted area have provided their funding patterns for the past seven years as Appendix F in this document. This provides information on the way other communities with similar populations and funding use their public funds in both infrastructure and housing programs. Appendix H provides a resource for the Home Mortgage Disclosure Act tables used to develop the section on mortgage lending trends related to race. The mortgage information does take into account similar income patterns, but does not conduct a cross- analysis for all reasons why loans were denied. Appendix B provides a map of the location of subsidized housing and Housing Choice Voucher holders in the relevant jurisdictions. Relevance of the Phase I AI. In developing this Analysis of Impediments to Fair Housing (AI), the State of Texas has worked closely with representatives from the communities impacted by Hurricanes Ike and Dolly, persons representing fair housing, and civil rights advocacy groups. The public was also invited to provide input through surveys, focus groups, and public comment periods. The State of Texas is anticipated to continue its population growth and to move toward a different ethnic make-up with Hispanics increasing as a percentage of the population in a steady growth rate. Although not all portions of the hurricane impacted areas will see growth, the population will change. The state s and the impacted region s population is also aging, with a greater need to provide support as the number of persons who are 65 and older increases. As such, accessibility and the availability of affordable housing could be even more in demand in the future. Texas is a diverse culture and faces many challenges. The challenges include the size of Texas and its growing population and the demands placed on the state as a result. The Texas labor force at 12 million is second only to the California s labor force of 18 million. Texas ranks as the number one state for Projected Job Growth from 2009 to In addition to the increasing population within, Texas remains the number one relocation destination in the U.S. for the fifth year in a row based on Allied Van Lines 42nd Annual Magnet Report, which tracks U.S. 6 Time Magazine, May 25, March 2011 State of Texas Analysis to Impediments to Fair Housing Page 13 of 196

14 migration patterns. 7 Part of the reason for the migration is that, according to the Missouri Economic Research & Information Center, Texas ranks fifth in the nation for lowest cost-ofliving. 8 Still, despite it cost of living and projected job growth, the AI has identified that hurricane impacted communities, and the state as a whole, have groups that need special consideration to fully integrate these communities and make fair housing choice a reality. In addition to protected classes under the Fair Housing Act, the AI specifically identifies homeless populations, colonias communities, migratory farm workers, persons with special needs, persons with HIV/AIDS, and the incidences of poverty in communities, as well as the barriers that exist to providing these populations with access to housing. The report identifies limitations on the availability of safe, quality, affordable housing, especially in high opportunity areas, as defined by future rules. The report also identifies challenges due to substandard housing with incomplete plumbing, overcrowding and cost burdens that limit fair housing choices for persons of limited means. Several impediments are identified that are consistent by region, as well as some that are localized into certain regions or only parts of a region. Below is a quick summary of the identified impediments and the action steps identified to help overcome the impediment. For a full list, please review Section 8 of this AI. HMDA research shows that, in general, minorities tend to receive fewer loans, or receive less favorable terms, as a percentage of the population than non-hispanic whites. The analysis does not look at all factors that go into a loan, such as credit history, but it does try to compare similar levels of income. Several action steps were identified to assist in creating better access, including seeking additional education for mortgage professionals, TDHCA adding into its First time Homebuyer Programs affirmatively furthering fair housing training, and additional monitoring of that program to determine if the racial percentages correspond to the racial makeup of the market place. The HMDA research, however, does not address the impact of federal mandates on lending institutions that led to risky, sub-prime loans that placed persons in homes 7 SIRVA, Inc., Jan March 2011 State of Texas Analysis to Impediments to Fair Housing Page 14 of 196

15 they could not afford and eventually helped precipitate the collapse of the housing industry and the impact that has had on financing and construction of affordable housing. In addition, while not a clear representative sample, allegations of discriminatory acts were identified in the focus groups regarding the rental and sale markets. National research by civil rights advocates has indicated that, in some communities, there is a practice of steering persons of color into communities populated by persons of the same race. No surveys or testing were conducted in Texas specifically for this AI, but based on racial patterns and the prevalence found in other testing, Texas proposes to look at testing and enforcement provisions coordinated and paid for by TDHCA. In addition, the AI proposes that TDHCA and TDRA will request more training for real estate related professionals about affirmatively furthering fair housing in real estate transactions. TDHCA proposes to monitor its programs for compliance and consistency, and to place more emphasis on subrecipients in developing affirmative marketing plans. TDHCA proposes to work with the Texas Workforce Commission, which is the Fair Housing enforcement agency in Texas, to better educate the public on Fair Housing issues and how to report claims of violations. The state intends to work collectively to build coalitions and promote programs that provide a greater awareness of the Fair Housing Act. The report identifies the Not In My Back Yard ( NIMBY ) syndrome as a potential impediment to locating multi-family housing in high opportunity areas. Through coalitions and education, the actions steps identify ways to lessen the impact of NIMBYism including education of leadership in communities. In the public sector, the AI identifies some areas where public policy, either intentionally or unintentionally, may have promoted racial segregation. The section identifies 20 action steps that involve the review of public policies, commitments to rebuild, and how to make forwardlooking funding decisions after careful review of current on-the-ground situations. As was previously stated, not much in the way of testing or enforcement of Fair Housing issues has gone on in Texas by any level of government. The AI proposes to increase testing and enforcement where appropriate. Further, it proposes that the state and local governments will work to increase awareness of the Fair Housing claim process through additional literature or placement of a contact about Fair Housing issues on its website. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 15 of 196

16 Another area called for in AI s and represented in this document is an examination of local land use or zoning requirements. While not every jurisdiction s ordinances have been reviewed, in Section 4 we walk through some of the more common issues that may limit fair housing choice and identify action steps to encourage a review of local ordinances that may impact those choices. An ongoing concern directly related to the impacted areas is the ability of the federal, state and local governments to re-house persons after a disaster. While this impediment cuts across the board, it can be especially hard on persons with special needs or those living in poverty. The action steps encourage a more complete review including duplication of benefits issues to assist people in relocating quickly. Potential barriers to those with special needs are included in this report. With the population aging, this could become a greater concern. The action steps include proposals for removing barriers, locating sites and removing public barriers and altering private attitudes to locating special needs housing in communities where it has the greatest access. The lack of resources available to: increase housing, provide more access, and despite Texas leading in job growth, create jobs is also identified as an impediment in this AI. Using these limited resources more efficiently and targeting the resources should be done. In addition, developing a comprehensive Section 3 plan could provide more jobs and allow for movement of low-income persons. Texas has dedicated significant resources to working with the issue of Colonias in Texas. However, there is still work which needs to be done. The AI identifies potential impediments of directing people due to national origin and recommends looking at creating a greater awareness of the issues in the areas that remain under served or un-served. As a result of looking at storm damage, the state is aware of insurance patterns and the high cost of insurance to homeowners in the most impacted areas. The state plans to include training in its homebuyer programs that will counsel applicants on the importance of shopping for and maintaining insurance. With this AI, the state is moving to improve the information gathered and analyzed in the pursuit of affirmatively furthering fair housing in conjunction with current national trends in drafting of March 2011 State of Texas Analysis to Impediments to Fair Housing Page 16 of 196

17 AIs being discussed by HUD. The state and local communities plan for increased training and looking at information in a manner that encourages informed decisions going forward. In conclusion, the state and the local jurisdictions have identified major steps to providing a path that will help bring greater awareness about the Fair Housing Act to the public in decision making processes. Next Steps. The draft Phase I AI will be submitted first to the public for comment and then to the TDHCA Board for approval prior to submission to HUD. Once the Phase I AI is accepted by HUD, the State will begin the process of working with the Councils of Government to develop regional methods of distribution to support allocation and release of remaining round 2 funding. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 17 of 196

18 SECTION 2. BACKGROUND OF REGION. Demographics. Population Growth. Texas is experiencing incredible growth, adding approximately 3,111,480 people between 2002 and In fact, Texas has grown much faster than the national average, a difference of 14.6percent to 8.3percent respectively. 9 Accompanying this growth in population, traditional population characteristics are also changing. The Non Hispanic White population is anticipated to decrease in both raw numbers and as a percentage of the population by Depending on the selected migration formula, the percentage of the population that is black is expected to decrease in the future when looking at the Zero Net Migration formula remaining relatively flat in raw numbers. 11 If a different model is used, the percentages will still decline based on other groups projected growth, but the raw number of persons grows. The other classification remains relatively stable under the Zero Net Formula but more than doubles in population under the 0.5 formula. Under any model, both as a raw number and as a percentage of the population, the Hispanic group is expected to grow dramatically to where Hispanics will be the largest classification in 2040 representing approximately 52percent of the population under the Net Migration of 0.5percent formula. 12 Year Non Hispanic White Table 2-1 Projected Population State of Texas Black Hispanic Other Total ,074,716 2, ,669, ,785 20,581,820 Year Non Hispanic White scenario Non Hispanic White 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other Scenari o 0ther 0.5 Total Total ,292,858 11,494,673 2,604,162 2,730,659 7,986,640 8,999, , ,348 22,659,748 24,178, ,320,857 11,735,043 2,727,365 3,004,173 9,220,971 11,742, ,786 1,256,342 24,097,979 27,738, ,559,190 11,382,992 2,697,888 3,282,413 11,408,456 18,391, ,047 1,854,592 25,561,581 35,012,330 9 U.S. Census Bureau, 2002, 2008 Community Survey 10 Table 2.7 Population for the State of Texas and Councils of Government Regions in Texas in 200 and Projections to 2040 Assuming Alternative Population s, retrieved at 11 Ibid. 12 Ibid. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 18 of 196

19 Additional information regarding population sizes, including growth by race, will be covered in each of the sections that deal with specific communities or areas. In addition, the materials contained in Appendix D will provide more direct population figures for all 63 impacted counties and selected communities. The information in Appendix D will analyze the growth factor in population and race from 1990 to A subsequent report will provide the additional data from the 2010 U.S. Census that is unavailable at the time of this report. It is anticipated that 2010 information should be ready not later than March of Age. Included in the changing demographics is the aging of the population in Texas. Under all migration scenarios, the median age of the population will increase across the board as will the corresponding percentage of the population that is 65 and older in all race categories. This aging of the population has significant impacts on the availability of housing and resources that can accommodate special needs persons. Table 2.2 shows the population s anticipated aging according to the demographers located at the University of Texas at San Antonio. This table demonstrates that the percentage of the population who is over sixty five will increase in raw numbers within the age category and as a percentage of the population as a whole. 13 The 2040 data assumes rates of net migration equal to one-half of (.5 ) and is neither the least nor the most conservative estimate by the demographers. Age Group Non Hispanic White 2000 Non Hispanic White 2040 Table 2.2 Age by Age Group and Race/Ethnicity Black Hispanic Black 2000 Hispanic 2040 Other 2000 Other 2040 < Median Total 2000 Total Table 2.14 Percentage of population for the State of Texas and Council of Government Regions in Texas by Age and Race/Ethnicity of the Population and Median Age by Race/Ethnicity in 2000 and Projections to 2040 Assuming Alternative Projection s. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 19 of 196

20 Aging populations place different pressures on infrastructure and housing. One indicator of increased need is that the 2005 to 2007 American Community Survey found that 45.3 percent of the population 65 years and older had a disability during this time period. 14 Additionally, the Aging Texas Well Indicators Survey Report for 2009 reported that 14 percent of Texans age 60 and older reported that their homes doorways, hallways, kitchen, bathrooms, and closets needed substantial modification to make it easier to get around inside. Thirty-eight percent of older Texans did not know where to go for help in making these types of improvements. 15 The same survey found that among older Texans more than 80 percent own their own homes and 60 percent of those do not make mortgage payments. 16 The survey conducted in 2008 found that 20 percent of seniors rent with only 4 percent having some form of rent-free situation. The survey also points out that 56 percent of seniors in 2008 spent more than one-third of their income for total household expenses including 21 percent that spent more than half of their income for household related expenses. 17 Poverty and Income. According to census data updated by HISTA projections, approximately 3,585,250 people in Texas lived below the poverty line in According to the American Community Survey for 2006 to 2008, Texas had a poverty rate of 16.3 percent during this time period compared to the national poverty rate of 13.2 percent. Conditions are particularly acute in the colonias, unincorporated areas along the Texas-Mexico border lacking infrastructure and decent housing. Minority populations continue to be overrepresented in the Texas population under the poverty level. According to the 2006 to 2008 American Community Survey, during that three-year period, the percent of Black or African American and Some Other Race populations under the poverty level were 23.9 to percent, respectively. Other recorded races show a much lower poverty rate ranging from percent to 17.8 percent. Similarly, the Hispanic population in poverty was 16.2 percent higher than white alone U.S. Census Bureau, American Community Survey. (n.d.) Subject Tables. Retrieved from 15 Aging Texas Well, Indicators Survey Overview Report 2009, Texas Department of Aging and Disability Services Center for Policy and Innovation, April 2009, at page Ibid at page Ibid. 18 U.S. Census Bureau, American Community Survey. (n.d.). Subject tables. Retrieved from March 2011 State of Texas Analysis to Impediments to Fair Housing Page 20 of 196

21 Poverty is an issue in Texas across all race groups as Table 2.3 indicates. The lowest percentage below the poverty rate is among Asians with percent and the highest is among Hispanic or Latino origin with just under one-in-four below the poverty level. Table 2.3 Annual Poverty Estimates by Race and Latino Origin Texas, 2006 to 2008 Total Below poverty level One race 22,798,691 3,721, % White 16,637,808 2,352, % Black or African American 2,597, , % American Indian and Alaska Native 114,474 20, % Asian 796,800 91, % Native Hawaiian and Other Pacific Islander 17,365 2, % Some other race 2,634, , % Two or more races 433,501 70, % Percent below poverty level Hispanic or Latino origin (of any race) 8,397,171 2,086, % White alone, not Hispanic or Latino 11,113, , % Source: 2006 to 2008 American Community Survey 3-Year Estimates Many families who rely on low-wage occupations for a living find it difficult to cover all essential expenses. According to a study by the Center for Public Policy Priorities, a significant proportion of families throughout the state struggle paycheck-to-paycheck to make ends meet. The study examined a typical family s fundamental expenses, such as housing, food, child care, medical costs, transportation, taxes, etc., and compared the total bill to typical wages earned in the 27 Texas Metropolitan Statistical Areas. The study asserts that a family of four in Texas requires a household hourly income of $18 to $22 per hour (depending on the metro area in which the family lives) to simply meet its most basic needs. In a majority of Texas metro areas, however, half of the total employment is in occupations with a median wage under $10 per hour. 19 In addition, expected economic growth will not necessarily lift the lowest-income groups. The Texas Comptroller s Biennial Revenue Estimate predicts that the fastest growing sector of the state economy for will be the professional and business services. This sector was also 19 Center for Public Policy Priorities. (2002, September 1). Making it: what it really takes to live in Texas. Retrieved from March 2011 State of Texas Analysis to Impediments to Fair Housing Page 21 of 196

22 the fastest growing in , and it requires specialized education and skills. 20 While this growth may buoy the state economy, it may not raise many low-income families, who may not have the necessary education or training, from their current positions. Homeless Persons. The National Alliance to End Homelessness estimates that for Texas in 2007, there were approximately 39,761 homeless people using a point-in-time estimate in January. The number of homeless in 2007 decreased from 2005 by 8.87 percent. 21 However, estimates of homeless populations vary widely; the migratory nature of the homeless population, the stigma associated with homelessness, and the fact that many homeless individuals lack basic documentation all contribute to the difficulty of making an accurate count. Most homeless counts are point in time estimates, which do not capture the revolving-door phenomenon of persons moving in and out of shelters over time. The Texas Interagency Council for the Homeless estimates that approximately 200,000 people in Texas, or about 1 percent of the population, are homeless, which is higher than the National Alliances to End Homelessness point in time estimate. 22 Furthermore, the homeless population can be classified into three categories: literally homeless, which describes those who have no permanent residence and stay in shelters or public places; marginally homeless, which includes those who live temporarily with other people and have no prospects for housing; and people at risk of homelessness. People at risk of homelessness generally have incomes below the poverty level, rely on utility and rental assistance, and may be unable to absorb unexpected events such as the loss of a job or serious illness. The homeless population is not homogenous: there are homeless families with children, homeless youth, homeless minorities, homeless in rural areas, homeless victims of domestic violence, homeless persons with mental illness and disabilities, elderly persons, homeless veterans, and chronically homeless people. Though these subpopulations may have different characteristics, the two main trends significant in the rise of homelessness can be connected to 20 Texas Comptroller of Public Accounts. (2009, January). Biennial revenue estimate: Retrieved from 21 National Alliance to End Homelessness, Homeless Research Institute. (2009, January). Homeless counts: Changes in homelessness from 2005 to Retrieved from 22 Texas Interagency Council for the Homeless. (2000). Key facts. Retrieved from March 2011 State of Texas Analysis to Impediments to Fair Housing Page 22 of 196

23 the poverty (characterized by the decline in employment opportunities and public assistance programs) and a shortage of affordable housing. 23 Table 2-4 breaks out the homeless population in Texas by the Comptroller s standard regions. Note that the issue is present in every region in both Rural and Urban areas. Table 2-4 Homeless, group quarters population by region Texas, 2010 Region Rural Urban Total ,986 2, ,761 2, ,937 13, ,230 2, , ,340 18, ,015 8, ,639 2, ,497 7, ,631 3, ,083 2, ,084 1, ,056 2,071 State Total 6,449 61,249 67,698 Source: Nielsen Claritas, Ribbon Demographics, Persons with Disabilities. In the past, public-program spending for long-term services and supports for persons with disabilities in Texas was allocated in large part to institutional facilities such as nursing homes. However, over the last two decades, with the advent of Medicaid waivers, home- and community-based service alternatives have become an increasingly significant option and choice, as witnessed through recent federal and state legislation. With these services and supports provided in a residential setting, Texas has witnessed a large drop in its institutionalized population, from over 12,000 in 1977 to 4,789 in A significant number of persons with disabilities face extreme housing needs. Research conducted by the national Housing Task Force of the Consortium for Citizens with Disabilities found that as many as 2.4 million households with disabilities have worst-case housing needs, defined by HUD as unassisted renters with income below 50 percent of their area s median 23 National Coalition for the Homeless. (2008, June). Why are people homeless? NCH Fact Sheet #1. Retrieved from 24 Research and Training Center on Community Living, (2009) Residential Services for Persons with Developmental Disabilities: Status and Trends Through 2008: Profiles of Trends in State Residential Services by State, Retrieved from March 2011 State of Texas Analysis to Impediments to Fair Housing Page 23 of 196

24 income who pay more than half of their income for housing or live in severely substandard housing, or both. 25 This is in line with the finding that the incidence of poverty is much higher for persons ages 25 to 64 with a severe disability (27%) or non-severe disability (12%) as compared to no disability (9%). 26 In fact, HUD s Office of Policy Development and Research reported that almost two-thirds of unassisted very low-income renter households with disabilities have worst-case housing needs. 27 Texas has a slightly lower proportion of persons with disabilities compared to the national average of 19.3 percent of the total population. Of those Texans with disabilities, approximately 82 percent live in urban areas. Persons with disabilities are more likely to be living in urban areas due to the ability to access transportation and the close proximity to health-related and other services and supports. 28 Table 2-5 provides estimates of persons with disabilities in Texas by the Comptroller s standard regions. Public Housing Residents. Table 2-5 Persons with disabilities Texas, 2000 Region Rural Urban Total 1 58,338 80, , ,455 46, , , , , , , , ,970 74, , , , , , , , , , , , , , ,085 87, , , , , ,372 57,428 91, , , ,000 State Total 633,509 2,972,011 3,605,520 Source: Census 2000, urban defined by designation as an MSA. Beginning in the 1930s, local public housing authorities (PHA) built and managed properties for low-income residents primarily through funding provided by the U.S. Department of Housing and Community Affairs (HUD). Most of the public housing developments were completed in 25 Technical Assistance Collaborative Inc., Housing Task Force of the Consortium for Citizens with Disabilities, (2008) The Hidden Housing Crisis: Worst Case Housing Needs Among Adults With Disabilities, 26 National Council on Disability, (January 2010) The State of Housing in America in the 21st Century: A Disability Perspective 27 US Department of Housing and Urban Development, Office of Policy Development and Research, (May 2010) Worst Case Housing Needs 2007: A Report to Congress 28 Housing & Health Services Coordination Council, Testimony of Theresa Cruz, Director of the State Office of Rural Health, Texas Department of Rural Affairs: HHSCC Public Forums, 8 February March 2011 State of Texas Analysis to Impediments to Fair Housing Page 24 of 196

25 the 1970s. By 1993, HUD created HOPE VI to replace deteriorating public housing stock with mixed-income developments. Nationwide in the mid-1990s, 61 percent of public housing is located in the central city, 19 percent in the suburbs, and 20 percent in non-metropolitan areas. The median length of stay in public housing is 4.7 years and families with children stay a median of 3.2 years. 29 A study entitled Federal Programs for Addressing Low-Income Housing Needs: A Policy Primer (2002) found that a majority of public housing residents were employed or searching for employment. However, most residents worked part-time, low-paying jobs offering no fringe benefits. 30 Public housing residents may have educational barriers or transportation barriers that prevent them from transitioning to market-rate housing. 31 In Texas, according to HUD, there are 63,416 public housing units as of Persons Living with HIV/AIDS. Table 2-6 PHA Units Texas, 2010 Region Rural Urban PHA Units ,095 1, ,864 2,056 3, ,998 5,313 10, ,731 3, ,606 3, , , , , , , , , , , ,548 3,867 7, , ,035 6,035 State Total 36,740 26,676 63,416 Source: US Department of Housing and Urban Development. According to the Texas Department of State Health Services 2010 Texas Integrated Epidemiologic Profile for HIV/AIDS Prevention and Services Planning, HIV/AIDS cases are not evenly distributed across Texas. In 2008, Persons Living with HIV/AIDS (PLWHA) were concentrated in metropolitan areas, with over half residing in the Houston and Dallas 29 Turner, M. A. & Kingsley, G. T. (2008, December). Federal programs for addressing low-income housing needs: A policy primer. The Urban Institute. Retrieved from 30 Martinez, J. M. (2002, September). The employment experiences of public housing residents: Findings from the jobs-plus baseline survey. Retrieved from 31 Turner, M. A. & Kingsley, G. T. (2008, December). Federal programs for addressing low-income housing needs: A policy primer. The Urban Institute. Retrieved from March 2011 State of Texas Analysis to Impediments to Fair Housing Page 25 of 196

26 metropolitan areas. In contrast, South and West Texas had the lowest rates of PLWHA in The highest rates of living cases were in the age groups. In looking at how client services funds were allocated by service category, the Texas Statewide Coordinate Statement of Need (SCSN) found that housing was the second largest allocation category, with $14,765,131 provided to PLWHA in However, SCSN also reported affordable housing as one of the two most frequent gaps in services identified by clients in six of the seven HIV Service Delivery Areas (HSDAs) assessed in Texas. For certain PLWHA, specifically for single women and single men without children, the availability of Ryan White & Housing Opportunities for Persons with AIDS (HOPWA) funded housing is a particular problem. Also, many HIV positive women with children who have had access to stable housing through Ryan White funds will lose this benefit once their children turn 18 and leave the home. Finally, through informant interviews, the SCSN found that reimbursement rates for housing are below fair market rates, which place clients into housing in high crime/low income areas which may lead to substance abuse issues, crime, and other factors that are known to affect access and maintenance in care. Over 95 percent of PLWHA live in urban areas. The reason behind such a large urban concentration, as found in the SCSN, is a lack of available health care choices in non-urban service areas and the effect on access to care, especially for specialty services and the availability of affordable housing. 34 See Table 2-7 for more details on persons living with HIV/AIDS in Texas. 32 Texas Department of State Health Services, (April 2010) 2010 Texas Integrated Epidemiologic Profile for HIV/AIDS Prevention and Services Planning, 33 Texas Department of State Health Services (June 2008), Texas Statewide Coordinated Statement of Need, 34 Texas Department of State Health Services, (June 2008), Texas Statewide Coordinated Statement of Need, March 2011 State of Texas Analysis to Impediments to Fair Housing Page 26 of 196

27 Table 2-7 Persons with HIV/AIDS Texas, 2008 Region Rural Urban Total , ,333 19, , , ,707 20, ,293 4, , ,382 4, ,685 1, ,562 1,569 State Total 2,761 56,556 59,317 Source: Texas Department of State Health Services, 2010 Texas Integrated Epidemiologic Profile for HIV/AIDS Prevention and Services Planning Note: Figures do not include those unaware of their HIV infection of those who tested HIV positive solely through an anonymous HIV test. Cases diagnosed at the Texas Department of Criminal Justice System are not attributed to a geographic area. Colonia Residents. Major issues affecting colonias include high rates of unemployment, extremely low-incomes, lack of sufficient infrastructure for water and sewer service, higher rates of certain diseases, lack of educational resources, substandard housing, and use of contract for deed. The latter two issues are directly related to housing. Housing in colonias is often constructed by residents using only available materials; professional builders are not often used. 35 According to 2000 Census data, colonias have a 75 percent homeownership rate. Despite this rate, colonia homes are inadequate: 4.9 percent of colonia dwellings lack kitchen facilities and 5.3 percent lack plumbing facilities. It is estimated that 50 percent of colonia residents lack basic water and sewage systems: 51 percent use septic tanks, 36 percent use cesspools, 7 percent use outhouses, and 6 percent use other wastewater systems. 36 Furthermore, properties in colonias are often purchased with contracts for deed, which are sellerfinanced transactions that do not transfer the title and ownership of the property to the buyer until the purchase price is paid in full. Contracts for deeds are often used in colonias because many residents do not have a credit history or qualify for a loan from a financial institution. Because 35 Federal Reserve Bank of Dallas. (n.d.). Texas colonias. Retrieved from 36 Moncada, N. (2001). A Colonias Primer. A briefing presented to the US Department of Housing and Urban Development. Retrieved from March 2011 State of Texas Analysis to Impediments to Fair Housing Page 27 of 196

28 of a lack of other options, contracts for deed often have high interest rates and are subject to abusive financial practices. 37 Colonia residents have several needs that include increased affordable housing opportunities, such as down payment assistance and low-interest-rate loans, homeowner education, construction education and assistance, owner-occupied home repair, access to adequate infrastructure, and the conversion of remaining contracts for deed to conventional mortgages. According to the Office of Attorney General s colonia estimates accessed in 2010, the number of colonia residents for Texas is 418,406. Table 2-8 Colonia Residents Texas, estimated 2010 Region Rural Urban Total 9 2,212-2, ,634 13,808 24, , , , ,130-5, ,239 77,169 80,408 State Total 122, , ,406 Source: Texas Office of the Attorney General, Border Colonia Geographic Database. Migrant Seasonal Farmworkers. Texas leads the nation in the quantity and size of farms and ranches with 247,500 properties covering million acres. The economic impact of the food and fiber sector totals more than $100 billion; cash receipts from the agriculture and ranching industries total $19.8 billion. 38 One of every seven working Texans (14%) is in an agriculture-related job, and many employed in this sector are migrant and seasonal farmworkers. Migrant farmworkers have a particularly difficult time finding available, affordable housing because of extremely low and sporadic incomes and the fact that they will reside in a given location only a short time. Many of the small, rural communities in which migrant workers may seek employment do not have the rental units available for the seasonal influx. While TDHCAlicensed facilities are inspected annually and are required to meet health and safety standards, 37 Federal Reserve Bank of Dallas. (n.d.). Texas colonias. Retrieved from 38 Texas Department of Agriculture, Texas Ag Stats, Retrieved from: March 2011 State of Texas Analysis to Impediments to Fair Housing Page 28 of 196

29 substandard conditions and overcrowding are believed to be widespread in other migrant labor housing situations. In addition, migrant workers may not be able to afford security deposits, pass credit checks, or commit to long-term leases. 39 Table 2-9 Migrant Seasonal Farmworker Population Estimates Texas, 2000 Region Rural Urban Total 1 71,055 9,407 80, , , ,308 11,370 14, ,912 1,518 10, , , ,463 6,133 9, ,418 4, ,970 1,088 6, ,929 8,028 18, ,811 11,098 21, ,022 87, , ,971 4,028 36, ,201 4,745 10,946 State Total 211, , ,414 Source: MSFW Enumeration Profiles Study TX, Larson, Alice, Housing Analysis. Affordable Housing Need. Texas has a significant need for affordable housing. The Texas Department of Housing and Community Affairs estimates in it Legislative Appropriation Request that it meets less than 1 percent of the total affordable housing need. 40 This does not take into account the amount of housing directly funded by entitlement communities, but does indicate the amount of need in the state. When analyzing local housing markets and developing strategies for meeting housing problems, HUD suggests the consideration of several factors. The factors include how much a household spends on housing costs (also called the Housing Burden), the physical condition of the housing and whether or not the household is overcrowded. Table 2-10 reveals the number and percentage of households with at least one housing need by income category and household 39 Texas Department of Housing & Community Affairs, (September 2006), Migrant Labor Housing Facilities in Texas: A Report on the Quantity, Availability, Need, and Quality of Migrant Labor Housing in the State 40 TDHCA legislative Appropriations Request for the biennium March 2011 State of Texas Analysis to Impediments to Fair Housing Page 29 of 196

30 More Than 95% AMFI 1-95% AMFI 51-80% AMFI 31-50% AMFI 0-30% AMFI type. The information that follows also provides more guidance as to the typical household issues that are part of this table. 41 Table 2-10 Households with One or More Housing Needs - Texas, 2009 Renter Households Owner Households Percent Percent with At Least Total with At At Least Total At Least One One Need Households Least One One Need Households Need Need Total Households Elderly Households 67, , % 117, , % 184,941 Small Related Households 186, , % 88, , % 275,385 Large Related Households 73,461 79, % 45,537 51, % 118,998 Other Households 153, , % 45,667 68, % 199,110 Total Households 481, , % 296, , % 778,434 Elderly Households 42,065 70, % 72, , % 115,052 Small Related Households 153, , % 91, , % 245,293 Large Related Households 66,852 77, % 62, , % 129,384 Other Households 117, , % 28,305 79, % 145,709 Total Households 379, , % 255, , % 635,437 Elderly Households 22,924 54, % 47, , % 70,685 Small Related Households 112, , % 140, , % 253,313 Large Related Households 66,685 94, % 94, , % 161,622 Other Households 91, , % 41,734 92, % 132,754 Total Households 293, , % 325, , % 618,373 Elderly Households 4,184 15, % 11,464 91, % 15,648 Small Related Households 21, ,448 2% 46, , % 67,631 Large Related Households 16,263 28, % 29,629 62, % 45,892 Other Households 13, , % 16,297 47, % 29,848 Total Households 55, , % 103, , % 159,019 Elderly Households 9,394 62, % 27, , % 36,601 Small Related Households 50, , % 153,049 2,029, % 203,480 Large Related Households 40,814 85, % 106, , % 147,799 Other Households 19, , % 40, , % 60,125 Total Households 120, , % 327,748 3,376, % 448, Many materials regarding the Housing Analysis is taken with permission from the 2010 State of Texas Low Income Housing Plan and Annual Report, prepared by TDHCA. Communities are encouraged to look for changes in data as this report is published not later than March 18 of each year in assisting in their Fair Housing reviews and plans March 2011 State of Texas Analysis to Impediments to Fair Housing Page 30 of 196

31 Total Households At Least One Need Renter Households Total Households Percent with At Least One Need At Least One Need Owner Households Total Households Percent with At Least One Need Total Households Elderly Households 146, , % 276,435 1,283, % 422,927 Small Related Households 524,504 1,296, % 520,598 2,925, % 1,045,101 Large Related Households 264, , % 339, , % 603,695 Other Households 395,037 1,091, % 172, , % 567,546 Total Households 1,330,106 3,066, % 1,309,162 5,656, % 2,639,268 Source: CHAS 2000 with projections based on HISTA data. Physical Inadequacy (Lack of Kitchen and Plumbing Facilities). The measure of physical inadequacy available from the CHAS database tabulation is the number of units lacking complete kitchen and/or plumbing facilities. While this is not a complete measure of physical inadequacy, the lack of plumbing and/or kitchen facilities can serve as a strong indication of one type of housing inadequacy. Figure 2-1 demonstrates that among the physically inadequate housing units, 31 percent are occupied by extremely low-income households. 42 Figure 2-1 Number of Units Lacking Kitchen and/or Plumbing by Affordability Category Texas, 2009 Income Group Units Percent 0% to 30% 29,690 31% 31% to 50% 18,293 19% 51% to 80% 18,792 20% 80% to 95% 4,838 5% Over 95% 22,778 24% Total 94,391 Source: CHAS Database with projections based on HISTA data The state defines standard condition of housing as properties that meet the federal Housing Quality Standards, or the state Colonia Housing Standards, as applicable. Substandard condition but suitable for rehabilitation refers to properties that do not meet the above standards but are not sufficiently deteriorated to justify demolition or replacement. These definitions refer to the condition of properties prior to the receipt of assistance. 42 Ibid March 2011 State of Texas Analysis to Impediments to Fair Housing Page 31 of 196

32 Percent of Owner Households Percent of Renter Households Figure 2-2 shows the distribution of this problem by income group. Households in the lowest income group earning 30 percent HAMFI or less have the highest incidence of physically inadequate rental housing. Figure 2-2 Renter Households with Substandard Housing by Percent Texas, % 2.7% 2.5% 2.0% 2.0% 1.5% 1.5% 1.0% 1.0% 1.0% 0.5% % 0% to 30% 31% to 50% 51% to 80% 81% to 95% Over 95% Income Categories Source: CHAS Database with projections based on HISTA data. Following the same trend as renter households, owner households in the lowest-income category have more incidents of substandard housing. Approximately three percent of owner households earning 30 percent HAMFI or less have substandard housing. Figure 2-3 Owner Households with Substandard Housing Percent Texas, % 3.0% 3.0% 2.5% 2.0% 1.8% 1.5% 1.0% 0.5% 1.1% 0.6% 0.4% % 0% to 30% 31% to 50% 51% to 80% 81% to 95% Income Categories Source: CHAS Database with projections based on HISTA data Over 95% Extreme Housing Cost Burden. An excess cost burden is identified when a household pays more than 30 percent of its gross income for housing costs. When so much is spent on housing, other basic household needs may suffer. As Figure 2-4 shows, a majority of renter households in the lowest two income categories, totaling more than 621,200 households, is burdened by paying an excess portion of income March 2011 State of Texas Analysis to Impediments to Fair Housing Page 32 of 196

33 Percent of Owner Households Percent of Renter Households toward housing. This is much greater than in the highest income category, above 95 percent HAMFI, where only 2.2 percent of households, or 22,005 households, experience the problem. 43 Figure 2-4 Renter Households with Extreme Housing Cost Burden (>30% of Income) by Percent Texas, % 55.2% 53.7% 5% 4% 3% 25.1% 2% 1% % 0% to 30% 31% to 50% 51% to 80% 8.3% 81% to 95% Income Categories Source: CHAS Database with projections based on HISTA data 2.2% Over 95% As shown in figure 2-5, excess housing cost burden affects 59.3 percent of owner households in the lowest income category. This figure, representing a majority, is much higher than the 5.7 percent of households affected in the highest income category. The graph illustrates the direct correlation between an owner household s income category and an owner household s likelihood of experiencing this problem. Figure 2-5 Owner Households with Excess Housing Cost Burden (>30% of Income) by Percent Texas % 6% 59.3% 5% 4% 41.3% 3% 2% 27.9% 19.3% 1% 5.7% % 0% to 30% 31% to 50% 51% to 80% 81% to 95% Over 95% Income Categories Source: CHAS Database with projections based on HISTA data Figure 2-6 shows the total number and percentage of households with excess housing cost burden by income group. 43 Ibid March 2011 State of Texas Analysis to Impediments to Fair Housing Page 33 of 196

34 Percent of Renter Households Figure 2-6 Excess housing Cost Burden by Income Group Texas, % to 95% AMFI, 93,253, 5% Over 95% AMFI, 214,784, 12% 0% to 30% AMFI, 597,941, 34% 51% to 80% AMFI, 399,733, 23% 31% to 50% AMFI, 465,149, 26% Source: CHAS Database with projections based on HISTA data Overcrowding. Overcrowded housing conditions occur when a residence accommodates more than one person per each room in the dwelling. Overcrowding may indicate a general lack of affordable housing in a community where households have been forced to share space, either because other housing units are not available or because the units available are too expensive. Lower income renter households experience overcrowded conditions more frequently than higher income households. Almost 18 percent of renter households in the extremely low income category and 19.9 percent of renter households in the low income category are afflicted by overcrowding. 44 Figure 2-7 Renter Households with Incidence of Overcrowding by Percent Texas, % 2% 17.8% 19.9% 16.6% 15.0% 12.4% 1% 8.9% 5.0% % 0% to 30% 31% to 50% 51% to 80% 81% to 95% Over 95% Income Category Source: CHAS Database with projections based on HISTA data 44 Ibid March 2011 State of Texas Analysis to Impediments to Fair Housing Page 34 of 196

35 Percent of Owner Households Lower income owner households also experience overcrowded conditions more frequently than higher income owner households. More than 21 percent of owner households earning less than 50 percent HAMFI live in overcrowded conditions compared to 11.4 percent of owner households over 80 percent HAMFI. Figure 2-8 Owner Households with Incidence of Overcrowding by percent 12.0% 11.1% 10.7% 1% 8.0% 9.2% 7.8% 6.0% 4.0% 3.6% 2.0% % 0% to 30% 31% to 50% 51% to 80% 81% to 95% Income Category Source: CHAS Database with projections based on HISTA data Over 95% Figure 2-9 shows the total incidence of overcrowded households by income group. Figure 2-9 Overcrowded Households by Income Group Texas, 2009 Over 95%, 210,500, 27% 0% to 30%, 151,051, 19% 81% to 95%, 60,765, 8% 31% to 50%, 152,317, 20% 51% to 80%, 200,208, 26% Source: CHAS Database with projections based on HISTA data March 2011 State of Texas Analysis to Impediments to Fair Housing Page 35 of 196

36 SECTION 3. EVALUATION OF LARGE URBAN CENTERS AND SURROUNDING AREAS--HOUSTON AND GALVESTON. The area defined by the Houston Galveston Area Council ( H-GAC ) is large and extremely diverse. At the heart of it is one of the largest cities in the country, bounded on the south by the world s largest petrochemical complex and the Gulf of Mexico, site of some of the most devastating natural disasters ever to hit the United States. Outlying areas in H-GAC are a variety of smaller towns, including some very rural areas, and a wide array of progressively larger cities, including Galveston. This section is not intended to provide a complete AI for each community in the H-GAC Region. In fact, some communities in the H-GAC region may find that they have more in common with the Golden Triangle Section in terms of availability of resources, staff, and recent experience with growth. Others may find that the small community section, where the focus is on cities of less than 2,500, provides an analysis of conditions more like those they are facing and find that they provide more useful guidance on ways to overcome Fair Housing impediments. This section will target issues that are present in the communities of Houston and surrounding areas like Galveston. These cities are grouped together because of the urban setting and their relative proximity and use of many combined or shared resources. Houston with a population of 2,024, has different resources, staff, taxing structures and challenges than a city like Galveston with a population of 52, or La Porte with a population of 36, and especially a small community like Shoreacres with a population of 1, Even with size differences and clear differences in zoning and enforcement, many of these communities rely on a very similar community of professionals in the real estate and mortgage industries and on similar and often shared media outlets. Both Houston and Galveston experience many of the same issues common to urban areas. Many cities in the region have commuters that work in Houston but live a suburban or rural setting in distinctly separate 45 U.S. Census Bureau American FactFinder, Fact Sheet Houston city, Texas Data Profile Highlights retrieved at 46 U.S. Census Bureau American FactFinder, Fact Sheet Galveston city, Texas Data Profile Highlights retrieved at 47 U.S. Census Bureau American FactFinder, Fact Sheet La Porte city, Texas Data Profile Highlights retrieved at 48 Texas State Directory 2009, 52 nd Edition, Texas State Directory Press, Inc. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 36 of 196

37 communities. As the demographic data in Section 2 of this AI demonstrates, both urban and rural areas in H-GAC face many of the same challenges with homelessness, persons with aids, an aging society, poverty and a need for additional affordable housing. This section is designed to identify existing impediments to developing an integrated community meeting the goals of the Fair Housing Act. Historical Recap. The H-GAC area is large and diverse representing one of the largest urban areas in the United States, with Houston alone being the fourth most populous cities in the country. 49 The population diversity of the Houston Region 50 is such that the region has no racial or ethnic majority. 51 The region has more jobs than all of Colorado. 52 Living costs for the region are 21 percent below the average for major metropolitan areas. 53 From its earliest days, Houston has been a magnet for industry and individuals experiencing dramatic growth from the population of 34,772 in 1850 to more that 4.8 million people today. 54 The Port of Houston, one of four ports in the region, among us ports was first in import tonnage and second in export tonnage and second in total tonnage. 55 In addition, it was the 14 th largest port in the world for tonnage passing through the port. Despite the U.S. economy, Houston has continued to grow in diverse economic opportunities and it posted the fastest job growth among the major metropolitan centers. 56 Previously in the 1970 s Houston had a boom in the economy from speculative commercial and individual housing building that later had a tremendous negative impact. In the current economy, Houston s ability to readily accommodate increased demand for new homes allowed it to escape the national housing bubble and subsequent collapse. The apartment market in the region as of year-end 2007 had an occupancy rate of 87.4 percent with an inventory of 536,829 units in 2,751 complexes /2009 Houston Facts Discover the Houston Region, Greater Houston Partnership. 50 Report includes 10 counties, Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto, and Waller counties /2009 Houston Facts Discover the Houston Region 52 Ibid. 53 Ibid. 54 Ibid. 55 Ibid 56 Ibid. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 37 of 196

38 In 2005, Houston became a key figure in the disaster recovery efforts of Hurricane Katrina opening its community to nearly 400,000 people from other states that were left without homes by Katrina. Houston opened up its public facilities to the evacuees with 77.9 percent of the evacuees in Houston staying at least temporarily at the Astrodome, Reliant Center, or the George R. Brown Convention Center. 57 Of the approximately 150,000 Katrina evacuees that remained in Houston one year after the storm, 68.6 percent of those asked said they planned to remain in Houston. Even with the commitment made to the Katrina evacuees at the time of the storm, research has shown that the evacuees that remain behind are thought of by the overall population in a similar pattern to immigration in general. 58 The views were held by most Houstonians according to research by Dr. Jason Shelton. He said it was common even though many African Americans believed that racism was the reason why the Katrina situation became so dire in the first place. 59 However, his research found that even in the African American community, the outsiders from New Orleans were draining the city s resources and were responsible for increased violent crime. In sheltering Hurricane Katrina evacuees in Houston the limited affordable housing options available at the time resulted in some unintended concentrations of evacuees. There is a continuing need to provide housing choice options to those new Houstonians in to order to further fair housing. The state dedicated $60 million in federal disaster recovery funds to the City of Houston and Harris County to assist in the process of helping to transition Katrina evacuees into the community. 60 Houston identified some concentrations of Katrina residents that warranted spending funds to rehabilitate multi-family homes to provide a better community for these new Houstonians. 61 The Houston region is working together on many of its issues to help the economic and increasing livability for all of its residents. Hurricane Ike greatly impacted the region and it is still recovering from the damages inflicted by the hurricane. 57 Katrina Evacuees in Houston: One-year out, Division of Social Sciences, Rice University, Rick Wilson and Robert Stein 58 Study links immigration and evacuee fears, Houston Chronicle, 59 Katrina evacuees finding limits to our hospitality, Houston Chronicle, Jason E Shelton, 60 State of Texas Partial Action Plan for Hurricanes Katrina, Rita and Wilma 61 Amendment to State of Texas Partial Action Plan for Hurricanes Katrina. Rita and Wilma March 2011 State of Texas Analysis to Impediments to Fair Housing Page 38 of 196

39 Regional Demographic Recap. As one of the largest Urban Areas in the State, much of the information presented here will resemble the trends in the state demographic data presented in Section 2. As with the information presented in Section 2, the specific demographic data presented in Appendix D will provide many communities with a look at the current racial segregation overall in individual communities of populations of 10,000 or more. The demographic data presented here is for the purpose of looking at regional challenges and how the growth of one area may actually impact surrounding communities as people look to either relocate or look for more affordable housing, better schools, less commute time, more open space or the variety of other reasons that people relocate. Population. As with the state as a whole, Non Hispanic White and Black populations will decrease as a percentage of the population with Non Hispanic Whites actually decreasing in total population by 2040 under either scenario 62 while the Other increase in raw numbers and Hispanic populations increase and become the largest community by race. Year Non Hispanic White Table 3-1 Projected Population H-GAC Region Black Hispanic Other Total ,383, ,761 1,389, ,326 4,854,454 Year Non Hispanic White scenario Non Hispanic White 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,453,613 2,426, , ,584 1,682,614 1,981, , ,448 5,308,778 5,688, ,472,990 2,361, ,783 1,003,400 1,952,820 1,981, , ,448 5,653,676 5,688, ,284,711 2,122, ,262 1,067,490 2,428,908 4,490, , ,700 5,925,797 8,483, These projections assume the One-Half Migration (0.5). According to the State Demographer: this scenario has been prepared as an approximate average of the zero () and (1.0) scenarios. It assumes rates of net migration one-half of those of the 1990s. The reason for including this scenario is that many counties in the State are unlikely to continue to experience the overall levels of relative extensive growth of the 1990s. A scenario which projects rates of population growth that are approximately an average of the zero and the scenarios is one that suggest slower than but steady growth. 62 March 2011 State of Texas Analysis to Impediments to Fair Housing Page 39 of 196

40 Age. Table 3-2 shows the population s anticipated aging according to the demographers located at the University of Texas at San Antonio for the H-GAC Region. This table demonstrates that the percentage of the population who is over sixty five will increase in raw numbers within the age category and as a percentage of the population as a whole. 63 The 2040 data assumes rates of net migration equal to one-half of (.5 ) and is neither the least nor the most conservative estimate by the demographers. Age Group Non Hispanic White 2000 Non Hispanic White 2040 Table 3-2 Age by Age Group and Race/Ethnicity Black Hispanic Black 2000 Hispanic 2040 Other 2000 Other 2040 < , , Median Total 2000 Total 2040 When compared to the state as a whole, the H-GAC region estimates appears to age only slightly more than the state as a whole in median age. The aging of a population matters as it signals anticipated greater need to address special needs that an older population may have, as previously discussed in Section 2. Poverty and Income The table to the right depicts the number of families living below the poverty line in Region 6. Of the 165,313 families living below poverty, approximately 96.3 percent are living in urban areas, with the remaining 3.7 percent in rural areas. However, the Region 6 Poverty Figures, 2010 At or above poverty Below poverty Families Percent Families Percent Rural 40, % 6, % Urban 1,292, % 159, % Region 6 Total 1,332, % 165, % Source: Nielsen Claritas, Ribbon Demographics, Table 2.14 Percentage of population for the State of Texas and Council of Government Regions in Texas by Age and Race/Ethnicity of the Population and Median Age by Race/Ethnicity in 2000 and Projections to 2040 Assuming Alternative Projection s HGAC Region data March 2011 State of Texas Analysis to Impediments to Fair Housing Page 40 of 196

41 percentage of total rural families that are below poverty is slightly higher than the percentage of total urban families. This may be due to the region s rural counties lagging behind the Houston MSA in recent and expected job creation. 64 Region 6 Household Income Very Low Income (31%-50%), 11% The pie chart to the left depicts the income breakdown of the 1,691,811 households in the region. Approximately 40 percent of households are low income. There are 754,675 individuals living in poverty in the region, which makes up 13.6 percent of The H-GAC region has the second largest number of households in the state (second to Region 3 Dallas Fort Worth area) and the second largest number of households with income registered as low to extremely low for the state. Just under 60 percent of the region s households are at 80.1 percent income or higher. Table 3-3 compares the Region 6 which covers the H-GAC Region to the state total. Extremely Low Income (0-30%), 12% Higher Income (over 95%), 52% Low Income the regional population. According to the Texas (51%-80%), 17% Comptroller s Texas In Focus report, many Region 6 Moderate Income (81%-95%), 8% jobs exceed the state s 2008 per capita income level of $37,774, with 376 occupations paying more than this amount. 65 Service Region 67 Table 3-3 Income Levels for Region 6 as compared to state as a whole 66 Total Households Extremely Low Income (0% to 30% AMFI) Very Low Income (31% to 50% AMFI) Low Income (51% to 80% AMFI) Moderate Income (80.1% and above AMFI) 6 1,694, , , ,397 1,011,916 Source: 2000 CHAS Database 64 Texas Comptroller of Public Accounts, Texas in Focus: Gulf Coast Region, October (accessed October 6, 2010). 65 Texas Comptroller of Public Accounts, Texas in Focus: Gulf Coast Region, October (accessed October 6, 2010). 66 Includes Colorado County which is not in the disaster impacted area. 67 Where the term Service Region is used in this section, the term means Comptroller s 13 Uniform State Service Regions of Texas, the Region system used by TDHCA for funding March 2011 State of Texas Analysis to Impediments to Fair Housing Page 41 of 196

42 Homeless Persons. According to 2010 population projections by Ribbon Demographics, this region has approximately 27.1 percent of the statewide total of people in non-institutional group quarters, including shelters. Region 6 also experienced damage from Hurricane Rita, which hit the southeast Texas area in September 2005 and Hurricane Ike in September According to FEMA, $28.3 million worth of damage was reported after Hurricane Rita and $29.4 billion after the 2008 hurricane season. Households affected by the hurricane have unexpected needs. Persons with Disabilities. County Table 3-4 H-GAC Homeless, 2010 Homeless Persons Austin 43 Brazoria 413 Chambers 15 Fort Bend 1,513 Galveston 604 Harris 14,378 Liberty 28 Matagorda 35 Montgomery 294 Walker 537 Waller 95 Wharton 295 Total 18,250 Source: Nielsen Claritas, Ribbon Demographics, According to the US Census, of the total population in Region 6, persons with disabilities account for approximately 16.5 percent of the population. Of this total, approximately 96 percent are residing in urban areas, with the remaining 4 percent in rural areas. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 42 of 196

43 County Table 3-5 Region 6 Persons with, without disabilities, 2000 Persons with a disability County Population Austin 4,173 23,590 Brazoria 37, ,767 Chambers 4,175 26,031 Fort Bend 46, ,452 Galveston 42, ,158 Harris 573,025 3,400,578 Liberty 13,516 70,154 Matagorda 7,063 37,957 Montgomery 47, ,768 Walker 8,101 61,758 Waller 5,914 32,663 Wharton 7,477 41, ,687 4,834,064 Source: US Census Public Housing. There are 5,762 public housing units present in the H-GAC region. The vast majority of these sites are in urban areas as Table 3-6 demonstrates. The PHAs address housing needs via a system of housing units and vouchers, Hurricane Ike damaged units on Galveston Island leading the city to condemn the buildings and for them to be destroyed. As part of the process of tearing down the damaged units, an agreement to rebuild 569 units of public housing was drafted between the Galveston Housing Authority and its tenants represented by Lone Star Legal Aid for the benefit of Low Income Galvestonians. The Conciliation Agreement signed by the State of Texas carried this commitment forward. Rebuilding these units continues to be controversial with a portion of the city s population However, the Galveston City Council has voted twice to move forward and restore public housing by allocating $25 million in funding during Round 1 and by passing a resolution requiring the rebuilding of 569 public housing units and instructing the Galveston Public Housing Authority to prepare a redevelopment plan for City Council approval. Prior to the hurricane, Texas City had embarked on a process to replace old-style public housing with a voucher program. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 43 of 196

44 Emergency Assistance Foreclosure Legal Assistance Utility Assistance Disaster Assistance Rental Assistance Homebuyer Assistance Repair The state committed in the Conciliation Agreement to set aside tens of millions of dollars in disaster recovery funds to make sure that all public housing damaged or destroyed by the storm in the H-GAC region was replaced or rebuilt. Local Input on Housing Assistance. Table 3-6 Public Housing units in Region 6 Region Rural Urban PHA Units ,462 5,762 State Total 26, ,416 According to the TDHCA Public Request Assistance Inventory for State Fiscal year 2010, the agency received 48,488 public assistance requests from Region 6, which accounted for 23.0 percent of total annual requests. Of requests from Region 6, the three most requested categories of assistance were, in order: Rental Assistance; Homebuyer Assistance, and Utility Assistance. Table 3-7 H-GAC Public Assistance Request Inventory, SFY 2010 Austin Brazoria Chambers Fort Bend Galveston Harris Liberty Matagorda Montgomery Walker Waller Wharton Source: TDHCA Public Request Assistance Inventory for SFY2010. Persons with HIV/AIDS According to the Texas Department of State Health Services 2010 Texas Integrated Epidemiologic Profile for HIV/AIDS Prevention and Services Planning, there are 20,898 persons living with HIV/AIDS in the H-GAC impacted Region, Approximately 99 percent of this population is living in urban areas, with the remaining 1 percent in rural areas. Region 6 has a high rate of persons living with HIV/AIDS compared to the state as a whole, with the Houston March 2011 State of Texas Analysis to Impediments to Fair Housing Page 44 of 196

45 metropolitan area accounting for 31.4 percent of the total. Additionally, the Houston metropolitan area has a rate of 392 persons per 100,000, which is the highest in the state. Table 3-8 H-GAC Persons living with HIV/AIDS, 2008 County HIV/AIDS Number HIV/AIDS Rate Population 2008 Austin ,032 Brazoria ,228 Chambers ,366 Fort Bend ,609 Galveston ,489 Harris 18, ,980,602 Liberty ,335 Matagorda ,038 Montgomery ,238 Walker ,554 Waller ,970 Wharton ,863 20,898 5,843,324 Source: Texas Department of State Health Services Texas Integrated Epidemiologic Profile for HIV/AIDS Prevention and Services Planning: HIV/AIDS in Texas. Population from US Census Population Estimates, Migrant Farmworkers. In a study prepared for the US Health Resources and Services Administration, Region 6 was found to have a very low proportion of the state s Migrant and Seasonal Farmworker (MSFW) population, accounting for just 2.7 percent of the 361,414 MSFWs in the state of Texas. 69 Table 3-9 H-GAC Migrant and Seasonal Farmworker Population, 2000 County Migrant Seasonal Farmworkers % of MSFW Statewide population Austin 224 6% Brazoria 1, % Chambers - 0% Fort Bend 1, % Galveston 85 2% Harris 3, % Liberty 71 2% Matagorda % Montgomery 107 3% Walker 190 5% Waller 244 7% Wharton 1, % 9, ,414 Source: HRSA Migrant Health Program, Note: Figures do not include those unaware of their HIV infection of those who tested HIV positive solely through an anonymous HIV test. Cases diagnosed at the Texas Department of Criminal Justice System are not attributed to a geographic area. 69 Migrant and Seasonal Farmworker Enumeration Profiles Study TX, Larson, Alice, March 2011 State of Texas Analysis to Impediments to Fair Housing Page 45 of 196

46 HOUSING ASSESSMENT. A housing assessment includes the current housing supply, a sample of market-rate housing costs, the housing needs and the availability of subsidized housing. Housing Supply. According to the 2010 projection, 90.1 percent of the housing units in the region are occupied. Of the total housing stock, 65.8 percent are one unit; 1.3 percent are two units; 18 percent are three or more units; 5.5 percent are mobile homes; and the rest are RVs and boats. Table 3-10 Region 6 Housing Supply, 2010 Rural Urban Total Total housing units 80,727 2,235,809 2,316,536 Vacant housing units 14, , ,996 Housing units, 1 unit 54,073 1,469,553 1,523,626 Housing units, 2 units 1,604 28,028 29,632 Housing units, 3 to 4 units 3,065 59,430 62,495 Housing units, 5 to 19 units 6, , ,322 Housing units, 20 to 49 units ,726 88,588 Housing units, 50+ units 1, , ,078 Housing units, mobile home 13, , ,595 Housing units, other 94 2,106 2,200 Source: Nielsen Claritas, Ribbon Demographics, Sample of Market Housing Costs. Samples of Market Housing Costs include median home prices for the region s largest city, a highly impacted coastal city (Galveston). According to the Multiple Listing Service records for August 2010, the median home prices for Houston and Galveston are $157,500 and $180,000 respectively. 70 In addition, the fair market rent for a two bedroom unit in Houston/Baytown/Sugar Land HMFA and Galveston County is $892, requiring an annual income of approximately $35, Housing Need. The housing need indicators analyzed in this section include housing cost burden, substandard housing conditions and housing overcrowding for renter and owner households. The following 70 Real Estate Center at Texas A&M University, Texas Residential MLS Activity, (accessed September 24, 2010). 71 National Low Income Housing Coalition. (2010). Out of reach Retrieved from March 2011 State of Texas Analysis to Impediments to Fair Housing Page 46 of 196

47 information comes from the 2000 CHAS database update with HISTA population projections. There were approximately 621,947 owners and renters with housing problems in NAME Table 3-11 H-GAC Households with Housing Problems, 2009 Units Lacking Complete Plumbing/Kitchen, CHAS 2000 Total units all incomes 0-30% HAMFI 31-50% HAMFI 51-80% HAMFI >80% HAMFI Texas 78,129 35,692 19,997 14,463 7,977 Austin Brazoria Chambers Fort Bend Galveston Harris 8,714 2,343 3,355 2, Liberty Matagorda Montgomery Walker Waller Wharton ,449 5,032 4,418 2,740 1,259 Households with a Cost Burden >30%, CHAS 2000 NAME total households 0-30% 31-50% 51-80% 81-95% > all incomes HAMFI HAMFI HAMFI HAMFI 95%HAMFI Texas 1,493, , , ,093 76, ,187 Austin 1, Brazoria 11,416 4,896 2,841 2, Chambers 1, Fort Bend 15,893 3,727 2,498 3,393 1,402 4,873 Galveston 19,757 8,334 5,021 3, ,114 Harris 254,158 99,914 65,347 46,538 11,609 30,750 Liberty 4,088 2, Matagorda 2,555 1, Montgomery 14,978 5,085 3,669 3, ,257 Walker 4,589 2, , Waller 1,855 1, Wharton 2,682 1, , ,511 83,355 61,550 15,941 42,228 March 2011 State of Texas Analysis to Impediments to Fair Housing Page 47 of 196

48 Households that are Overcrowded, CHAS 2000 NAME total households 0-30% HAMFI 31-50% HAMFI 51-80% HAMFI 81-95% HAMFI > all incomes 95%HAMFI Texas 469, ,809 96, ,821 40, ,032 Austin Brazoria 3, , Chambers Fort Bend 4, , ,454 Galveston 4,201 1, , Harris 95,911 23,863 20,214 24,236 8,471 19,127 Liberty 1, Matagorda 1, Montgomery 3, Walker Waller Wharton ,810 28,794 24,366 29,769 10,568 24,313 Identification of Impediments to Fair Housing. The H-GAC region is diverse because of the differences in community size and the amount and type of employment. It is home to almost a quarter of the refining production in the United States. It also has four operational ports with one being one of the busiest ports in the United States. Galveston Bay and the Gulf also provide one of the largest fisheries in the state. It has 23.3 percent of the state s population and Houston is the fourth largest city in the United States. As previously mentioned, about 48 percent of its population s income earns less than 80 percent of the area median family income. The region has no ethnic group representing a majority of the population, although currently Non Hispanic Whites still make up the largest single portion of the population. Despite its diversity, it is not a region without Fair Housing challenges. As discussed above, the need for more affordable housing is an impediment. This AI will not focus on that issue unless there is an unusual circumstance that requires special attention like public housing or repair of affordable rental housing. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 48 of 196

49 Home Mortgage Disclosure Act Analysis. 72 The State of Texas contracted with the National Community Reinvestment Coalition ( NCRC ) to conduct a portfolio and market share analysis using 2008 Home Mortgage Disclosure Act ( HMDA ) data for the Houston Galveston Area Council ( H-GAC ). The following counties comprise the Ike affected portion of H-GAC: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Matagorda, Montgomery, Walker, Waller, and Wharton. 73 Portfolio Share Analysis of All Conventional Single Family Lending in Houston, Galveston, Texas. Hispanics are the largest minority group in Houston Galveston, TX, representing more than 21 percent of all households. African Americans account for about 17 percent of households and Asians account for about 4 percent of households in Houston Galveston. Table 1a (see corresponding Chart 1a) of the conventional lending report shows that the portions of all prime loans received by Hispanic borrowers and African American borrowers were lower than the portion of loans received by non-hispanic white borrowers compared to their portion of households. Hispanic borrowers received only percent of prime loans that was lower than their portion of households (21.34 percent). African American borrowers received only 5.3 percent of prime loans that was considerably less than their portion of households (17.3 percent). In contrast, non-hispanic whites received percent of prime loans that was higher than their portion of households (55.97 percent). Asians were overrepresented in prime loans (10.44 percent of prime loans versus 4.14 percent of households). 72 The AI committee acknowledges a few important points associated with Home Mortgage Disclosure Act analysis. 1. Credit scores are not considered in HMDA analyses.2. Factors that are often associated with high-cost loans: Credit scores Sparse credit history (can be an issue for immigrants) Small loans (often associated with less expensive and smaller housing or piggyback loan) Manufactured Housing Age (i.e., very young or elderly tend to have higher interest loans) High debt to income ratios High loan to value ratios Small down payment amounts Refinancing (when cashing out of equity) 73 The State hired Southwest Fair Housing Council to be the primary contractor and they contracted with the National Community Reinvestment Council on behalf of the state. This report is largely un-edited except for formatting to be consistent with the balance of the AI. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 49 of 196

50 Chart 3-1a Derived from data in Table 1a 74 In Table 3-2a (see corresponding Chart 2a), all low- and moderate-income (LMI) non- Hispanic whites, Hispanics, and African Americans received a higher portion of high-cost loans than their portion of prime loans during However, the difference was worse for Hispanics, and African Americans. Almost 18 percent of the high-cost loans were issued to LMI Hispanics while just about 4 percent of the prime loans were issued to LMI Hispanics. Similarly, LMI African Americans received less than one percent of prime loans and almost 5 percent of highcost loans. In contrast, LMI non-hispanic whites received more than 7 percent of prime loans and about 10 percent high-cost loans. (Note: Census data does not break out Hispanic households by income level so we are unable to compare the share of loans by income level to the share of Hispanic households by income level. We are able to compare the share of loans by income level to the share of households by race and income level since Census data does break out households by income level for each race). Chart 3-2a Derived from data in Table 2a 74 All references to the data tables in this section can be found in Appendix H March 2011 State of Texas Analysis to Impediments to Fair Housing Page 50 of 196

51 Table 3-3a (see corresponding Chart 3a) likewise reveals a disproportionate amount of high-cost loans received by middle- and upper-income (MUI) Hispanics and MUI African Americans. MUI Hispanics received approximately 16 percent and about 9 percent of high-cost and prime loans, respectively. In contrast, MUI non-hispanic whites received 56.7 percent and 32.8 percent of prime and high-cost loans, respectively. Chart 3-3a Derived from data in Table 3a Substantially minority neighborhoods received a disproportionate amount of high-cost loans as shown by Table 4a of the tables displaying conventional lending by minority level of neighborhood. Substantially minority neighborhoods with 50 to 79 percent of the residents being minority contain about 18 percent of the owner-occupied housing units and received more than 24 percent of the high-cost loans. In contrast, neighborhoods with 20 to 49 percent of minorities received a portion of high-cost loans (37.12 percent) that was almost equal to their portion of owner-occupied units (37.18 percent). These mixed racial neighborhoods (neighborhoods with 20 to 49 percent of minorities) received a portion of prime loans (42.28 percent) that was greater than their portion of high-cost loans and owner-occupied units. Market Share Analysis of All Conventional Single Family Lending in Houston Galveston, Texas. Appendix H Table 1b (see corresponding Chart 3-1b) shows market share ratios in Houston Galveston that are not controlled for income. The table reveals that Hispanics are 2.86 times more likely than non-hispanic whites to receive a high-cost loan (divide 30.2 percent for Hispanics by 10.6 percent for non-hispanic white borrowers). Similarly, African Americans are 2.76 times more likely to receive a high-cost loan than non-hispanic white borrowers. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 51 of 196

52 Chart 3-1b Derived from data in Table 1b In Appendix H Table 2b (see corresponding Chart 3-2b), LMI Hispanics are almost twice as likely to receive a high-cost loan as LMI non-hispanic whites. LMI African Americans are 2.25 times more likely to receive a high-cost loan compared to LMI non-hispanic white borrowers (the ratio is calculated by dividing 45.5 percent of loans being high-cost for LMI African Americans by 20.2 percent of loans being high-cost for LMI non-hispanic whites). Chart 3-2b Derived from data in Table 2b Appendix H Table 3b (see corresponding Chart 3-3b) shows that MUI Hispanics are 2.58 times more likely to receive a high-cost loan than MUI non-hispanic whites (divide 23.9 percent of the loans being high-cost for MUI Hispanics by 9.3 percent of the loans being high-cost for MUI non-hispanic whites). MUI African Americans are 2.54 times more likely to receive a high-cost loan than MUI non-hispanics whites (divide 23.6 percent of the loans being high-cost for MUI African Americans by 9.3 percent of the loans being high-cost for MUI non-hispanic whites). Ethnic and racial disparities in lending increase as income levels increase. The disparity ratio is higher when comparing MUI Hispanics and MUI African Americans to MUI non-hispanic whites than when comparing LMI Hispanics and LMI African Americans to LMI non-hispanic whites. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 52 of 196

53 Chart 3-3b Derived from data in Table 3b Residents of minority neighborhoods are much more likely than those of predominantly white neighborhoods to receive high-cost loans. Table 4b of conventional lending by minority level of neighborhood shows that residents of substantially minority neighborhoods (50 to 79 percent minorities) are 2.1 times more likely to receive high-cost loans than residents of neighborhoods with less than 10 percent minorities (divide 20.3 percent of loans being high-cost in substantially minority neighborhoods by 9.7 percent of the loans being high-cost in neighborhoods less than 10 percent). Likewise residents of predominantly minority neighborhoods are 3.56 times more likely than predominantly white neighborhoods to receive high-cost loans. Conventional Denial Disparity Analysis. The overall denial rate (Appendix H Table 1c, see Chart 3-1c) is about 29 percent in Houston Galveston. The denial rate for non-hispanic white individuals is about 20 percent, whereas the denial rates for the African Americans and Hispanics are percent and percent, respectively. African Americans and Hispanics are 2.5 and 2.13 times more likely, respectively, than non-hispanic whites to be denied a loan. Chart 3-1c Derived from data in Table 1c March 2011 State of Texas Analysis to Impediments to Fair Housing Page 53 of 196

54 LMI African American borrowers have a denial rate of percent for loans that is about 15 percentage points higher than the overall denial rate for all LMI loan applicants of percent (Appendix H Table 2c, see Chart 3-2c). LMI Hispanic borrowers have a denial rate of about 48 percent which is higher than the overall denial rate for all LMI loan applicants. In contrast, LMI non-hispanic white borrowers experience denial rates 11 percentage points lower than the overall denial rate. Chart 3-2c Derived from data in Table 2c Among MUI individuals (Appendix H Table 3c, see Chart 3-3c), Hispanic and African American borrowers experience denial rates noticeably higher than those of non-hispanic whites. MUI African Americans have a denial rate of percent in contrast to MUI non-hispanic whites with a denial rate of percent. MUI African Americans are therefore 2.59 times more likely to be denied than MUI non-hispanic whites. MUI Hispanics have a denial rate of percent and therefore 2.13 times more likely than MUI non-hispanic whites to be denied. Ethnic and racial disparities in denials increase as income levels increase. Chart 3c Derived from data in Table 3c March 2011 State of Texas Analysis to Impediments to Fair Housing Page 54 of 196

55 Residents of substantially minority neighborhoods (50 to 79 percent minorities) are 1.83 times more likely than residents of white neighborhoods (less than 10 percent minorities) to be denied loans. More than 35 percent of the applicants from substantially minority neighborhoods are denied loans in contrast to about 19 percent of the applicants from white neighborhoods. Portfolio Share Analysis of All FHA Single Family Lending in Houston Galveston, Texas. NCRC expanded the Houston Galveston analysis to include information on FHA lending. FHA loans are guaranteed by the Federal government, specifically the Federal Housing Administration (FHA). Borrowers pay an upfront premium and an annual premium to help fund FHA insurance. The FHA insurance covers the costs of defaults. In other words, the government, through FHA fees on borrowers, covers the costs of defaults. In contrast, conventional lending involves lenders themselves absorbing the costs of defaults. Often, lending institutions will protect themselves against loss by requiring borrowers to pay for private mortgage insurance. The total number of FHA loans was smaller than total number of conventional loans in Houston Galveston in Lenders issued 18,759 prime FHA loans and 55,609 prime conventional loans, and 3,647 high-cost FHA loans and 9,357 high-cost conventional loans during 2008 in Houston Galveston. What is particularly relevant for our analysis is whether minorities are much more likely relative to non-hispanic whites to receive high-cost FHA loans. FHA lending has not been saddled with the abusive tricks, traps, and fees of many subprime loans. Yet, it remains the case that FHA loans are more expensive than conventional loans. If minorities receive a disproportionate amount of high-cost FHA loans and/or prime FHA loans relative to conventional loans, stakeholders should take steps to increase the amount of conventional lending to minorities. Appendix Table 1a (see corresponding Chart 3-1.1a) for FHA lending shows that Hispanics have a high ratio of high-cost FHA loans compared to the percentage of households. With about 21 percent of the households in Houston Galveston, Hispanics received percent of high-cost FHA loans. The share of high-cost FHA loans for Hispanic was 1.42 times greater than their share of households in Houston Galveston in Hispanics also received a higher share of prime FHA loans (26.08) than their share of households (21.34 percent). It should also be noted that Hispanics received a higher share of prime FHA loans than prime conventional loans (26.08 percent versus percent) during March 2011 State of Texas Analysis to Impediments to Fair Housing Page 55 of 196

56 Similarly, African Americans received a higher share of high-cost FHA loans than high-cost conventional loans (16.87 percent versus percent), and also a higher share of prime FHA loans than prime conventional loans (16.87 percent versus 5.31 percent). Since FHA loans are more expensive than prime loans, stakeholders should increase their efforts to make prime conventional loans to Hispanics and African Americans. In contrast to Hispanics and African Americans, non-hispanic whites received a share of highcost FHA loans (of percent) that were lower than their share of households (of percent) in Houston Galveston. In contrast to African Americans and Hispanics, non-hispanic whites received a higher share of prime conventional loans (65.9 percent) than prime FHA loans (49.2 percent). Chart 3.1.1a Derived from data in Chart 1a Appendix H Table 2a (see corresponding Chart 3-1.2a) for FHA lending shows that both LMI non-hispanic whites and Hispanics received disproportionate amounts of high-cost FHA loans. About 10 percent of the high-cost FHA loans were issued to LMI non-hispanic whites and 7.95 percent of the prime FHA loans were issued to LMI non-hispanic whites. Similarly, 12.9 percent of the high-cost FHA loans were issued to LMI Hispanics and 8.92 percent of the prime FHA loans were issued to LMI Hispanics. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 56 of 196

57 Chart 3-1.2a Derived from data in Table 2a Appendix H Table 3a (see corresponding Chart 3-3.3a) shows disparities in high-cost FHA lending for middle- and upper-income borrowers. MUI Hispanics, for example, received 14.8 percent of prime FHA loans which was similar to their share of high-cost FHA loans (15.27 percent). MUI African Americans received a share of prime FHA loans that was 2.5 percentage points lower than their share of high-cost FHA loans. In contrast, MUI non-hispanic whites received a share of prime FHA loans that was 6.4 percentage points greater than their share of high-cost FHA loans. Chart 3-3.3a Derived from data in Table 3a Market Share Analysis of All FHA Single Family Lending in Houston Galveston, Texas The overall market share ratio (Appendix H Table 1b, see Chart 3-1.2b) shows that 20.1 percent of the loans received by African Americans and 18.7 percent of the loans received by Hispanics are high-cost FHA loans while 14.7 percent of the loans received by non-hispanic whites were high-cost FHA loans. Thus, Hispanics are 1.37 times and African Americans are 1.27 times more likely to receive a high-cost FHA loan than non-hispanics whites. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 57 of 196

58 Chart 3-1.1b Derived from data in Table 1b LMI Hispanics are 1.12 times more likely to receive a high-cost FHA loan than LMI non- Hispanic whites, and LMI African Americans are 1.15 times more likely to receive a high cost FHA loan than LMI non -Hispanic whites (Appendix Table H Table 3-1.2b, see Chart 2b). Chart 3-1.2b Derived from data in Table 2b MUI African Americans are 1.44 times more likely to receive high-cost FHA loans and MUI Hispanics are 1.24 times more likely to receive high-cost FHA loans when compared to their non-hispanic white counterparts (Appendix H Table 3b, see Chart 3b). Thus, the trend of increasing ethnic and racial disparities as income levels increase are observed with high-cost FHA lending as in high-cost conventional lending. Chart 3-1.3b Derived from data in Table 3b March 2011 State of Texas Analysis to Impediments to Fair Housing Page 58 of 196

59 FHA Loan Denial Disparity Analysis. The overall denial rate for all FHA loans (Appendix H Table 1c, Chart 3-1.1c) in Houston Galveston is percent. The denial rate for non-hispanic whites is lower at percent. The denial rate for Hispanics (21.95 percent), Asians (19.74 percent) and African Americans (25.89 percent) are all higher than the overall denial rate. African Americans are 1.76 times more likely than non-hispanic whites to be denied an FHA loan during 2008 in Houston Galveston. Chart 3-1.1c Derived from data in Table 1c The overall denial rate for LMI individuals (Appendix H Table 2c, Chart 3-1.2c) is percent, with the denial rate for LMI non-hispanics whites being percent, LMI Hispanics being percent, and LMI African Americans being percent. LMI African Americans are 1.53 times and LMI Hispanics are 1.29 times more likely than LMI non-hispanic whites to be denied an FHA loan. Chart 3-1.2c Derived from data in Table 2c MUI non-hispanic whites experienced a denial rate of percent whereas MUI Hispanics and MUI African Americans had a denial rate of percent and 23.6 percent, respectively for March 2011 State of Texas Analysis to Impediments to Fair Housing Page 59 of 196

60 FHA loans. MUI Hispanics were denied 1.46 times and MUI African Americans were denied 1.76 times more often than MUI non-hispanic whites for FHA loans. Both FHA lending and conventional lending share the same trend that ethnic and racial disparities in denials increase with income levels (See Appendix H Table 3c, Chart 3-1.3c). Chart 3-1.3c Derived from data in Table 3c Summary and Conclusions. In Houston Galveston, the portions of all prime conventional loans received by Hispanics (14.41 percent of prime loans versus percent of households) were lower than the loans received by non-hispanic whites (65.93 percent of prime loans versus percent of households) compared to their portions of households. In Houston-Galveston region, Hispanic households received a lower share of prime conventional loans than non-hispanic whites. Hispanics own percent of the homes and only hold percent of all prime conventional loans, while non-hispanic whites own of the homes and hold percent of the prime loans. Similarly, the portion of all prime loans received by African American borrowers was also lower than the loans received by non-hispanic white borrowers compared to their portion of households. Hispanics are 2.86 times more likely than non-hispanic whites to receive a high-cost loan and African Americans are 2.76 times more likely to receive a high-cost loan than non- Hispanic white borrowers. MUI Hispanics are 2.58 times more likely to receive a high-cost loan than MUI non- Hispanics whites. LMI Hispanics are 1.97 times more likely to receive a high-cost loan than March 2011 State of Texas Analysis to Impediments to Fair Housing Page 60 of 196

61 LMI non-hispanic whites during Ethnic disparities in conventional lending increase as income levels increase in Houston Galveston. MUI African Americans are 2.54 times more likely to receive a high-cost loan than MUI non-hispanics whites. LMI African Americans are 2.25 times more likely to receive a highcost loan compared to LMI non-hispanic white borrowers. Racial disparities in conventional lending increase as income levels increase. The denial disparity ratio is higher when comparing MUI Hispanics and MUI African Americans to MUI non-hispanic whites than when comparing LMI Hispanics and LMI African Americans to LMI non-hispanic whites. Ethnic and racial disparities in denials increase as income levels increase. Hispanics received a higher share of prime FHA loans than prime conventional loans (26.08 percent versus percent) in Houston Galveston. Also, with percent of the households in Houston Galveston, Hispanics received percent of high-cost FHA loans during The trends were the same for African Americans. Since FHA loans are more expensive than prime loans, stakeholders should increase their efforts to make prime conventional loans to Hispanics and African Americans. Hispanics are 1.37 times and African Americans are 1.27 times more likely to receive a highcost FHA loan than non-hispanics whites. Ethnic and racial disparities are observed in both conventional and FHA lending, and also in denying applications for both conventional and FHA loans. Stakeholders should take steps to narrow disparities in both conventional and FHA lending. Concentration and Racial Segregation. The demographic materials in Appendix D show a clear pattern of concentration based on racial classification. For instance when you look at City of Houston the population is 30.8 percent Non Hispanic White. In looking at the dissimilarity index percent Hispanics and percent of blacks would need to move to make the city racially integrated. 75 Compare this with the City of Lake Jackson where the population is 77 percent Non Hispanic White and has a dissimilarity 75 Appendix D category of communities 50K+ data and maps. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 61 of 196

62 index of percent for Hispanics and percent for Blacks demonstrating a relatively integrated community. 76 The materials provide communities with a way to target concentrations of racial classes by providing individuals the ability to relocate using disaster recovery funds and, in entitlement communities, HOME and CDBG dollars. Maps of Houston show a significant concentration of minorities exceeding 65 percent in most of the community while other areas show less than a 35% minority concentration indicating segregated neighborhood blocks. 77 Contrast that with the Lake Jackson map that show no areas where the racial concentration is greater than 65%. 78 In the Housing Guidelines for Round 2 funds, Houston would be a community that could and should be targeted for Round 2 disaster recovery funds for the Homeowner Opportunity Program. This program will assist in allowing qualified applicants in the most heavily concentrated areas for race and poverty federal assistance in moving out of these areas into high opportunity or more racially diverse areas. A challenge that is currently facing Houston is the proliferation of high cost apartments and condominiums displacing affordable housing in traditionally lower income and more affordable areas a process known as gentrification. 79 Frequently these areas are near downtown or on the edge of otherwise desirable areas. When a large influx of expensive homes comes in, it has the effect of increasing land costs and taxable values on existing homes. Where elderly or low income person own these homes, they are sometimes forced out because of the increased costs, especially taxation, to live in the home. In other cases where the tenant rents, the land becomes more valuable and results in either rental increases or a sale of property, either way likely displacing the low income tenant with limited choices available. This information is provided for communities to use in planning how to address concentration patterns in spending federal funds. Each community over 10,000 has maps available to it that highlight racial makeup of their community by census tract. 76 Appendix D category of communities between 25,000 and 49,999 data and maps. 77 Appendix D category of communities 50K+ data and maps. 78 Appendix D category of communities between 25,000 and 49,999 data and maps. 79 City of Houston Analysis of Impediments April March 2011 State of Texas Analysis to Impediments to Fair Housing Page 62 of 196

63 Not In My Backyard The impediment of NIMBYism. The concept of NIMBYism can be summarized by citizen opposition to development (infrastructure or housing) simply because the residents are reluctant to have new development in their community. NIMBYism often manifests itself at public hearings and meetings where residents come together and express their opinions related to potential affordable housing or infrastructure projects like sewage treatment plants, waste disposal facilities or similar community necessary projects. NIMBYism is often represented by small numbers of citizens with strong opinions who are very vocal and organized, and do not necessarily represent the majority of local public opinion. Currently the City of Galveston is undergoing a strong resident reaction to rebuilding public housing in the community. However, the Galveston City Council has voted to move forward and restore public housing twice by allocating $25 million in funding during Round 1 and by passing a resolution requiring the rebuilding of 569 public housing units and instructing the Galveston Public Housing Authority to prepare a redevelopment plan for City Council approval. Thanks to strong leadership from the Galveston Mayor locally and the State requiring the units to be built as part of the Conciliation Agreement, this effort to stop public housing does not look like it will be successful. 80 Another example of NIMBYism occurred at a public hearing to discuss multifamily development within the impacted area.. A recent exchange between residents and a developer was reported in the local newspaper as: (Our demographers) indicated that the number of students that come out of these types of developments are far more than a standard, normal apartment, and that s the stand that we have taken. [school district representative] A resident and former HOA board member from the area, asked residents if they knew that more than $250,000 of their property dues each year is spent to pay for facilities. The apartment people pay zero that means we have to pay for transients or people who do not have a vested interest in this community as we do, he said. There s a bond for additional things that we don t have the money for right now. Yet, they want 80 See, Galveston Daily News, October 29 and October 14, 2010 March 2011 State of Texas Analysis to Impediments to Fair Housing Page 63 of 196

64 to bring in 250 families who can t afford to pay for their homes or any of the taxes that s needed to support our community. That s a bad idea folks, she told the crowd. Ask the right questions. Don t get upset with these people up here who are doing their jobs. Your job, as a community, is to stand up and say, Hell no. 81 As the developer has withdrawn its application to TDHCA, this NIMBYism effort has already been successful. These are examples of hearings where local residents raised concerns about how low income housing might impact their schools (overcrowding), traffic (increase), property values (lower) and crime rates (increase). Issues relating NIMBYism were raised in the focus groups, a summary of which can be found by region in Appendix F. It is important to note that despite occurrence of NIMBYism, 70,630 multifamily housing units have been constructed in the H-GAC region over the past 3 years. 82 Discrimination in Housing Markets. No direct testing of the real estate industry was done as part of this AI. However, participants in the focus groups identified a pattern of discrimination in private sector real estate markets toward racial minorities. A report by the National Fair Housing Association provided information on the treatment of the minority testers they sent to look for rental units in 17 cities spread across 5 states. Although not specifically listed as a problem city, Houston is included in the list of tested cities. 83 The results of the 2005 undercover professional test groups of representative races was that the black testers were less likely to be told about available units, called back, or shown properties than their white test group counterparts enough times to be statistically relevant to the report. 84 The Houston AI cites a study by the Greater Houston Fair Housing Center that found in conducting a similar test using minority applicants for rental facilities that the African American testers encountered differential treatment 80% of the time when they responded to [an] 81 Breaking News: Gardens on Kingsland withdraws TDHCA application, Residents voice opposition to low-income apartments by Tracy Dang, Thursday October ,Katy Times 82 by permits issued for years No Home for the Holidays Discrimination for Katrina Evacuees 2005, National Fair Housing Alliance 84 Ibid March 2011 State of Texas Analysis to Impediments to Fair Housing Page 64 of 196

65 advertisement about rental housing in Houston. 85 limited to rental markets. The potential discrimination is not just Although not including communities within the scope of this Phase I AI, another report by the National Fair Housing Alliance titled Dr. King s Dream Denied: Forty Years of Failed Federal Enforcement provides a national context for fair housing issues and found that in the twelve metropolitan areas investigated to date, NHFA s testing revealed discriminatory steering practices and illegal behaviors that are both striking and pervasive. 86 The Justice Department has settled a lawsuit for $120,000 with a major real estate firm in Chicago related to steering of minority clients toward minority neighborhoods and away from Non Hispanic White neighborhoods. 87 Collectively, even if not all in this area, it supports the concept that steering creates an impediment to integrated housing patterns. There has been no state testing since Hurricanes Ike and Dolly to confirm the pattern is true and that in itself could be an impediment to Fair Housing. Failure to enforce the laws already written should be reviewed. Policies Restricting Person in Flood Zones. During Hurricane Ike Round 1, housing guidelines were established by the City of Houston that restricted the use of funds by persons in floodplains. 88 While the goal of not rebuilding in most floodplains may be practical, limiting access to disaster recovery funds intended to mitigate flood hazards both frustrates the purpose of these funds and will potentially have a disproportionate impact on members of protected classes. Regulating or limiting rebuilding in most floodplains is well accepted. However, governments should consider providing other housing options for residents that could include allowing them to move out of a floodplain into a safer environment or mitigating flooding rather than denying residents any disaster recovery assistance. These types of restrictions should be evaluated to determine if this policy more severely impacts people of color due to existing housing patterns. 85 City of Houston Analysis of Impediments April 2010 at page titled Dr. King s Dream Denied: Forty Years of Failed Federal Enforcement, National Fair Housing Alliance April 8, Justice Department Obtains $120,000 Discrimination Lawsuit Against Chicago Area Realtors, Feb. 18, 2009 retrieved from 88 City of Houston Housing Guidelines, Hurricane Ike Recovery Round 1, March 2011 State of Texas Analysis to Impediments to Fair Housing Page 65 of 196

66 Lack of Knowledge about what Constitutes Fair Housing Violations. In addition to the real estate steering and rental discrimination, the focus groups indicated that the Fair Housing Act remains a mystery to many. Even clearer is that not many people even if they believe they are being discriminated against know how to take action to file a complaint or report the violation. In Appendix C of this document, all the housing discrimination complaints filed with HUD are listed by county. The H-GAC region has more than five million people living in the community. During interviews in focus groups in the Houston and Galveston areas, the individuals participating in the focus groups raised housing discrimination issues and yet from January 2005 through September 2010 only 750 complaints were made to HUD from this region. In addition, the Texas Workforce Commission received 692 complaints in the total hurricane impacted region (61 counties). Of those, 432, or 62.4 percent were from Harris County. In an indication that the public may not understand the issues, of the 692 complaints 323 of them received findings of no cause. 89 Looking at Project Placement. In reviewing the projects contained in Appendix F, two issues become obvious. Most CDBG funds, when not including disaster funds, whether supplied by the State or used by entitlement communities go to infrastructure projects. The difficulty of determining how the funds are spent is compounded by the manner in which data is reported. Looking at the table very few infrastructure projects have a clear delineation of whom they are directly serving and where the project is located. Without an ability to reference the population served (other than the generic 51 percent plus LMI language), it is difficult to determine who is receiving the benefit of the projects. Because so many of the regular CDBG funds are listed in this manner at both the entitlement jurisdiction and the State the information is not useable to determine if a community is using funds to further fair housing. In addition, in reviewing Appendix F, very little of non-disaster CDBG funds go to housing. In part this may be because funds may be used to address substantial infrastructure needs (especially with regard to wastewater and drinking water projects in rural areas and small cities). A state or local preference for infrastructure use may have been present, but the CDBG Action 89 Housing Discrimination Complaints Section 7. herein. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 66 of 196

67 Plan has a policy that says it supports the use of CDBG funds for the construction of housing. The highly competitive nature of the limited CDBG funding for non-entitlement communities directly factors into the use of funds. Despite the CDBG Action Plan expressed support for building housing with CDBG funds, competitive applications rounds should be reviewed to see if they favor infrastructure over housing in scoring. To underscore the support expressed by the TDRA GDBG Action Plan that housing be considered in the use of CDBG funds, future rounds of funding should include serious consideration of housing as a priority by each Regional Review Committee as they establish funding priorities and scoring criteria. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 67 of 196

68 SECTION 4. GOLDEN TRIANGLE AND SURROUNDING COMMUNITIES. The area referred to as the Golden Triangle is an area where the development of the petrochemical industry and the development of communities surrounding and interwoven with that complex is central, to what it is. As you move inland from the Gulf Coast, however, the area very quickly becomes typical of rural East Texas. So much of the area is urban, much is industrial, and much has a rural character. This section is not intended to provide a complete AI for each community in the Golden Triangle area. In fact, some communities in the region may find more in common with the small community section where the focus is on cities of less than 2,500 and provides more similar conditions to what they are facing and looks at similar ways to overcome Fair Housing impediments. This area has size differences between communities, but they share a lot of similar interests including what has now been more than five years of disaster recovery beginning with their support of Hurricane Katrina evacuees before becoming themselves the victim of the devastating Hurricane Rita and then Hurricane Ike. While the region does not have a large urban population like its nearby neighbor Houston, it does have approximately 400,000 people that call the region home. The community has a strong presence in refineries, colleges, and other industries. This section will more clearly develop the local demographic information and look at potential impediments to Fair Housing that exist in the area. Historical Recap. Located along Texas Gulf Coast, Southeast Texas is a geographic, economic, and cultural sub region encompassing Hardin, Jefferson, and Orange Counties. The major metropolitan areas within this region, Beaumont, Port Arthur and Orange, are collectively referred to as the Golden Triangle. Culturally the region is said to have Cajun, Louisiana Creole, and rural southern influences, particularly in regards to dialect, mannerisms, religion, and cuisine. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 68 of 196

69 The Beaumont-Port Arthur Metropolitan Statistical Area (MSA) is the largest in the region. Beaumont traces its roots to ranching and farming settlements eventually establishing itself as a town in Beaumont got its big start more than 100 years ago. It was named after Mary Dewburleigh Barlace Warren Beaumont, the wife of businessman Henry Millard. Beaumont officially became a town on December 16, 1838, and was a center for cattle raisers and farmers in its early years. In the late 1800s, Beaumont became an important lumber and rice-milling town. Because Beaumont is strategically-located on the Neches River and had an active river port, the city was ideally positioned to capitalize on the lumber boom of the late 19th century. The city helped ship lumber across the country, most importantly to help rebuild the railroads after the Civil War. The first commercial rice mill in Texas, the Beaumont Rice Mill, was also founded during this period in Beaumont's history. On January 10, 1901, the Lucas Gusher on Spindletop Hill exploded, shooting oil hundreds of feet in the air. The explosion was so intense that nine days later the oil column was still gushing nearly 200 feet high, producing around 100,000 barrels a day. The Lucas Gusher dramatically displayed the natural resource that lay below Beaumont. Within a few days of the Lucas Gusher explosion, over 40,000 curious sightseers, speculators and jobseekers descended on Beaumont. Restaurants, hotels and retail establishments were overwhelmed as the city's population grew from 9,000 in January 1901 to 30,000 in March 1901, leading to a Texas-sized building boom. Over the next few years, dozens of oil companies were chartered. Six wells were erected on Spindletop Hill, helping make the US the world's leading petroleum-producing nation. Spindletop became the first major oil field and the largest in American history, ushering in the Petroleum Age. 91 The growth of the petroleum age also created other issues. In the neighborhood adjacent to the Beaumont Exxon Mobile refinery (the sixth largest in the US), 95 percent of residents are African American and 54 percent of those are at or below the poverty level ( March 2011 State of Texas Analysis to Impediments to Fair Housing Page 69 of 196

70 These percentages are similar to other minority neighborhoods in the area. 92 As mentioned by several interviewees, environmental pollution is a major problem and may be a major factor in white flight from the downtown and other areas of Beaumont and Port Arthur. The Beaumont Exxon Mobil Complex is consistently in the nation s top ten percent of worst polluting refineries and chemical plants. Emissions are around 385 percent above the state s refinery average. African American communities near refineries are disproportionately burdened by environmental impacts due to lack of enforcement of environmental laws. As a result, there have been many violations of Title VI of the 1964 Civil Rights Act. 93 Since 2005, natural disasters have taken center stage and impacted the area greatly. Following Hurricane Katrina in 2005 many Texas communities welcomed Katrina evacuees from nearby Louisiana. Many of the evacuees were people of color. Some evacuees settled in the East Texas town of Vidor. To some, this was surprising. Vidor is a small city of about 11,000 people near the Texas Gulf Coast. There are very few blacks there; it s mostly white. That is in large part because of racism in Vidor, a past that continues to haunt the present. We ve been trying to live down something for 40 or 50 years, said Orange County Commissioner Beamon Minton. Once convicted, you re a convicted felon. You can t ever put that aside. Vidor was one of hundreds of communities in America known as sundown towns, places where blacks were not welcome after dark. In some of these towns, signs handwritten or printed were posted, saying things like Whites Only After Dark. But in general, sundown towns existed by reputation. Blacks knew they were places to avoid after dark. 94 Vidor also had a reputation as a haven for the Ku Klux Klan. 95 Issues with the Klan date back as early as the 1920 s. In the 1990 s, after four black families moved into a public housing complex, Klansmen in full regalia staged marches, cross-burning and fund-raising to Keep Vidor White. The families soon moved away. 96 While perceptions persist, the Vidor community s actions following Hurricane Katrina give indication that things are changing. In an article written just short of a month after the landfall of Hurricane Katrina, a reporter for the Waterbury Republican-American states that a number of Vidorians see in this unprecedented disaster more than just an opportunity to help people in need; to many this is a chance to make amends for the wrongs of the past, to change ibid 94 CNN U.S. December 8, 2006 Keith Oppenheim CNN, 95 Ibid 96 Waterbury Republican-American September 26, 2005 Todd Lewan (A.P.), March 2011 State of Texas Analysis to Impediments to Fair Housing Page 70 of 196

71 the way insiders and outsiders view this community. It s an opportunity Vidor can t let slip away, says Carl Thibodeaux, a Louisiana native who came to East Texas 34 years ago. He s now the Orange County Judge, which makes him the area s chief official. The racist stigma, says Thibodeaux, who is white, has been here too long. 97 During the Hurricane Katrina disaster, citizens of Vidor stepped up to offer help. Folks opened their doors to Katrina s victims. We took in lots of people of color, said Wendy Harris, a 36-year-old mother of two. Positive feedback was garnered from many black evacuees who received help. Trisha Reaux says, We ve been completely accepted with open arms. Melvin Bahan, 47, a baker from New Orleans, goes farther: The people of Vidor have shown us nothing but love the true love of God. Mr. Bahan went on to say The people here told me all about the racial problems Vidor has had. They didn t hide nothing; came right out an told us. Truth, that s what they gave us. I appreciate that. 98 Shortly after the Katrina evacuees arrived, the area suffered a significant hurricane event with Rita. The damage was extensive 99 and recovery programs are only now being completed five years after the event. 100 The evacuation caused major delays and took significant time to return persons who were displaced during the storm. In 2008, another hurricane event Hurricane Ike caused additional damage and has resulted in billions of dollars of damage. Regional Demographic Recap. The Golden Triangle is represented by the Southeast Texas Regional Planning Commission (SETRPC). SETRPC is located within TDHCA Region The three counties are Jefferson, Orange and Hardin and are considered to be an MSA. Jefferson County is the largest of the communities with more than 242, Beaumont, located in Jefferson County, is the largest city in the area with an estimated population of 112, Ibid 98 Ibid 99 Texas Rebounds, Hurricane Rita 2005, by State of Texas Office of the Governor 100 TDHCA, Report to the Governing board, , Region 5 is the Texas Comptroller s 13 Uniform State Service Regions of Texas and the primary way funds are distributed to non-entitlement communities by TDHCA based on a Regional Allocation Formula as required under Texas Government Code Many of the demographic references are related under the Region 5 banner. Where possible, data has been corrected to include only the three counties. 102 American FactFinder Jefferson County, Texas Community Survey 3-Year Estimates, U.S. Census Bureau retrieved at American FactFinder Beaumont city, Texas Community Survey 3-Year Estimates, U.S. Census Bureau retrieved at March 2011 State of Texas Analysis to Impediments to Fair Housing Page 71 of 196

72 Population. The Golden Triangle is not expected, compared to other parts of Texas, to experience significant growth between now and 2040 according to the state demographers at the University of Texas at San Antonio. Under the Zero Net Migration formula ( ) unlike other parts of Texas, the Hispanic population grows only slightly and the racial make-up of the community remains roughly the same as it is currently with a slight movement toward a larger minority population by Assuming rates of net migration equal to one-half of totals (0.5 ) the Hispanic population grows significantly changing the area to a majority minority population by Year Non Hispanic White Table 4-1 Projected Population SETRPC Region Black Hispanic Other Total ,509 95,835 30,832 9, ,090 Year Non Hispanic White scenario Non Hispanic White 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total , , , ,655 35,477 43,069 11,353 13, , , , , ,319 40,022 59,879 17, , , , , , , ,178 47, ,198 13, , ,626 Age. Table 4-2 shows the population s anticipated aging according to the demographers located at the University of Texas at San Antonio for the SETRPC Region. This table demonstrates that the percentage of the population who is over sixty five will increase in raw numbers within the age category and as a percentage of the population as a whole. 105 The 2040 data assumes rates of net migration equal to one-half of (.5 ) and is neither the least nor the most conservative estimate by the demographers. 104 These projections assume the One-Half Migration (0.5). According to the State Demographer: This scenario has been prepared as an approximate average of the zero () and (1.0) scenarios. It assumes rates of net migration one-half of those of the 1990s. The reason for including this scenario is that many counties in the State are unlikely to continue to experience the overall levels of relative extensive growth of the 1990s. A scenario which projects rates of population growth that are approximately an average of the zero and the scenarios is one that suggest slower than but steady growth. Information for Table 4-1 pulled from Table 2.7 Population for the State of Texas and Council of Government Regions in Texas and Projections to 2040 Assuming Alternative Projection s SETRPC Region data Table 2.14 Percentage of Population for the State of Texas and Council of Government Regions in Texas by Age and Race/Ethnicity of the Population and Median Age by Race/Ethnicity in 2000 and Projections to 2040 Assuming Alternative Projection s HGAC Region data March 2011 State of Texas Analysis to Impediments to Fair Housing Page 72 of 196

73 Age Group Non Hispanic White 2000 Non Hispanic White 2040 Table 4-2 Age by Age Group and Race/Ethnicity Black 2000 Black 2040 Hispanic 2000 Hispanic 2040 Other 2000 Other 2040 Total 2000 Total 2040 < , , Median Poverty and Income. The information on poverty presented below in the table is for the counties that are in the SETRPC region. Table 4-3 SETRPC Poverty Figures, 2010 Families At or Above Poverty Families Below Poverty County Number Percent Number Percent Hardin 13, % 1, % Jefferson 52, % 8, % Orange 21, % 2, % Region 5 Household Incomes. Very Low Income (31%-50%), 12% Low Income (51%-80%), 17% Extremely Low Income (0-30%), 14% Moderate Income (81%-95%), 7% Higher Income (over 95%), 50% The pie chart to the left depicts the income breakdown of the 274,543 households in Region 5 as a whole. Approximately 43 percent of the households are low income. There are 138,673 individuals living in poverty in the region, which makes up 15.2 percent of the regional population. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 73 of 196

74 Income levels for SETRPC/Golden Triangle are represented in the following table: Table 4-4 SETRPC Household Income 30% AMI or less % AMI % AMI 80.1 % and above AMI Grand Total Hardin 155, , , ,549 1,205,151 Jefferson 13,849 11,508 14,616 52,840 92,813 Orange 4,074 3,365 5,419 18,781 31,639 Source: CHAS Special Needs Populations Some data for persons with special needs is only available at the state level. For example, the number of persons with alcohol and substance abuse is not maintained at TDHCA at the county level, so analysis could only be done at the state level. In addition, the regional number of public housing units, in which public housing residents live, is not included in the Special Needs Population section of each regional analysis because it is included in the Assisted Housing Inventory. Homeless Persons. According to 2010 population projections by Ribbon Demographics, Region 5 has approximately 2.3 percent of the statewide total of people in non-institutional group quarters, including shelters. Persons with Disabilities. Table 4-5 Region 5 persons in other group quarters, 2010 Region 5 Homeless persons Hardin 23 Jefferson 845 Orange 122 Source: Nielsen Claritas, Ribbon Demographics, According to the U.S. Census, of the total population in SETRPC/Golden Triangle, persons with disabilities account for just under 20 percent of the population. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 74 of 196

75 Table 4-6 SETRPC Persons With Disabilities 2000 Persons with HIV/AIDS. County Persons with a disability County Population Hardin 8,688 48,073 Jefferson 48, ,051 Orange 17,399 84,966 Source: Census 2000 According to the Texas Department of State Health Services 2010 Texas Integrated Epidemiologic Profile for HIV/AIDS Prevention and Services Planning, there are 1,334 persons living with HIV/AIDS in SETRPC. The area has a low rate of persons living with HIV/AIDS compared to the state as a whole, with the East Texas area accounting for only 6 percent of the total. The East Texas area has a rate of 147 persons per 100,000. Table 4-7 Region 5 Persons with HIV/AIDS, 2008 County HIV/AIDS Number HIV/AIDS Rate Population 2008 Hardin ,405 Jefferson ,201 Orange ,871 Source: Texas Department of State Health Services Texas Integrated Epidemiologic Profile for HIV/AIDS Prevention and Services Planning: HIV/AIDS in Texas. Population from US Census Population Estimates, Note: Figures do not include those unaware of their HIV infection of those who tested HIV positive solely through an anonymous HIV test. Cases diagnosed at the Texas Department of Criminal Justice System are not attributed to a geographic area. Migrant Farmworkers. In a study prepared for the US Health Resources and Services Administration, SETRPC was found to have a very low proportion of the state s Migrant and Seasonal Farmworker (MSFW) population in the State of Texas. 106 Table 4-8 SETRPC/Golden Triangle Migrant and Seasonal Farmworker Population, 2000 County MSFW Estimate Percent of statewide MSFW population Hardin 155 4% Jefferson 104 3% Orange 44 1% 106 HRSA Migrant Health Program March 2011 State of Texas Analysis to Impediments to Fair Housing Page 75 of 196

76 Emergency Assistance Foreclosure Legal Assistance Utility Assistance Disaster Assistance Rental Assistance Homebuyer Assistance Repair Local Input on Housing Assistance. According to the TDHCA Public Request Assistance Inventory for State Fiscal Year 2010, the agency received 180 public assistance requests from SETRPC. Of requests from SETRPC the three most requested categories of assistance were, in order: Rental Assistance, Repair and Weatherization, and Homebuyer Assistance. Table 4-9 SETRPC/Golden Triangle Public Assistance Request Inventory, SFY 2010 Hardin Jefferson Orange Total Housing Assessment. This housing assessment includes SETRPC current housing supply, a sample of market-rate housing costs, the housing needs and the availability of subsidized housing. Housing Supply. According to the 2010 projection, 83.3 percent of the housing units in the region are occupied. Of the total housing stock, 70.7 percent are one unit; 2.0 percent are two units; 11 percent are three or more units; and 17.4 percent are mobile homes. Boats and RVs make up the rest of the housing stock. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 76 of 196

77 Table 4-10 Region 5 Housing Supply, 2010 Hardin Co. Jefferson Co. Orange Co. Housing Units, 1 unit 14,855 14,855 14,855 Housing Units, 2 units 129 1, Housing Units, 3to 4 units 115 2, Housing Units, 5 to 19 units , Housing Units, units 212 1, Housing Units, 50+ units 320 2, Housing Units, Manufactured Housing 5,657 3,415 7,007 Housing Units, Other units Total Units 21, ,868 35,773 Source: Nielsen Claritas, Ribbon Demographics, Sample of Market Housing Costs. According to the Multiple Listing Service records for August 2010, the median home prices for Beaumont and Port Arthur are $124,300 and $110,000, respectively. 107 In addition, the fair market rent for a two bedroom unit in Beaumont-Port Arthur MSA is $692, requiring an annual income of approximately $27, Housing Need. The housing need indicators analyzed in this section include housing cost burden, substandard housing conditions and housing overcrowding for renter and owner households. The following information comes from the 2000 CHAS database updated with HISTA population projections. There were approximately 83,490 owners and renters with housing problems in Table 4-11 SETRPC/Golden Triangle Households with Housing Problems, 2009 Units Lacking Complete Plumbing/Kitchen NAME Total units all incomes 0-30% HAMFI 31-50% HAMFI 51-80% HAMFI >80% HAMFI Texas 78,129 35,692 19,997 14,463 7,977 Hardin County Jefferson County Orange County NAME Total households all incomes Households with a Cost Burden >30% 0-30% 31-50% 51-80% HAMFI HAMFI HAMFI 81-95% HAMFI > 95%HAMFI Texas 1,493, , , ,093 76, ,187 Hardin County 2,535 1, Jefferson County 20,160 9,601 5,281 3, ,123 Orange County 5,201 2,562 1, Real Estate Center at Texas A&M University, Texas Residential MLS Activity, (accessed September 24, 2010). 108 National Low Income Housing Coalition. (2010). Out of reach Retrieved from March 2011 State of Texas Analysis to Impediments to Fair Housing Page 77 of 196

78 NAME Total households all incomes Households that are Overcrowded 0-30% 31-50% HAMFI HAMFI 51-80% HAMFI 81-95% HAMFI > 95%HAMFI Texas 469, ,809 96, ,821 40, ,032 Hardin County Jefferson County 4,131 1, ,148 Orange County 1, Source: CHAS Database Identification of Impediments to Fair Housing. The Golden Triangle faces a many difficult challenges related to Fair Housing. During focus groups, many of the participants felt there was a residual negative impression based on the Young v. Martinez 109 desegregation suit where the court found that 36 counties in East Texas were continuing patterns of segregation in public housing authorities. Some of the participants believed that there was more housing choice now for those who could afford it, but the physical delineation of the minority communities remains apparent throughout the Golden Triangle. In addition, there are limited resources to rebuild from the impact of two severe hurricanes in the past five years. In many locations, despite the construction of almost 3,000 homes with federal funds, the area remains racially segregated in many parts. The rebuilding process for public housing has been funded with HOPE VI funds, tax credits and disaster recovery funds. It is clear from looking at the maps in Appendix D that there is work to do in integrating communities. This section will look at some of the potential impediments to Fair Housing in the Golden Triangle. 109 Young. V. Martinez March 2011 State of Texas Analysis to Impediments to Fair Housing Page 78 of 196

79 Home Mortgage Disclosure Act Analysis. 110 The State of Texas contracted with the National Community Reinvestment Coalition (NCRC) to conduct a portfolio and market share analysis using 2008 Home Mortgage Disclosure Act (HMDA) data for the Southeast Texas Regional Planning Commission (SETRPC) area. Hardin County, Jefferson County, and Orange County comprise The Golden Triangle. 111 Portfolio Share Analysis of All Conventional Single Family Lending in Southeast Texas. African Americans are the largest minority group in Southeast Texas, representing almost 23 percent of all households. Hispanics, Asians, and Native Americans combined account for about 7 percent of households in Southeast Texas. Appendix H Table 1a (see corresponding Chart 4-1a) of the conventional lending report shows that the portion of all prime loans received by African American borrowers was lower than the portion of loans received by non-hispanic white borrowers compared to their portion of households. African Americans received only 5.64 percent of prime loans that was considerably less than their portion of households (22.98 percent), while non-hispanic whites received 83.1 percent of prime loans that was higher than their portion of households (69.2 percent). The portion of all prime loans received by Hispanic borrowers was also lower than the loans received by non-hispanic white borrowers compared to their portion of households. 110 The AI committee acknowledges a few important points associated with Home Mortgage Disclosure Act analysis. 1. Credit scores are not considered in HMDA analyses.2. Factors that are often associated with high-cost loans: Credit scores Sparse credit history (can be an issue for immigrants) Small loans (often associated with less expensive and smaller housing or piggyback loan) Manufactured Housing Age (i.e., very young or elderly tend to have higher interest loans) High debt to income ratios High loan to value ratios Small down payment amounts Refinancing (when cashing out of equity) 111 The State hired Southwest Fair Housing Council to be the primary contractor and they contracted with the National Community Reinvestment Council on behalf of the state. This report is largely un-edited except for formatting to be consistent with the balance of the AI. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 79 of 196

80 Chart 4-1a Derived from data in Table 1a In Appendix H Table 2a (see corresponding Chart 4-2a), both low- and moderate-income (LMI) African Americans and LMI Hispanics received a disproportionate amount of high-cost loans in contrast to LMI non-hispanic whites during More than 6 percent of the high-cost loans were issued to LMI African Americans while just 1.12 percent of the prime loans were issued to LMI African Americans. Similarly, more than 3 percent of the high-cost loans were issued to LMI Hispanics while just 1.16 percent of the prime loans were issued to LMI Hispanics. In contrast, LMI non-hispanic whites received almost 10 percent of prime and 14.7 percent of highcost loans. (Note: census data does not break out Hispanic households by income level so we are unable to compare the share of loans by income level to the share of Hispanic households by income level. We are able to compare the share of loans by income level to the share of households by race and income level since census data does break out households by income level for each race). Chart 4-2a Derived from data in Table 2a March 2011 State of Texas Analysis to Impediments to Fair Housing Page 80 of 196

81 Appendix H Table 3a (see corresponding Chart 4-3a) likewise reveals a disproportionate amount of high-cost loans received by middle- and upper-income (MUI) African Americans. MUI African Americans received 8.77 percent and 4.38 percent of high-cost and prime loans, respectively. In contrast, MUI non-hispanic whites received percent and percent of prime and high-cost loans, respectively. Chart 3a Derived from data in Table 3a Substantially minority neighborhoods received a disproportionate amount of high-cost loans as shown by Table 4a of the tables displaying conventional lending by minority level of neighborhood. Substantially minority neighborhoods with 50 to 79 percent of the residents being minority contain about 10.6 percent of the owner-occupied housing units but received only 5.5 percent of prime loans. However, substantially minority neighborhoods received about 12 percent of the high-cost loans. In contrast, neighborhoods with 20 to 49 percent of minorities received a portion of prime loans (25.6 percent) that was greater than their portion of owneroccupied units (17.6 percent). These mixed racial neighborhoods received a portion of prime loans that was greater than their portion of high-cost loans (22.1 percent). Mixed neighborhoods did even better than the predominantly white neighborhoods. Predominantly white neighborhoods received a portion of prime loans equal to their share of owner-occupied housing units. Market Share Analysis of All Conventional Single Family Lending in Southeast Texas. Appendix H Table 1b (see corresponding Chart 4-1b below) shows market share ratios in Southeast Texas that are not controlled for income. The table reveals that African American borrowers are 2.16 times more likely to receive a high-cost loan than non-hispanic white borrowers during About 47 percent of all loans to African Americans are high-cost March 2011 State of Texas Analysis to Impediments to Fair Housing Page 81 of 196

82 compared to 21.7 percent of all loans to non-hispanic whites being high-cost. Dividing 46.9 percent by 21.7 percent yields the result that African Americans are 2.16 times more likely to receive a high-cost loan than non-hispanic white borrowers. Finally, Hispanics are 1.61 times more likely to receive a high-cost loan than non-hispanic whites. Chart 4-1b Derived from data in Table 1b In Appendix H Table 2b (see corresponding Chart 4-2b), LMI African Americans are twice as likely to receive a high-cost loan compared to LMI non-hispanic white borrowers (the ratio is calculated by dividing 63.8 percent of loans being high-cost for LMI African Americans by 31.8 percent of loans being high-cost for LMI non-hispanic whites). Chart 4-2b Derived from data in Table 2b Appendix H Table 3b (see corresponding Chart 4-3b below) shows that MUI African Americans are almost twice as likely to receive a high-cost loan as MUI non-hispanic whites (divide 39.5 percent of the loans being high-cost for MUI African Americans by 19.9 percent of the loans being high-cost for MUI non-hispanic whites). March 2011 State of Texas Analysis to Impediments to Fair Housing Page 82 of 196

83 Chart 4-3b Derived from data in Table 3b Residents of minority neighborhoods are much more likely than those of predominantly white neighborhoods to receive high-cost loans. Appendix Table 4b of conventional lending by minority level of neighborhood shows that residents of substantially minority neighborhoods (50 to 79 percent minorities) are 1.85 times more likely to receive high-cost loans than residents of neighborhoods with less than 10 percent minorities (divide 41.2 percent of loans being high-cost in substantially minority neighborhoods by 22.3 percent of the loans being high-cost in neighborhoods with less than 10 percent minorities). Conventional Denial Disparity Analysis. The overall denial rate (Appendix H Table 1c, see Chart 4-1c) is approximately 31 percent in Southeast Texas. The denial rate for non-hispanic white individuals is about 26 percent, and the denial rates for the African Americans and Hispanics are about 52 percent and about 40 percent respectively. African Americans and Hispanics are twice and 1.5 times more likely than non- Hispanic whites to be denied a loan. Chart 4-1c Derived from data in Table 1c March 2011 State of Texas Analysis to Impediments to Fair Housing Page 83 of 196

84 LMI African American borrowers have a denial rate of about 60 percent for loans that is 16 percentage points higher than the overall denial rate for all LMI loan applicants of about 44 percent (Appendix H Table 2c, see Chart 4-2c). LMI Asian borrowers have a similar denial rate with approximately 60 percent of applications being denied. In contrast, LMI non-hispanic white borrowers experience denial rates about 6 percentage points lower than the overall denial rate. Chart 4-2c Derived from data in Table 2c Among MUI individuals (Appendix H Table 3c, see Chart 4-3c), African American and Hispanic borrowers experience denial rates noticeably higher than those of whites. MUI African Americans are almost twice as likely to be denied as non-hispanic white borrowers. MUI African Americans have a denial rate of percent in contrast to MUI non-hispanic whites with a denial rate of percent. MUI Hispanics have a denial rate of percent in contrast to MUI non-hispanic whites with a denial rate of percent. MUI Hispanics are therefore 1.55 times more likely than MUI non-hispanic whites to be denied. Chart 4-3c Derived from data in Table 3c March 2011 State of Texas Analysis to Impediments to Fair Housing Page 84 of 196

85 Residents of substantially minority neighborhoods (50 to 79 percent minority) are 1.62 times more likely than residents of white neighborhoods (less than 10 percent minority) to be denied loans. Almost 43 percent of the applicants from substantially minority neighborhoods are denied loans in contrast to about 26 percent of the applicants from white neighborhoods. Portfolio Share Analysis of All FHA Single Family Lending in Southeast Texas. NCRC expanded the Southeast Texas analysis to include information on FHA lending. FHA loans are guaranteed by the Federal government, specifically the Federal Housing Administration (FHA). Borrowers pay an upfront premium and an annual premium to help fund FHA insurance. The FHA insurance covers the costs of defaults. In other words, the government, through FHA fees on borrowers, covers the costs of defaults. In contrast, conventional lending involves lenders themselves absorbing the costs of defaults. Often, lending institutions will protect themselves against loss by requiring borrowers to pay for private mortgage insurance. The total number of FHA loans was smaller than total number of conventional loans in Southeast Texas in Lenders issued 616 prime FHA loans and 2,612 prime conventional loans, and 203 high-cost FHA loans and 850 high-cost conventional loans in Southeast Texas. What is particularly relevant for our analysis is whether minorities are much more likely relative to whites to receive high-cost FHA loans. FHA lending has not been saddled with the abusive tricks, traps, and fees of many subprime loans. Yet, it remains the case that FHA loans are more expensive than conventional loans. If minorities receive a disproportionate amount of high-cost FHA loans and/or prime FHA loans relative to conventional loans, stakeholders should take steps to increase the amount of conventional lending to minorities. Appendix H Table 1a (see corresponding Chart 4-1.1a) for FHA lending shows that Hispanics have a high ratio of high-cost FHA loans compared to the percentage of households. With only 5 percent of the households in Southeast Texas, Hispanics received more than 10 percent of highcost FHA loans. The share of high-cost FHA loans for Hispanic or Latinos was 2.03 times greater than their share of households in Southeast Texas. Hispanics also received a slightly higher share of prime FHA loans (6.64 percent) than their share of households (5.16 percent). It should also be noted that Hispanics received a higher share of high-cost FHA loans than highcost conventional loans (10.47 percent versus 5.2 percent), and also a higher share of prime FHA loans than prime conventional loans (6.64 percent versus 4.46 percent). March 2011 State of Texas Analysis to Impediments to Fair Housing Page 85 of 196

86 Similarly, African Americans received a higher share of high-cost FHA loans than high-cost conventional loans (27.98 percent versus percent), and also a higher share of prime FHA loans than prime conventional loans (15.11 percent versus 5.59 percent). Since FHA loans are more expensive than prime loans, stakeholders should increase their efforts to make prime conventional loans to Hispanics and African Americans. In contrast to Hispanics and African Americans, non-hispanic whites received shares of highcost FHA loans (of 59 percent) that were lower than their share of households (of 69 percent) and a share of prime FHA loans (of 73 percent) higher than the share of households in Southeast Texas. Non-Hispanic whites also received a higher share of prime conventional loans (of 83 percent) than their share of households (of 69 percent). It should be noted that non-hispanic whites received higher share of prime conventional loans than prime FHA loans. Chart 4-1.1a Derived from data in Table1a Appendix H Table 2a (see corresponding Chart 4-1.2a) for FHA lending shows that LMI African Americans and LMI Hispanics received a disproportionate amount of high-cost FHA loans. More than 8 percent of the high-cost FHA loans were issued to LMI African Americans, and 5.4 percent of the prime FHA loans were issued to LMI African Americans. Similarly, about 3 percent of the high-cost FHA loans were issued to LMI Hispanics, and 1.48 percent of the prime FHA loans were issued to LMI Hispanics. In contrast to Hispanics and African Americans, LMI non-hispanic whites were issued a slightly lower percentage of high-cost FHA loans than prime FHA loans (12.32 percent of high-cost FHA loans and 13.3 percent of prime FHA loans). March 2011 State of Texas Analysis to Impediments to Fair Housing Page 86 of 196

87 Chart 4-1.2a Derived from data in Table 2a Similar to Appendix H Table 2a, Appendix H Table 3a (see corresponding Chart 4-1.3a) shows that both MUI African Americans and MUI Hispanics received a disproportionate amount of high-cost FHA loans. About 19 percent of the high-cost FHA loans were issued to MUI African Americans, and 8.86 percent of the prime FHA loans were issued to MUI African Americans. Similarly, more than 7 percent of the high-cost FHA loans were issued to MUI Hispanics, and 4.87 percent of the prime FHA loans were issued to MUI Hispanics. In contrast to Hispanics and African Americans, MUI non-hispanic whites received a share of prime FHA loans that was about 3 percentage points greater than their share of FHA loans and 13 percentage points greater than their share of high-cost FHA loans. Chart 4-1.3a Derived from data in Table 3a An examination of FHA lending trends by minority level of neighborhood shows that the predominant lending disparity is the overall share of FHA loans issued to substantially minority neighborhoods (50 to 79 percent of the residents are minority). Lenders issued slightly higher percentage of FHA loans (8 percent) to these neighborhoods than the conventional loans (7 percent). Substantially minority neighborhoods with 50 to 79 percent of the residents received only 6.8 percent of prime FHA loans and 11.8 percent of the high-cost FHA loans compared to March 2011 State of Texas Analysis to Impediments to Fair Housing Page 87 of 196

88 the portion of owner-occupied units (10.6 percent) in Southeast Texas. In contrast, neighborhoods with 20 to 49 percent of minorities received a portion of prime FHA loans (34.2 percent) that was greater than their portion of owner-occupied units (17.6 percent). These mixed racial neighborhoods received a portion of prime FHA loans that was greater than their portion of high-cost loans (32.5 percent). Market Share Analysis of All FHA Single Family Lending in Southeast Texas. The overall market share ratio (Appendix H Table 1b, see Chart 4-1.1b) shows that about 38 percent of the loans received by African Americans are high-cost FHA loans and about 34 percent of the loans received by Hispanics are high-cost FHA loans, while only about 21 percent of the loans received by non-hispanic whites were high-cost FHA loans. Thus, African Americans are 1.8 times more likely to receive a high-cost FHA loan than non-hispanic whites, and Hispanics are 1.6 times more likely to receive a high-cost FHA loan than non-hispanic whites. Chart 4-1.1b Derived from data in Table 1b LMI Hispanics are 1.7 times more likely to receive a high-cost FHA loan than LMI non-hispanic whites, and LMI African Americans are 1.44 times more likely to receive a high-cost FHA loan than LMI non-hispanic whites (Appendix H Table 2b, see Chart 4-1.2b). March 2011 State of Texas Analysis to Impediments to Fair Housing Page 88 of 196

89 Chart 4-1.2b Derived from data in Table 2b MUI African Americans are twice as likely to receive a high-cost FHA loan as MUI non- Hispanic whites, and MUI Hispanics are 1.61 times more likely to receive a high-cost FHA loan when compared to their non-hispanic white counterparts (Appendix H Table 3b, see Chart 4-1.3b). This shows that racial disparities increase as income levels increase, which in contrast was not observed with high-cost conventional lending. Chart 4-1.3b Derived from data in Table 3b FHA Loan Denial Disparity Analysis. The overall denial rate for all FHA loans (Appendix H Table 1c, see Chart 4-1.1c) in Southeast Texas is 22.4 percent. The denial rate for non-hispanic white is considerably lower at 15.9 percents. The denial rate for African Americans (29.2 percent), Hispanics (25.5 percent), and Asians (25 percent) are all higher than the overall denial rate. African Americans are 1.83 times more likely than non-hispanic whites to be denied an FHA loan and Hispanics are 1.57 times more likely than non-hispanic whites to be denied an FHA loan during 2008 in Southeast Texas. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 89 of 196

90 Chart 4-1.1c Derived from data in Table 1c The overall denial rate for LMI individuals (Appendix H Table 2c, see Chart 4-1.2c) is 27.3 percent, with the denial rate for all LMI white borrowers being 21.9 percent and LMI African Americans being 31.2 percent. LMI African Americans are 1.63 times more likely than LMI non-hispanic whites to be denied an FHA loan. Similarly, LMI Hispanics are 1.47 times more likely than LMI non-hispanic whites to be denied an FHA loan. Chart 4-1.2c Derived from data in Table 2c MUI African Americans were denied 1.88 times more often than MUI non-hispanic whites for FHA loans. Similarly, MUI Hispanics were denied 1.62 times more often than MUI whites for FHA loans. Ethnic and racial denial rate disparities increased with income levels. (Appendix H Table 3c, see Chart 4-1.3c) March 2011 State of Texas Analysis to Impediments to Fair Housing Page 90 of 196

91 Chart 4-1.3c Derived from data in Table 3c Summary and Conclusions. In Southeast Texas, the portions of all prime conventional loans received by African American borrowers (5.64 percent of prime loans versus percent of households) were lower than the loans received by non-hispanic white borrowers (90.15 percent of prime loans versus percent of households) compared to their portions of households. The share of high-cost conventional loans received by Hispanics is 1.46 times greater than their share of households even though the share of total conventional loans received by Hispanics is proportional to their share of households (about 5 percent). Both MUI African Americans and LMI African Americans are twice more likely to receive a high-cost loan than their non-hispanic white counterpart during MUI Hispanics are 1.5 times more likely to receive a high-cost loan than MUI non-hispanic white. LMI Hispanics are 1.43 times more likely to receive a high-cost loan than LMI white non- Hispanic during The denial ratio is higher when comparing MUI African Americans and MUI Hispanics to MUI non-hispanic whites than when comparing LMI African Americans and LMI Hispanics to LMI non-hispanic whites. MUI African Americans are twice more likely than MUI non- Hispanic white to be denied. LMI African Americans are 1.56 times more likely than LMI non-hispanic white be denied. Ethnic and racial disparities in denials increases as income levels increase in Southeast Texas. With only 5 percent of the households in Southeast Texas, Hispanics received more than 10 percent of high-cost FHA loans. Hispanics also received a slightly higher share of prime March 2011 State of Texas Analysis to Impediments to Fair Housing Page 91 of 196

92 FHA loans (6.64 percent) than their share of households (5.16 percent). It should also be noted that Hispanics received a higher share of high-cost FHA loans than high-cost conventional loans (10.47 percent versus 5.2 percent), and also a higher share of prime FHA loans than prime conventional loans (6.64 percent versus 4.46 percent). African Americans received a higher share of high-cost FHA loans than high-cost conventional loans (27.98 percent versus percent), and also a higher share of prime FHA loans than prime conventional loans (15.11 percent versus 5.59 percent). Since FHA loans are more expensive than prime loans, stakeholders should increase their efforts to make prime conventional loans to Hispanics and African Americans. In contrast to Hispanics and African Americans, non-hispanic whites received higher share of high-cost conventional loans than high-cost FHA loans (72 percent versus 59 percent). It should also be noted that non-hispanic whites received higher share of prime conventional loans than prime FHA loans. Racial and ethnic disparities are observed in denying applications for both conventional and FHA loans. Stakeholders should take steps to narrow disparities in both conventional and FHA lending. Concentration and Racial Segregation. The demographic materials in Appendix D show a clear pattern of concentration based on racial classification. Beaumont s population is 42.6 percent Non Hispanic White and percent Black. The dissimilarity index shows that in order to obtain racial integration, percent of the Black community would need to move. 112 The materials provide communities with a way to target concentrations of racial classes. In order to break up the racial concentrations local jurisdictions should provide the ability to relocate individuals using disaster recovery funds and in entitlement communities, HOME and CDBG dollars. When you look at the map of Beaumont, it shows a significant majority of the neighborhood blocks as either a concentration of minorities exceeding 65 percent or less than 35 percent 112 Appendix D category of communities 50K+ data and maps. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 92 of 196

93 minorities in the neighborhood block In the Housing Guidelines for Round 2 funds, this would be a community that could and should be targeted for Round 2 disaster recovery funds for the Homeowner Opportunity Program. This program will assist in allowing qualified applicants in the most heavily concentrated areas for race and poverty to receive federal assistance in moving out of these areas into high opportunity or more racially diverse areas. This information is provided for communities to use in planning how to address concentration patterns in spending federal funds. Each community over 10,000 has maps available to it that highlight the racial makeup of their community by census tract. Not In My Backyard The Impediment of NIMBYism. A common problem for all communities is the organized public opposition to building lowincome, public, or affordable housing. This issue was identified by the focus group in Beaumont and Port Arthur. While there is public housing in each community it tends to be built in areas that are traditionally minority or low-income neighborhoods. Some participants said they raise this issue frequently and receive support from elected officials on a theoretical level. However when a development is proposed outside of the traditional areas by the housing authority or private developers, the uproar from the neighborhood residents causes their city to back down. Typically the standard reasons for not accepting affordable housing that are brought forward are decrease in property values, an increase in crime, etc. TDHCA also confirms that this type of opposition has been raised with respect to multi-family developments under its programs. Discrimination in Housing Markets. No direct testing of the real estate industry was done as part of this AI. However, persons interviewed in the community identified a pattern of discrimination in private sector real estate markets toward racial minorities. Most of the interviewees agreed that they were aware of instances of illegal housing discrimination. Most mentioned steering by realtors of clients that were both white and African American. In fact, two of the interviewees had direct experience of steering by realtors. Others mentioned For Rent ads in local newspapers that clearly stated No HUD and No Housing. Although they are cognizant that this is not necessarily illegal they 113 Ibid. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 93 of 196

94 believe that the assumption is made by the population in general that HUD and Housing is synonymous with African American. A report by the National Fair Housing Association, provided information on the treatment of the minority testers they sent to look for rental units in Houston. 114 The results of the 2005 undercover test group was that black testers were substantially less likely to be told about available units, called back, or shown properties than their white test group counterparts. 115 The potential discrimination is not just limited to rental markets. Another report by the National Fair Housing Alliance titled Dr. King s Dream Denied: Forty Years of Failed Federal Enforcement demonstrated that in 12 cities across the United States the report found that in the twelve metropolitan areas investigated to date, NHFA s testing revealed discriminatory steering practices and illegal behaviors that are both striking and pervasive. 116 The Katrina report is included as one of the metropolitan areas that make up this report. The Justice Department has settled a lawsuit for $120,000 with a major Real Estate firm in Chicago related to steering of minority clients toward minority neighborhoods and away from Non Hispanic White neighborhoods. 117 Collectively, even if not all in this area, it supports the concept that steering creates an impediment to integrated housing patterns. There has been no state testing to confirm the pattern is true and that in itself could be an impediment to Fair Housing. Whether governments have failed to enforce the Fair Housing Act and the Texas Property Code Chapter 301 (Texas Fair Housing Act) as written should be reviewed. Challenges Presented by Local Ordinances and Restrictions. During the interview process, at least one of the interviewees made reference to lot size and zoning as one of the problems for not moving forward with affordable housing. In looking at the Golden Triangle, some communities have no regulations, no building codes and permit through the county rather than a local government. 118 One of the neutral mechanisms to potentially prevent racial integration of communities is to establish standards that increase the cost of 114 No Home for the Holidays Discrimination for Katrina Evacuees 2005, National Fair Housing Alliance 115 Ibid 116 titled Dr. King s Dream Denied: Forty Years of Failed Federal Enforcement, National Fair Housing Alliance April 8, Justice Department Obtains $120,000 Discrimination Lawsuit Against Chicago Area Realtors, Feb. 18, 2009 retrieved from Information provided by URS Architects, Engineers and Planners and made available to SETRPC in chart format based on ordinance reviews and interviews with local staff and inspectors. The information was valid as of June 10, March 2011 State of Texas Analysis to Impediments to Fair Housing Page 94 of 196

95 building affordable housing encouraging people who are building smaller homes to look elsewhere. No direct investigation as to the racial impact on the zoning restrictions mentioned was conducted for this AI. Had we conducted this investigation, it would have required that we look at the number of permits issued in communities with restrictions on lot sizes and minimum home sizes and analyze the number of racial minorities or persons with disabilities that have built in that community since the restrictions were put in place measured against other nearby communities or the percentage of the existing minority population. As TDHCA has rebuilt homes in Port Arthur, we have had at least 46 applicants who may have been denied assistance to rebuild their home as their lots were considered to be substandard most due to the lot being considered too small. The City did in most of the cases look for alternative lots, but at some point when the alternative lots were gone, it increased the cost to the program. 119 The table below shows the communities that have a minimum lot size equal to or greater than Port Arthur. Table 4-12 Lot Sizes in SETRPC Location Lot Width Lot Minimum Square Footage Port Arthur 50 7,000 Sabine Pass 50 7,000 Port Acres 50 7,000 Silsbee 65 7,500 Bridge City 65 7,800 Lumberton 75 9,000 Another mechanism that has been determined to have potential Fair Housing violations is a minimum square footage for homes. This not only increases costs, but can also bar manufactured housing from a community, both potentially affecting low income persons which can disproportionably impact racial minorities. Several communities have requirements that exceeded the floor plans built in Rounds I and II of Hurricane Rita. The SETRPC program in Ike Round 1 adjusted to meet most communities by increasing their minimum size home for the program. At the time, all but one city would have been included in the 1,300 square foot home. 119 Based on information supplied by TDHCA Rita Round II supplier ACS. Information was valid as of October 25, Of the applicants with the substandard lot 23 were served. Some were not served for other reasons including lack of program funds. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 95 of 196

96 The following table includes communities with minimum square footages for homes over 1,000 square feet. Table 4-13 Minimum Square Footage Requirements over 1000 sq feet Municipality Groves 1,200 Lumberton 1,200 Nederland 1,200 Port Neches 1,300 Taylor Landing 2,000 Minimum Square Footage for Home There may actually not be issues with any of these requirements as long as they do not have the effect of keeping out protected classes including racial minorities and persons with disabilities. If it appears that these local ordinances and restrictions have lessened the number of protected classes from building in communities the purpose of the requirements would need to be examined by the local community to see if they had a discriminatory affect. Current ordinances and policies in the region have not been reviewed to identify all potential discriminatory issues. To make it easier for local communities to conduct a broad review of common examples the list below are examples of other ordinances and policies found in legal actions that could have a discriminatory effect. These include: Definitions of family (who can live in housing -- extended families?; children?) Density requirements/limits Parking requirements/limits Signage / notification requirements for proposed developments that treat certain projects differently Lot size requirements Minimum square footage requirements Building code requirements that increase the cost of residences (for example, all masonry construction requirements) Limits on the number of bedrooms for multi-family dwellings March 2011 State of Texas Analysis to Impediments to Fair Housing Page 96 of 196

97 Limits on second / accessory units Anti-multifamily moratoria Zoning as commercial or industrial if services or other non-residential activities offered on-site (triggers different building/zoning requirements than for residential) Requiring conditional use permits for residential facilities Dimensional requirements for commercial/business zones that are not conducive to residential development Street and utility requirements on new building that can increase building costs (e.g., street width, curbing type, sidewalk surfaces for internal development spaces) Lack of Knowledge about what Constitutes Fair Housing Violations. In addition to claims of real estate steering and rental discrimination, the focus groups indicated that the Fair Housing Act remains a mystery to much of the public. Even more clear is that not many people, even if they believe they are being discriminated against, know how to take action to file a complaint or report a violation. In Section 7 of this document a list of all the housing discrimination complaints filed with HUD are listed by county. The Golden Triangle region has nearly 400,000 people living in the community. During interviews and in focus groups in the area, the individuals that participated raised housing discrimination issues and yet from January 2005 through September 2010 only 8 complaints were made to HUD from this region. In addition, the Texas Workforce Commission received 692 complaints (9 as shown in Section 7.) in the total hurricane impacted region (61 counties). As an indication that the public may not understand the issues, of the 692 complaints 323 of them received findings of no cause. 120 Looking at Project Placement. In reviewing the projects contained in Appendix F, two issues become obvious. Most CDBG funds not including disaster funds, whether supplied by the State or used by entitlement communities go almost exclusively to infrastructure projects. The difficulty of determining how the funds are spent is compounded by the manner in which data is reported. Looking at the table very few infrastructure projects have a clear delineation of whom they are directly serving and 120 Housing Discrimination Complaints Section 7. herein. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 97 of 196

98 where the project is located. Without an ability to reference the population served (other than the generic 51 percent plus LMI language), it is difficult to determine who is receiving the benefit of the projects. Because so many of the regular CDBG funds are listed in this manner at both the entitlement jurisdiction and the State the information is not useable to determine if a community is using funds to further fair housing, or if communities with concentrations of protected classes are being underserved In addition, in reviewing Appendix F, very little of non-disaster CDBG funds go to housing. In part this may be because of available funds for infrastructure. A state or local preference for infrastructure use may have been present, but the CDBG Action Plan has a policy that says it supports the use of CDBG funds for the construction of housing. The limitations of funds available and the competitive nature of the funds may factor into the use of funds. Despite the CDBG Action Plan expressing support for building housing with CDBG funds, competitive application rounds should be reviewed to see if they favor infrastructure over housing in scoring. The impediment here may actually be the lack of specificity and record keeping by local and state governments for use in conducting their analysis of impediments to fair housing. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 98 of 196

99 SECTION 5. LOWER RIO GRANDE VALLEY. This section is not intended to provide a complete AI for each community in the Lower Rio Grande Valley. In fact, some communities in the region may find more in with common the small community section where the focus is on cities of less than 2,500, provides more similar conditions that they are facing and looks at similar ways to overcome Fair Housing impediments. Given the racial composition of this region, much of the Fair Housing issues will focus on the Colonias, migrant farm workers and national origin issues. Part of the Fair Housing questions will center on infrastructure issues and how federal funds are spent. Even with the predominate Hispanic make-up, there can still be biases within the private sector as are demonstrated in access to private capital and real estate transactions. This section will more clearly develop the local demographic information and look at the potential impediments to Fair Housing that exist in the area. Historical Recap. Located at the southeastern tip of Texas, the Lower Rio Grande Valley includes Cameron, Hidalgo and Willacy Counties as well as the cities of Brownsville, Harlingen, Weslaco, San Benito, Edinburg, Mission, and Pharr. The ethnic history of this region is dominated by the predominant indigenous Hispanic population, its proximity to Mexico, the development of agriculture and ranching and the need for labor. The historical racial and ethnic groups populating the Lower Rio Grande Valley include Native Americans, Spanish and Mexicans. In fact the percentage of Hispanic population in the Valley is more than twice that of the state as a whole. 121 The black population in the Valley is very low at less than one percent. The Spanish occupied the area in the mid-1700s and established cattle ranches. Brownsville was the first American settlement. Mass migration of mid-westerners and Mexican immigrants resulted in rapid population growth in the early twentieth century. By March 2011 State of Texas Analysis to Impediments to Fair Housing Page 99 of 196

100 the population of the Valley numbered approximately 176,000. The 1940s saw urbanization take hold in the region, although much of the area is still agricultural. Growth continued through the following decades; however, Hidalgo and Starr Counties were consistently ranked as two of the poorest counties in the entire country during the 1980s and 1990s. 122 Some of this poverty is attributed to the establishment of colonias by developers and the movement of poor Mexican Americans and immigrants from Mexico and Central America into these substandard residential neighborhoods. Colonias developed beginning in the early 1900s and were established as towns by land speculators. A few colonias began as small communities of farm laborers employed by a single rancher or farmer. However the majority of colonias emerged in the 1950 s as developers discovered a large market of aspiring homebuyers who could not afford to purchase in cities or who did not have access to conventional finance mechanisms. 123 Many of these unincorporated subdivisions lay in floodplains. The plots were small, had little to no infrastructure and were affordable. Furthermore many colonias lack electricity, plumbing, potable water and other amenities. A significant number of colonias are purchased through a contract for deed in which buyers pay a low down payment and low monthly payments and do not receive a title to the property until all payments are complete. Contracts for deed have been a significant source of abusive loan tactics and have been identified as the most common form of predatory lending in the Lower Rio Grande Valley. 124 Many of the buildings in colonias are constructed by residents and substandard construction is the norm. Texas is the state with the largest number of colonias (2,294). The overwhelming majority of these house Hispanic residents. Due to a limited supply of affordable housing in border areas colonias continue to attract many people, primarily those who come from lower economic backgrounds. Concerns for public health and quality of life are significant in colonias due to the lack of infrastructure especially wastewater and potable water. Even when water lines and sewer systems are in place many cannot access the services because their homes do not meet county State of Texas Low Income Housing Action Plan and Annual Report: Colonia Action Plan 124 See McAllen Focus Group in this AI March 2011 State of Texas Analysis to Impediments to Fair Housing Page 100 of 196

101 building codes. A lack of public funding for the improvement of colonias exacerbates the problems for people who live in these areas. 125 Regional Demographic Recap. The area represented by the Lower Rio Grande Valley Development Council had a population of 924,772 according to the 2000 Census but estimates from put the population at well over 1,000, The largest county is Hidalgo County with a total population of 706, Population. The Lower Rio Grande Valley is anticipated to have dramatic growth between now and 2040 according to the state demographers at the University of Texas at San Antonio. Under the Zero Net Migration formula ( ) population is expected to more than double assuming rates of net migration equal to one-half of totals (0.5 ) by Year Non Hispanic White Table 5-1 Projected Population LRGVDC Region Black Hispanic Other Total ,088 3, ,045 6, ,772 Year Non Hispanic White scenario Non Hispanic White 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total , ,299 3,717 3, ,081 1,063,098 7,250 8,779 1,099,580 1,181, ,193 98,200 4,059 4,075 1,163,898 1,358,585 8,208 12,153 1,272,358 1,473, ,202 80,433 4,163 4,043 1,524,736 2,022,496 9,200 20,626 1,622,301 2,127, American FactFinder, Hidalgo County and Cameron County, Texas, American Community Survey 3-year estimates. U.S. Census Bureau retrieved at American FactFinder, Hidalgo County, Texas, American Community Survey 3-year estimates. U.S. Census Bureau retrieved at These projections assume the One-Half Migration (0.5). According to the State Demographer: This scenario has been prepared as an approximate average of the zero () and (1.0) scenarios. It assumes rates of net migration one-half of those of the 1990s. The reason for including this scenario is that many counties in the State are unlikely to continue to experience the overall levels of relative extensive growth of the 1990s. A scenario which projects rates of population growth that are approximately an average of the zero and the scenarios is one that suggest slower than but steady growth. Information for Table 4-1 pulled from Table 2.7 Population for the State of Texas and Council of Government Regions in Texas and Projections to 2040 Assuming Alternative Projection s SETRPC Region data March 2011 State of Texas Analysis to Impediments to Fair Housing Page 101 of 196

102 Age. Table 4-2 shows the population s anticipated aging according to the demographers located at the University of Texas at San Antonio for the LRGDV Region. This table demonstrates that the percentage of the population who is over sixty five will increase in raw numbers within the age category and as a percentage of the population as a whole. 129 The 2040 data assumes rates of net migration equal to one-half of (.5 ) and is neither the least nor the most conservative estimate by the demographers. Age Group Non Hispanic White 2000 Non Hispanic White 2040 Black 2000 Table 5-2 Age by Age Group and Ethnicity Black Hispanic Hispanic 2040 Other 2000 Other 2040 Total 2000 Total 2040 < Median Poverty and Income. About 83.3 percent of Region families live in urban areas. Table 5-3 depicts the number of families living below the poverty line in LRGV. Table 5-3 LRGV Poverty Figures, 2010 Families At or Above Poverty Families Below Poverty County Number Percent Number Percent Cameron 68, % 30, % Hidalgo 124, % 56, % Willacy 2, % 1, % Source: Nielsen Claritas, Ribbon Demographics, Table 2.14 Percentage of Population for the State of Texas and Council of Government Regions in Texas by Age and Race/Ethnicity of the Population and Median Age by Race/Ethnicity in 2000 and Projections to 2040 Assuming Alternative Projection s HGAC Region data Region 11 is the Texas Comptroller s 13 Uniform State Service Regions of Texas and the primary way funds are distributed to non-entitlement communities by TDHCA based on a Regional Allocation Formula as required under Texas Government Code We will use the three county information when available, but if not available we will refer to Region 11. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 102 of 196

103 Region 11 Household Incomes. Extremely Low Income (0-30%), 19% Very Low Income (31%-50%), 17% Low Income (51%-80%), 19% Moderate Income (81%-95%), 0% segment of the population. Higher Income (over 95%), 45% The pie chart to the left depicts the income breakdown of the 377,276 households in the region. Approximately 55 percent of households are low income. The 2000 CHAS figures for moderate and higher income household in Region 11 indicate that there are only 199 persons with income between percent of the AMFI. TDHCA has been unable to get more accurate information for this There are 523,671 individuals living in poverty in the region, which makes up 33.3 percent of the regional population. According to the Texas Comptroller s Texas In Focus report, the top five occupations with high projected job growth in Region 11 are low paying (average annual wage of $16,103) and do not require a post-secondary education. 131 Additionally, floodplains in the colonias in Webb and Hidalgo counties have discouraged investors and developers from investing in the region s rural areas. 132 Special Needs Populations. Some data for persons with special needs is only available at the state level. For example, the number of persons with alcohol and substance abuse is not available at the county level, so analysis could only be done at the state level. In addition, the regional number of public housing units, in which public housing residents live, is not included in the Special Needs Population section of each regional analysis because it is included in the Assisted Housing Inventory at the end of each regional analysis Homeless Persons. According to 2010 population projections by Ribbon Demographics, there are only 1,101 persons that are homeless, in non-institutional group quarters. LRGVDC also experienced damage from Hurricane Dolly, which hit the Lower Rio Grande area in July Households affected by the hurricane have unmet needs. 131 Texas Comptroller of Public Accounts, Texas in Focus: South Texas, August (accessed October 6, 2010). 132 US Government Accountability Office, Report to Congressional Committees, Rural Homelessness: Better Collaboration by HHS and HUD Could Improve Delivery of Services in Rural Areas, July March 2011 State of Texas Analysis to Impediments to Fair Housing Page 103 of 196

104 Persons with Disabilities. Table 5-4 LRGVDC persons in other group quarters, 2010 Homeless persons Cameron 639 Hidalgo 452 Willacy 10 Statewide Homeless Population Total 1,101 67,698 Source: Nielsen Claritas, Ribbon Demographics, According to the US Census, of the total population in the LRGVDC area, persons with disabilities account for approximately 13 percent of the population of Region 11. Persons with HIV/AIDS. Tale 5-5 Persons with Disabilities County Number of Persons with Disabilities Cameron 65,392 Hidalgo 105,969 Willacy 3,596 Source: Census 2000, Urban defined by presence of an MSA. According to the Texas Department of State Health Services 2010 Texas Integrated Epidemiologic Profile for HIV/AIDS Prevention and Services Planning, there are 1,849 persons living with HIV/AIDS in Region 11. Approximately 80.9 percent of this population is living in urban areas, with the remaining 19.1 percent in rural areas. Region 11 has a fairly low rate of persons living with HIV/AIDS compared to the state as a whole, with the US Mexico Border area accounting for just 5.5 percent of the total, and a rate of 137 persons per 100,000. Note that Texas DSHS defines the border area as those 32 counties within 100 kilometers of the US- Mexico border, a standard definition in health and human services reports. Table 5-6 Region 11 Persons living with HIV/AIDS, 2008 County HIV/AIDS Number HIV/AIDS Rate Population 2008 Cameron ,164 Hidalgo ,275 Willacy ,382 Total 1,417 1,030,821 Source: Texas Department of State Health Services Texas Integrated Epidemiologic Profile for HIV/AIDS Prevention and Services Planning: HIV/AIDS in Texas. Population from US Census Population Estimates, Note: Figures do not include those unaware of their HIV infection of those who tested HIV positive solely through an anonymous HIV test. Cases diagnosed at the Texas Department of Criminal Justice System are not attributed to a geographic area. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 104 of 196

105 Colonia Residents. The Office of the Attorney General maintains an extensive Colonia Geographic Database, accounting for over 1,800 colonia areas in 29 counties. The table below depicts the estimated colonia population in Region 11. The region contains a very large portion of the state s colonia population, accounting for over 73.2 percent of the 418,406 residents, with a large portion residing in Hidalgo County. 134 Migrant Farmworkers. Table 5-7 LRGV Colonia Population, estimated 2010 Colonia Population Estimate Cameron 100,971 Hidalgo 138,458 Willacy 3,465 Total 242,894 Statewide total 418,406 In a study prepared for the US Health Resources and Services Administration, Region 11 was found to have a very high proportion of the state s Migrant and Seasonal Farmworker (MSFW) population, accounting for 34.0 percent of the 361,414 MSFWs in the state of Texas. 135 The high farmworker population correlates with a dominant agricultural industry in Region 11, an area which produces large amounts of the nation s sugarcane, sorghum for grain, cotton, citrus, and onions. The crop and animal production sectors provided 20,000 jobs to Region 11 in Below is the estimate of MSFW in the three county area of LRGV. Table 5-8 Migrant and Seasonal Farmworker Population, LRGVDC MSFW Estimate Cameron 15,568 Hidalgo Willacy 4, Texas Office of the Attorney General, Border Colonia Geographic Database 135 Migrant and Seasonal Farmworker Enumeration Profiles Study TX, Larson, Alice, Texas Comptroller of Public Accounts, Texas in Focus: South Texas, August (accessed October 6, 2010). 137 Migrant and Seasonal Farmworker Enumeration Profiles Study TX, Larson, Alice, March 2011 State of Texas Analysis to Impediments to Fair Housing Page 105 of 196

106 Emergency Assistance Foreclosure Legal Assistance Utility Assistance Disaster Assistance Rental Assistance Homebuyer Assistance Repair Local Input on Housing Assistance. According to the TDHCA Public Assistance Inventory for SFY2010, the agency received 18,821 public assistance requests from Region 11, which accounted for 8.9 percent of total annual requests. Of requests from Region 11, the three most requested categories of assistance were, in order: Utility Assistance, Repair and Weatherization and Rental Assistance. Table 5-9 Region 11 Public Assistance Request Inventory, SFY 2010 Affordable Housing Need. Cameron Hidalgo Willacy Total When analyzing local housing markets and developing strategies for meeting housing problems, HUD suggests the consideration of several factors. These factors include how much a household spends on housing costs (also called Housing Cost Burden), the physical condition of the housing and whether or not the unit is overcrowded. The following table reveals the number and percentage of households with at least one housing need by income category and household type. Of renter households, those at percent AMI are the most likely to have at least one housing problem. Of owner households, those at 0-30 percent AMI are the most likely to have at least one housing problem. Physical Inadequacy (Lack of Kitchen and Plumbing Facilities). The table below breaks out the information for the LRGVDC area. As you can tell from the information, those who have the least ability to change their situations are more likely to live in an environment that would not be considered acceptable to many people. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 106 of 196

107 Percent Table 5-10 Number of Units Lacking Kitchen and/or Plumbing by Affordability Category LRGV, Units Lacking Complete Plumbing/Kitchen Extremely Very Low All Low Income Income (31- Low Income Higher Incomes incomes (0-30%) 50%) (51-80%) (81% and up) Willacy County Cameron County 3,330 1,629 1, Hidalgo County 7,420 4,857 1, Total 11,146 6,742 2,830 1, Source: CHAS The state defines the standard condition of housing as properties that meet the Federal Housing Quality Standards, or the State Colonia Housing Standards, as applicable. Substandard condition but suitable for rehabilitation refers to properties that do not meet the above standards but are not sufficiently deteriorated to justify demolition or replacement. These definitions refer to the condition of properties prior to the receipt of assistance. Bar Graph 5-1 shows the distribution of substandard housing by income group. Households in the lowest income group earning 30 percent AMFI or less have the highest percentage of physically inadequate rental housing. The bar graph shows the percentage of households with housing problems in each income category compared to households in the corresponding income category. Bar Graph 5-1 Renter Households with Substandard Housing by Income Category Texas, % % 1.1% 0.9% 0.9% % AMI or less 30.1%-50% AMI 50.1%-80% AMI Income Category 80.1%-95% AMI 95.1% AMI and above Source: CHAS statewide figures. The same trend holds true for owner households. Bar Graph 5-2 shows the percentage of households with housing problems in each income category compared to households in the corresponding income category. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 107 of 196

108 Percent Percent Bar Graph 5-2 Owner Households with Substandard Housing by Income Category Texas, % 0.9% 0.9% 0.6% 0.4% 30% AMI or less 30.1%-50% AMI 50.1%-80% AMI Income Category 80.1%-95% AMI 95.1% AMI and above Source: CHAS statewide figures. Housing Cost Burden. A cost burden is identified when a household pays more than 30 percent of its gross income for housing costs. When so much is spent on housing, other basic household needs may suffer. As Bar Graph 5-3 shows, a majority of renter households in the lowest two income categories, totaling more than 551,000 households, is burdened by paying an excess portion of income toward housing. This is much greater than in the highest income category, above 95 percent AMFI, where only 0.4 percent of households, or 3,480 households, experience the problem. The bar graph shows the percentage of households with cost burden in each income category compared to households in the corresponding income category. Bar Graph 5-3 Renter Households with Housing Cost Burden by Income Category Texas, % % 4.5% 1.0% 0.4% 30% AMI or % AMI % AMI % AMI 95.1% AMI less Income Category and above Source: CHAS statewide figures. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 108 of 196

109 Percent As shown in the following bar graph, housing cost burden affects 217,070, or 58.2 percent of owner households in the lowest income category. This figure, representing a majority, is much higher than the 1.1 percent of households affected in the highest income category. Bar Graph 5-4 illustrates the direct correlation between an owner household s income category and an owner household s likelihood of experiencing this problem. The graph shows the percentage of households with cost burden in each income category compared to households in the corresponding income category. 7 Bar Graph 5-4 Renter Households with Housing Cost Burden by Income Category Texas, % % 11.7% 5.3% 1.1% 30% AMI or less % AMI % AMI % AMI 95.1% AMI and Income Category above Source: CHAS statewide figures. LRGV is consistent with a disproportionate share of those with a significant cost burden in the lower income areas as Table 5-12 demonstrates. Table 5-11 LRGVDC Households with a Cost Burden >30% Extremely Low Income Very Low Income Low Income Higher Incomes All incomes (0-30%) (31-50%) (51-80%) (81% and up) Willacy County 1, Cameron County 17,202 8,549 4,061 2,783 1,809 Hidalgo County 23,535 12,340 5,288 3,355 2,552 Total 41,781 21,572 9,541 6,226 4,442 Overcrowding. Source: CHAS Overcrowded housing conditions occur when a residence accommodates more than one person per each room in the dwelling. Overcrowding may indicate a general lack of affordable housing in a community where households have been forced to share space, either because other housing units are not available or because the units available are too expensive. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 109 of 196

110 Percent Percent Lower income renter households experience overcrowded conditions more frequently than higher income households. Over 10.2 percent of renter households in the extremely low income category and 11.5 percent of renter households in the very low income category are afflicted by overcrowding. Bar Graph 5-5 shows the percentage of households experiencing overcrowding in each income category compared to households in the corresponding income category. Bar Graph 5-5 Renter Households with Incidence of Overcrowding by Income Group Texas, % 11.5% 7.9% 6.2% 3.4% % AMI or less % AMI % AMI % AMI 95.1% AMI Income Category and above Source: CHAS statewide figures. Lower income owner households also experience overcrowded conditions more frequently than higher income owner households. More than 6.5 percent of owner households earning less than 50 percent HAMFI live in overcrowded conditions compared to 4.6 percent of owner households over 80 percent HAMFI. Bar Graph 5-6 shows the percentage of households experiencing overcrowding in each income category compared to households in the corresponding income category. Bar Graph 5-6 Owner Households with Incidence of Overcrowding by Income Group Texas, % 6.5% 6.2% % % % AMI or less % AMI % AMI % AMI 95.1% AMI and above Income Category Source: CHAS statewide figures. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 110 of 196

111 In the LRGVDC, the problem of overcrowding cuts across all income levels. While this may be more of a family custom, it could demonstrate that housing in the region may need additional resources to provide adequate living space. All incomes Table 5-12 LRGVDC Households that are Overcrowded Very Low Extremely Low Income (31- Income (0-30%) 50%) Low Income (51-80%) Higher Incomes (81% and up) Willacy County 1, Cameron County 17,302 5,228 3,714 3,641 4,719 Hidalgo County 26,515 8,092 5,710 6,068 6,645 Total 44,897 13,681 9,668 9,894 11,654 Source: CHAS Identification of Impediments to Fair Housing. The Lower Rio Grande Valley region ( LRGV ) has a different set of impediments than much of the hurricane impacted areas. While most areas have flooding problems, the LRGV Region has multi county drainage system that leaves some lower income areas out of the system resulting in perennial floods with tropical storms and hurricanes. With the racial make-up of the LRGV the concentration of racial minorities is not as significant an issue. However, areas where some residents are steered into Colonias or other low income areas present similar Fair Housing issues. The extent of belief that there is public corruption makes it difficult for people to believe that funds provided are going to make it to the people who need it most and creates a confidence issue in government and how programs are administered. The LRGV has similar impediments as other communities with access to private capital and steering, although both take a slightly different look here. Certainly the issue of how to work with Colonias is one of the key housing problems of the region. A key problem that the State is trying to address is the system of contract for deeds in Colonias. To the extent that the people in Colonias are denied access to infrastructure, low standard housing conditions, and enforcement against developers taking advantage of people who have little alternatives but to move into the Colonias, this could be the most significant Fair Housing issue in the region. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 111 of 196

112 Home Mortgage Disclosure Act Analysis. The State of Texas contracted with the National Community Reinvestment Coalition (NCRC) to conduct a portfolio and market share analysis using 2008 Home Mortgage Disclosure Act (HMDA) data for the Lower Rio Grande Valley Development Corporation area. Cameron, Hidalgo, and Willacy Counties comprise this region. 138 Portfolio Share Analysis of All Conventional Single Family Lending in Lower Rio Grande Valley, Texas. Hispanics are the largest minority group in Lower Rio Grande Valley, representing percent of all households. Asians, Native Americans, and African Americans combined account for 1.46 percent of households in the Lower Rio Grande Valley. Table 1a (see corresponding Chart 1a) of the conventional lending report shows that the portion of all prime loans received by Hispanic borrowers was lower than non-hispanic white borrowers compared to their portion of households. Hispanics received percent of prime loans that was lower than their portion of households (79.18 percent), while non-hispanic whites received percent of prime loans that was slightly higher than their portion of households (19.43 percent). Hispanic borrowers also received a disproportionally high percentage of high-cost loans (91.56 percent), while Hispanics constitute percent of Lower Rio Grande Valley s households. As a comparison, non- Hispanic whites received only 6.12 percent of all high-cost loans while they comprised percent of all households during Asians were overrepresented in prime loans (2.93 percent of prime loans versus 0.60 percent of households) and received a similar portion of high-cost loans (0.57 percent) compared to their portion of households (0.60 percent of households) while African-Americans were just a little overrepresented in prime loans (0.56 percent of prime loans versus 0.39 percent of households). 138 The State hired Southwest Fair Housing Council to be the primary contractor and they contracted with the National Community Reinvestment Council on behalf of the state. This report is largely un-edited except for formatting to be consistent with the balance of the AI. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 112 of 196

113 Chart 5-1a Derived from data in Table 1a Appendix H Table 2a (see corresponding Chart 5-2a) shows that low- and moderate-income (LMI) Hispanics received a disproportionate amount of high-cost loans. More than 17 percent of the high-cost loans were issued to LMI Hispanics while just 5.1 percent of the prime loans were issued to LMI Hispanics. (Note: Census data does not break out Hispanic households by income level so we are unable to compare the share of loans by income level to the share of Hispanic households by income level. We are able to compare the share of loans by income level to the share of households by race and income level since Census data does break out households by income level for each race). Chart 5-2a Derived from data in Table 2a Appendix H Table 3a (see corresponding Chart 5-3a) likewise reveals a disproportionate amount of high-cost loans received by middle- and upper-income (MUI) Hispanics. MUI Hispanics received about 71 percent and 65.3 percent of high-cost and prime loans, respectively. In contrast, MUI non-hispanic whites received 5.34 percent and percent of high-cost and prime loans, respectively. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 113 of 196

114 Chart 5-3a Derived from data in Table 3a Predominantly minority neighborhoods received a disproportionate amount of high-cost loans as shown by Table 4a of the tables displaying conventional lending by minority level of neighborhood. Predominantly minority neighborhoods with 80 to 100 percent of the residents being minority contain about percent of the owner-occupied housing units but received percent of the high-cost loans. In contrast, neighborhoods with 50 to 79 percent of minorities received a portion of high-cost loans (23 percent) that was almost half of their portion of owner-occupied units (42 percent). These substantially minority neighborhoods received a portion of prime loans (35 percent) that was greater than their portion of high-cost loans. Market Share Analysis of All Conventional Single Family Lending in Lower Rio Grande Valley, Texas. Appendix H Table 1b (see corresponding Chart 5-1b) shows market share ratios in Lower Rio Grande Valley that are not controlled for income. The table reveals that Hispanics are 2.6 times more likely to receive a high-cost loan than non-hispanic whites. About 51 percent of all loans to Hispanics are high-cost compared to 19.6 percent of all loans to non-hispanic whites being high-cost. Dividing 50.7 percent by 19.6 percent yields the result that Hispanics are 2.6 times more likely to receive a high-cost loan than non-hispanic whites during March 2011 State of Texas Analysis to Impediments to Fair Housing Page 114 of 196

115 Chart 5-1b Derived from data in Table 1b In Appendix H Table 2b (see corresponding Chart 5-2b), LMI Hispanics are 1.19 times more likely to receive a high-cost loan compared to LMI non-hispanic white borrowers. (The ratio is calculated by dividing 73.2 percent of loans being high-cost for LMI Hispanics by 61.5 percent of loans being high-cost for LMI non-hispanic whites). Chart 5-2b Derived from data in Table 2b Appendix H Table 3b (see corresponding Chart 5-3b) shows that, MUI Hispanics are 2.57 times more likely to receive a high-cost loan than MUI non-hispanic whites (divide 47.3 percent of the loans being high-cost for MUI Hispanics by 18.4 percent of the loans being high-cost for MUI non-hispanic whites). Ethnic disparities in lending increase as income levels increase. The disparity ratio is higher when comparing MUI Hispanics to MUI non-hispanic whites than when comparing LMI Hispanics to LMI non-hispanic whites. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 115 of 196

116 Chart 5-3b Derived from data in Table 3b Residents of minority neighborhoods are much more likely than those of predominantly white neighborhoods to receive high-cost loans. Appendix H Table 4b of conventional lending by minority level of neighborhood shows that residents of substantially minority neighborhoods (50 to 79 percent minorities) are 1.59 times more likely to receive high-cost loans than residents of neighborhoods with 20 to 49 percent minorities (divide 34.7 percent of loans being high-cost in substantially minority neighborhoods by 21.8 percent of the loans being high-cost in neighborhoods with 20 to 49 percent minorities). Conventional Denial Disparity Analysis. The overall denial rate (Appendix H Table 1c, see Chart 5-1c) is approximately 47 percent in Lower Rio Grande Valley. The denial rate for non-hispanic white individuals is about 32 percent, and the denial rate for Hispanics is about 50 percent, which shows that Hispanics are 1.53 times more likely to be denied (divide 50 percent of the denial rate for all Hispanics by 32 percent of the denial rate for all non-hispanic whites). The denial ratio for African Americans is 1.5 times higher than non-hispanic whites (divided percent of the denial rate for all African Americans by 32 of the denial rate for all non-hispanic whites). Chart 5-1c Derived from data in Table 1c March 2011 State of Texas Analysis to Impediments to Fair Housing Page 116 of 196

117 LMI Hispanic or Latino borrowers have a denial rate for loans (61.5 percent) that is just four percentage points higher than the denial rate (of 57.5 percent) of LMI non-hispanic whites (Appendix H Table 2c, see Chart 5-2c). Chart 5-2c Derived from data in Table 2c Among MUI individuals (Appendix H Table 3c, see Chart 5-3c), Hispanic or Latino borrowers experience denial rates noticeably higher than those of non-hispanic whites. MUI Hispanics are 1.53 times more likely to be denied compared with MUI non-hispanic white borrowers. LMI Hispanics are 1.07 times more likely than LMI non-hispanic whites to be denied. Similarly, MUI African-Americans are 1.51 times more likely than MUI non-hispanic whites to be denied. Ethnic and racial denial disparities increase as income levels increase. Chart 5-3c Derived from data in Table 3c Residents of substantially minority neighborhoods (50 to 79 percent minority) are 1.33 times more likely than the mixed neighborhoods (20 to 49 percent minority) to be denied loans. Almost 41 percent of the applicants from substantially minority neighborhoods are denied loans in contrast to 31 percent of the applicants from the mixed neighborhoods. Similarly, residents of March 2011 State of Texas Analysis to Impediments to Fair Housing Page 117 of 196

118 predominantly minority neighborhoods (80 to 100 percent minority) are 1.62 times more likely than the mixed neighborhoods (20 to 49 percent minority) to be denied loans. Portfolio Share Analysis of All FHA Single Family Lending in Lower Rio Grande Valley, Texas. NCRC expanded the Lower Rio Grande Valley analysis to include information on FHA lending. FHA loans are guaranteed by the Federal government, specifically the Federal Housing Administration (FHA). Borrowers pay an upfront premium and an annual premium to help fund FHA insurance. The FHA insurance covers the costs of defaults. In other words, the government, through FHA fees on borrowers, covers the costs of defaults. In contrast, conventional lending involves lenders themselves absorbing the costs of defaults. Often, lending institutions will protect themselves against loss by requiring borrowers to pay for private mortgage insurance. The total number of FHA loans was smaller than total number of conventional loans in Lower Rio Grande Valley in Lenders issued 477 high-cost FHA loans and 2,855 high-cost conventional loans, and 1,581 prime FHA loans and 3,518 prime conventional loans in Lower Rio Grande Valley. What is particularly relevant for our analysis is whether minorities are much more likely relative to whites to receive high-cost FHA loans. FHA lending has not been saddled with the abusive tricks, traps, and fees of many subprime loans. Yet, it remains the case that FHA loans are more expensive than conventional loans. If minorities receive a disproportionate amount of high-cost FHA loans and/or prime FHA loans relative to conventional loans, stakeholders should take steps to increase the amount of conventional lending to minorities. Similar to the results for conventional lending, Appendix H Table 1a (see corresponding Chart 5-1.1a) for FHA lending shows that Hispanics have a high ratio of high-cost FHA loans compared to the percentage of households. With 79 percent of the households in Lower Rio Grande Valley, Hispanics received 90.2 percent of high-cost FHA loans. The share of high-cost FHA loans for Hispanics or Latinos was 1.14 times greater than their share of households in Lower Rio Grande Valley. Hispanics also received a higher share of prime FHA loans (84.1 percent) than their share of households (79 percent). It should also be noted that Hispanics received a higher share of prime FHA loans than prime conventional loans (84.1 percent versus 72.5 percent). Since March 2011 State of Texas Analysis to Impediments to Fair Housing Page 118 of 196

119 FHA loans are more expensive than prime loans, stakeholders should increase their efforts to make prime conventional loans to Hispanics. Chart 5-1.1a Derived from data in Table 1a In contrast to Hispanics, non-hispanic whites received shares of prime (10.4 percent) and highcost (7.4 percent) FHA loans that were lower than their share of households (19.4 percent) in Lower Rio Grande Valley. Non-Hispanic whites also received a share of prime conventional loans (of 20 percent) that was the almost equal to their share of households and a share of highcost conventional loans (6 percent) smaller than their share of households. It should be noted that non-hispanic whites received higher share of prime conventional loans than prime FHA loans. Appendix H Table 2a (See corresponding Chart 5-1.2a) for FHA lending shows that LMI Hispanics received a disproportionate amount of high-cost FHA loans. About 8 percent of the high-cost FHA loans were issued to LMI Hispanics while just 5.1 percent of the prime FHA loans were issued to LMI Hispanics. FHA Chart 5-1.2a Derived from data in Table 2a March 2011 State of Texas Analysis to Impediments to Fair Housing Page 119 of 196

120 Similar to Appendix H Table 2a, Appendix H Table 3a (see corresponding Chart 5-1.3a) shows disparities in high-cost FHA lending for middle- and upper-income borrowers. MUI Hispanics received a share of prime FHA loans (76.6 percent) that was 4.3 percentage points lower than their share of high-cost FHA loans (80.9 percent). In contrast, MUI non-hispanic whites received 9.61 percent of prime FHA loans which was 2.5 percentage points higher than their share of high-cost FHA loans (7.05 percent). FHA Chart 5-1.3a Derived from data in Table 3a An examination of FHA lending trends by minority level of neighborhood shows that the predominant lending disparity is the overall share of FHA loans issued to predominantly minority neighborhoods (80 to 100 percent of the residents are minority). Predominantly minority neighborhoods received 74.4 percent of the high-cost FHA loans but received 69.7 percent of prime FHA loans in In contrast, neighborhoods with 50 to 79 percent of minorities received a portion of high-cost FHA loans (24.9 percent) that was lower than their portion of prime FHA loans (29.3 percent). Market Share Analysis of All FHA Single Family Lending in Lower Rio Grande Valley, Texas. The overall market share ratio (Appendix H Table 1b, see Chart 5-1.1b) shows that 24.3 percent of the loans received by Hispanics are high-cost FHA loans while 17.4 percent of the loans received by non-hispanic whites were high-cost FHA loans during Thus, Hispanics are 1.4 times more likely to receive a high-cost FHA loan than non-hispanic whites. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 120 of 196

121 Chart 5-1.1b Derived from data in Table 1b LMI Hispanics are 1.57 times more likely to receive a high cost FHA loan than LMI non- Hispanic whites (Appendix H Table 2b, see Chart 5-1.2b). Chart 5-1.2b Derived from data in Table 2b MUI Hispanics are also 1.34 times more likely to receive high cost FHA loans when compared to their white counterparts (Table Appendix H 3b, see Chart 5-1.3b). Thus, the trend of increasing ethnic disparities as income levels increase are not observed with high-cost FHA lending in contrast to high-cost conventional lending. Chart 5-1.3b Derived from data in Table 3b March 2011 State of Texas Analysis to Impediments to Fair Housing Page 121 of 196

122 FHA Loan Denial Disparity Analysis. The overall denial rate for all FHA loans (Appendix H Table 1c, see Chart 5-1.1c) in Lower Rio Grande Valley is 23.5 percent. The denial rate for non-hispanic whites (22.6 percent) and Hispanics (23 percent) is similar to the overall denial rate. In contrast, African Americans (8 percent) and Asians (11.8 percent) have lower denial rates compared to the overall denial rate. Chart 5-1.1c Derived from data in Table 1c The overall denial rate for LMI individuals (Appendix H Table 2c, see Chart 5-1.2c) is 40.5 percent, with the denial rate for LMI non-hispanic white borrowers being 50 percent and LMI Hispanics being 39 percent. Chart 5-1.2c Derived from data in Table 2c MUI non-hispanic whites experienced a denial rate of 21.7 percent and MUI Hispanics had a denial rate of 20.7 percent for FHA loans. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 122 of 196

123 Chart 5-1.3c Derived from data in Table 3c Summary and Conclusions. In Lower Rio Grande Valley, the portion of all prime conventional loans received by Hispanic borrowers (72.5 percent of prime loans versus 79.2 percent of households) were lower than the loans received by non-hispanic white borrowers (20.7 percent of prime loans versus 19.4 percent of households) compared to their portions of households. The share of high-cost conventional loans received by Hispanics is 1.16 times greater than their share of households. Both MUI Hispanics and LMI Hispanics are more likely to receive a high-cost loan than their non-hispanic white counterparts during MUI Hispanics are about 3 times more likely to receive a high-cost loan than MUI non-hispanic whites and LMI Hispanics are 1.2 times more likely to receive a high-cost loan than LMI non-hispanic whites. Ethnic disparities in conventional lending increase as income levels increase in Lower Rio Grande Valley. The denial rate of conventional loans is higher when comparing MUI Hispanics to MUI non-hispanic whites than when comparing LMI Hispanics to LMI non-hispanic whites. MUI Hispanics are 1.53 times more likely to be denied than MUI non-hispanic whites, while LMI Hispanics are just 1.07 times more likely than LMI non-hispanic whites to be denied. Again, ethnic disparities in conventional lending increase as income levels increase in Lower Rio Grande Valley. Both MUI and LMI Hispanics received a higher share of FHA high-cost loans than their non-hispanic white counterparts. MUI Hispanics are 1.34 times more likely to receive a high-cost FHA loan than MUI non-hispanic whites, while LMI Hispanics are 1.57 times more likely to receive a high-cost FHA loan than LMI non-hispanic whites during Hispanics received a higher share of prime FHA loans than prime conventional loans (84.1 percent versus 72.5 percent) in Lower Rio Grande Valley. Also, with 79.2 percent of the households in Lower Rio Grande Valley, Hispanics received 90.2 percent of high- March 2011 State of Texas Analysis to Impediments to Fair Housing Page 123 of 196

124 cost FHA loans during Since FHA loans are more expensive than prime loans, stakeholders should increase their efforts to make prime conventional loans to Hispanics. Non-Hispanic whites received a slightly higher share of high-cost conventional loans than high-cost FHA loans (7.4 percent versus 6.1 percent). However, it should be noted that non-hispanic whites received a higher share of prime conventional loans than prime FHA loans (20.7 percent versus 10.4 percent). While ethnic disparities are observed in prime and high-cost conventional lending, disparities do not appear to increase as income levels increase in FHA lending in contrast to conventional lending. This suggests that fair lending concerns maybe of a lower magnitude in FHA than conventional lending since disparities in FHA lending do not increase as income levels increase. Stakeholders should nevertheless take steps to narrow disparities in both conventional and FHA lending through more marketing of conventional loans in minority communities. Lack of Affordable Housing. While this is an impediment almost everywhere in Texas, it is especially a problem in the LRGV. Information from local organizations indicated that there were more than 6,500 people on a public housing waiting list in Cameron County and Hidalgo Housing Authority reports that it has 1,794 on its housing voucher waiting list. The Colonias, (addressed on their own later) also indicate that there is a lack of affordable housing up to standards available for rent or purchase in the region. Many homes that are available have flooding problems or other infrastructure failings. Bureaucracy in Delivery Systems. Closely related to questions about how money is spent, interviews indicated that there is a perception about the various levels that must be navigated to receive benefits. Specifically, the expenditure of disaster recovery funds was highlighted as a problem. Many people did not understand how the programs were being administered especially the FEMA declarations of not availability due to deferred maintenance and felt that the system was somehow not fair. Looking at Project Placement. In reviewing the projects contained in Appendix F, two issues become obvious. Most CDBG funds not including disaster funds, whether supplied by the State or used by entitlement communities go almost exclusively to infrastructure projects. The difficulty of determining how March 2011 State of Texas Analysis to Impediments to Fair Housing Page 124 of 196

125 the funds are spent is compounded by the manner in which data is reported. Looking at the table very few infrastructure projects have a clear delineation of whom they are directly serving and where the project is located. Without an ability to reference the population served (other than the generic 51 percent plus LMI language), it is difficult to determine who is receiving the benefit of the projects. Because so many of the regular CDBG funds are listed in this manner at both the entitlement jurisdiction and the State the information is not useable to determine if a community is using funds to further fair housing. In addition, in reviewing Appendix F, very little of non-disaster CDBG funds go to housing. In part this may be because of available funds for infrastructure. A state or local preference for infrastructure use may have been present, but the CDBG Action Plan has a policy that says it supports the use of CDBG funds for the construction of housing. The limitations of funds available and the competitive nature of the funds may factor into the use of funds. Despite the CDBG Action Plan expressed support for building housing with CDBG funds, competitive applications rounds should be reviewed to see if they favor infrastructure over housing in scoring. The impediment here may actually be the lack of specificity and record keeping by local and state governments for use in conducting their analysis of impediments to fair housing. Colonias. Neighborhood classification was identified as a significant problem in focus groups, interviews and background research. The areas brought up were colonias, barrios, or mexicano where people had moved into better neighborhoods and the vacant areas that were inhabitant by less established residents or in the case of colonias potentially unscrupulous developers took advantage of low income or unsophisticated people to crate large infrastructure free areas through a contract for deed system. The Colonias create a legal nightmare as the land has not been platted, homes have not been built to codes along with a myriad of other problems. According to a report by the Dallas Federal Reserve System in 2001, many Colonias still use septic tanks and cesspools and purchase water by the bucket and drum or use potentially contaminated wells. The report found that as recently as June 2000, only 54 percent of Texas colonia residents surveyed had sewer service and more than 50 percent drank water from sources other than taps. Even when the infrastructure is put in place many colonias residents do not have March 2011 State of Texas Analysis to Impediments to Fair Housing Page 125 of 196

126 hookups because their houses can't pass inspections to qualify and the owners can't afford repairs or improvements to meet codes. The report notes that Colonia Legislation passed in 1995 prohibits developers from selling lots in existing colonias without water and wastewater treatment services, although some cities and counties lack staffing to enforce the complex law. 139 Several Community groups have formed together to attempt to stop the development of further Colonias and assist the people living in the existing Colonias. Several state run programs are dedicated to repair and replacement of Colonias. There are Contract for Deed conversions, Self- Help Centers, legal assistance by groups like CDC-Brownsville and Proyecto Azteca, that was created in 1991 by United Farm Workers (UFW) and Texas Rural Legal Aid (TRLA). Enforcement actions are being done to deter future colonia developments. Texas Attorney General Abbott has raised and resolved issues including a legal action against the Cameron County colonia developer of Tierra Linda Gardens for $30,000 in civil penalties for unlawful colonia subdivision. 140 Status of Undocumented Aliens. Nowhere is the issue of how to treat undocumented or illegal aliens a bigger issue than in the LRGV. The subject is the matter of intense debate in the state s and nation s capitols, and it is high stakes politics for many elected officials. The federal government has uneven and/or confusing rules as to who can or cannot be included in programs statutorily excluding them in some programs and remaining silent in others. This lack of guidance creates different standards and leaves the matter up for local public debate as to whether it is even in the Fair Housing question as this form of discrimination is not based on a protected class status, but on a legal status. 139 Texas Colonias Housing and Infrastructure Issues by Ariel Cisneros Federal Reserve Bank of Dallas June 2001, retrieved at New Release Feb 11, 2008 Office of the Attorney General of Texas retrieved from March 2011 State of Texas Analysis to Impediments to Fair Housing Page 126 of 196

127 SECTION 6. EVALUATION OF SMALL COMMUNITIES DEEP EAST TEXAS COUNCIL OF GOVERNMENTS. Up to this point we have predominately looked at urban areas (or communities in close proximity or within the MSA) that are either participating jurisdictions or have staff resources to potentially address issues. In this section the AI will look toward the smaller communities targeting smaller counties and cities with less than 2500 residents that even if they are participating jurisdictions, the amount of funding is not adequate for the purpose of hiring significant staff or operating large programs. For some of the analysis, the major disaster funding recipient, Deep East Texas Council of Governments (DETCOG), will be the representative organization. Other analysis will include data from the rural portions of the Comptroller s Uniform State Service Regions that fall within the disaster areas. Even though the entire region is not included in the impacted areas that make up DETCOG or the other counties, we will include data for the Upper East Texas Region (4), Southeast Texas Region (5) (rural), and the Central Texas Region (8) (rural). Where we have the information available we will provide breakouts at the county level. Finally, for some data we will need to include statewide information as the best available. This section will more clearly develop the local demographic information and look at potential impediments to Fair Housing that exist in the area. Historical Recap. The twelve counties comprising the Deep East Texas Council of Governments (DETCOG) are: Angelina, Houston, Jasper, Nacogdoches, Newton, Polk, Sabine, San Augustine, San Jacinto, Shelby, Trinity and Tyler. The Deep East Texas descriptor comes from the phrase Deep in the Pineywoods of East Texas. Geographically this is an area noted for its temperate climate, high annual rainfall amounts and long growing season that has resulted in the development of forest with dense undergrowth. This region was originally populated by the Ayish, Alabama, Atakapa, Caddo, Cherokee, Coushatta and Kickapoo Indians. Spanish missions were established in Houston County (1690) March 2011 State of Texas Analysis to Impediments to Fair Housing Page 127 of 196

128 and San Augustine County (1717) to bring organized western religion to Native Americans and provide a barrier to French encroachment from Louisiana. Spanish land grants attracted Anglo Settlers to the region in the early 1800 s. Several of the first counties of the Republic of Texas were formed in the Deep East Texas Region. Records indicate Houston County once had cotton plantations worked by slaves. San Augustine, Shelby and Newton Counties were noted as antebellum slave holding areas. Forestry and the forest products industry dominated the regional economy since the civil war, but they have seen a decline in the last twenty years. Since World War II the poultry raising and processing industry has developed in the northern parts of the region. The 2000 Census shows the top three highest numbers of people per employment classification in the region as being Manufacturing (14.7%) and Retail Trade (12.6%) with Education Services (11.2%) and Health Care and Social Assistance (11.2%) a close third. 141 Counties of Deep East Texas are mostly rural with the total population in 2008 of all twelve counties comprising the Deep East Texas Council of Government (DETCOG) region at slightly more than 286, The counties are similar demographically averaging slightly under 80 percent white, 15 percent African American and 6 percent Hispanic. Sabine has the largest percentage of white residents with 87.5 percent and the lowest percentage of African Americans with 10 percent. It also has the lowest percentage of Hispanic residents with 2.5 percent. Houston County had the lowest percentage of white residents at 72.4 percent and the highest percentage of African Americans at 26.1 percent. Shelby County had the highest percentage of Hispanics with 15.8 percent. In the mid-1970 s a coalition of Black Leaders, most notably Texas State Representative, Paul B. Ragsdale of Dallas, and activist lawyers organized The East Texas Project. A U.S. Supreme Court ruling prohibited the dilution of minority voting strength in the drawing of political boundaries. The East Texas Project sued 48 counties/cities in East Texas with significant concentrations of black voters for having political boundaries that diluted the voting power of minority citizens. The settlements of these cases resulted in local redistricting that created precincts and wards where it was possible to elect black officials. Since that time there have 141 From Texas statutes, Fulmore s History and Geography of Texas as told in County Names, WPA Historical Records Survey, Texas Centennial Commission Report, the New Handbook of Texas, and the 2000 Census. 142 U.S. Census Bureau; American Community Survey This is also the source for the other demographic percentages in this paragraph. March 2011 State of Texas Analysis to Impediments to Fair Housing Page 128 of 196

129 been Black county commissioners in at least 6 of the 12 counties that comprise the Deep East Texas Council of Governments. Black city commissioners have been elected in several municipalities. As an example, in late 2010 four of the five city commissioners serving in Jasper are Black. That s a considerable improvement since the 1998 dragging death of James Byrd, Jr. and the subsequent two death sentences handed down by predominantly white juries in Deep East Texas. Several Black mayors have served the region in Jasper, San Augustine (2), Browndell and Huntington. In the early 1980s board structure of the Deep East Texas Council of Governments was also changed to include a voting minority representative from each county to increase participation in the council and to affirmatively further fair housing in the region. 143 Regional Demographic Recap. Population. The DETCOG area is not expected, compared to other parts of Texas, to experience significant growth between now and 2040 according to the state demographers at the University of Texas at San Antonio. Under the Zero Net Migration formula ( ) unlike other parts of Texas, the Hispanic population grows only slightly and the racial make-up of the community remains roughly the same as it is currently with a slight movement toward a larger minority population by Assuming rates of net migration equal to one-half of totals (0.5 ) the Hispanic population grows significantly, accounting for most of the growth in the region along with slight increases in Anglo and Black population by Murder of James Byrd, Jr. Wikipedia, the free encyclopedia, en.widipedia.org/wiki/murder_of_james Byrd. Jr., DETCOG Board Minutes, May 1980, Volume III, page, These projections assume the One-Half Migration (0.5). According to the State Demographer: This scenario has been prepared as an approximate average of the zero () and (1.0) scenarios. It assumes rates of net migration one-half of those of the 1990s. The reason for including this scenario is that many counties in the State are unlikely to continue to experience the overall levels of relative extensive growth of the 1990s. A scenario which projects rates of population growth that are approximately an average of the zero and the scenarios is one that suggest slower than but steady growth. Information for Table 4-1 pulled from Table 2.7 Population for the State of Texas and Council of Government Regions in Texas and Projections to 2040 Assuming Alternative Projection s SETRPC Region data March 2011 State of Texas Analysis to Impediments to Fair Housing Page 129 of 196

130 Table 6-1 Projected Population DETCOG Region Year Anglo Black Hispanic Other Total ,411 58,721 31,203 3, ,862 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total , ,642 60,564 61,772 38,431 43,568 3,921 3, , , , ,147 62,242 64,187 45,907 59,276 4,259 4, , , , ,841 63,537 58,239 99,626 4,496 4, , ,474 Table 6-2 Projected Population Anderson County Year Anglo Black Hispanic Other Total ,970 13,006 6, ,109 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,471 36,369 13,494 13,696 7,840 8, ,303 59, ,704 35,290 14,133 14,942 11,357 15, ,852 66,309 Table 6-3 Projected Population Cass County Year Anglo Black Hispanic Other Total ,709 5, ,438 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,185 23,501 6,201 6, ,241 30, ,271 19,739 6,529 6, ,979 27,568 Table 6-4 Projected Population Cherokee County Year Anglo Black Hispanic Other Total ,568 7,545 6, ,659 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,519 33,658 7,916 8,091 8,014 9, ,840 51, ,014 33,051 8,690 9,151 13,806 24, ,902 66,607 Table 6-5 Projected Population Grimes County Year Anglo Black Hispanic Other Total ,904 4,716 3, ,552 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,060 36,369 5,118 13,696 4,602 8, ,942 27, ,805 21,059 5,725 6,297 6,959 9, ,634 37,444 March 2011 State of Texas Analysis to Impediments to Fair Housing Page 130 of 196

131 Table 6-6 Projected Population Harrison County Year Anglo Black Hispanic Other Total ,356 14,900 3, ,110 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,962 46,097 15,404 16,088 4,346 5, ,201 68, ,245 45,744 14,783 16,888 8,078 22, ,616 85,473 Table 6-7 Projected Population Leon County Year Anglo Black Hispanic Other Total ,428 1,596 1, ,335 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,205 13,452 1,690 1,709 1,442 1, ,441 16, ,490 14,457 1,847 1,818 1,948 2, ,393 18,916 Table 6-8 Projected Population Madison County Year Anglo Black Hispanic Other Total ,857 2,945 2, ,940 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,912 8,474 3,154 3,103 2,484 2, ,643 14, ,193 9,860 3,270 3,163 3,256 4, ,086 17,116 Table 6-9 Projected Population Marion County Year Anglo Black Hispanic Other Total ,919 2, ,941 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,600 8,409 2,808 2, ,817 11, ,266 8,185 3,197 3, ,910 11,801 Table 6-10 Projected Population Milam County Year Anglo Black Hispanic Other Total ,878 2,669 4, ,238 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,441 17,015 3,011 3,014 5,627 5, ,263 26, ,501 16,228 3,523 3,411 8,773 10, ,962 30,334 March 2011 State of Texas Analysis to Impediments to Fair Housing Page 131 of 196

132 Table 6-11 Projected Population Morris County Year Anglo Black Hispanic Other Total 13, ,298 3, Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,177 9,276 3,329 3, ,219 13, ,252 35,290 3,326 14, , ,972 12,599 Table 6-12 Projected Population Panola County Year Anglo Black Hispanic Other Total ,744 4, ,756 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,811 18,280 4,408 4, ,351 23, ,704 16,912 14,133 5,111 11,357 1, ,852 23,807 Table 6-13 Projected Population Robertson County Year Anglo Black Hispanic Other Total ,687 3,858 2, ,000 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,507 10,158 4,237 4,298 2,891 3, ,740 17, ,275 10,729 5,255 5,360 4,550 6, ,199 22,262 Table 6-14 Projected Population Rusk County Year Anglo Black Hispanic Other Total ,924 9,148 3, ,372 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,583 34,251 9,251 9,375 5,055 5, ,226 48, ,182 31,182 8,865 8,865 8,254 8, ,690 48,600 Table 6-15 Projected Population Washington County Year Anglo Black Hispanic Other Total ,608 5,670 2, ,373 Year Anglo scenario Anglo 0.5 Black Black 0.5 Hispanic Hispanic 0.5 Other 0ther 0.5 Total Total ,689 22,193 6,185 6,275 3,438 3, ,835 32, ,704 22,196 14,133 7,406 11,357 9, ,852 39,492 March 2011 State of Texas Analysis to Impediments to Fair Housing Page 132 of 196

133 Age. Table 6-17 shows the population s anticipated aging according to the demographers located at the University of Texas at San Antonio for the DETCOG Region. This table demonstrates that the percentage of the population who is over sixty five will increase in raw numbers within the age category and as a percentage of the population as a whole. 145 The 2040 data assumes rates of net migration equal to one-half of (.5 ) and is neither the least nor the most conservative estimate by the demographers. Table 6-16 Age by Age Group and Ethnicity Age Group Anglo 2000 Anglo 2040 Black 2000 Black 2040 Hispanic 2000 Hispanic 2040 Other 2000 Other 2040 Total 2000 Total 2040 < Median Poverty and Income. The table to the right depicts the number of families living below the poverty line in Region 5. Of the 30,061 families living below poverty, approximately 44.6 percent are living in urban areas, with the remaining 55.4 percent in rural areas. 146 Additionally, the percentage of total rural families that are below poverty is slightly higher than the percentage of total urban families. Table 6-17 Region 5 Poverty Figures, 2010 At or above poverty Below poverty Families Percent Families Percent Rural 84, % 16, % Urban 87, % 13, % Region 5 Total 172, % 30, % Source: Nielsen Claritas, Ribbon Demographics, Region 5 Household Incomes. Very Low Income (31%-50%), 12% Low Income (51%-80%), 17% Extremely Low Income (0-30%), 14% Moderate Income (81%-95%), 7% Higher Income (over 95%), 50% The pie chart to the left depicts the income breakdown of the 274,543 households in the region. Approximately 43 percent of the households are low income. There are 138,673 individuals living in poverty in the region, which makes up 15.2 percent of the regional population. 145 Table 2.14 Percentage of Population for the State of Texas and Council of Government Regions in Texas by Age and Race/Ethnicity of the Population and Median Age by Race/Ethnicity in 2000 and Projections to 2040 Assuming Alternative Projection s HGAC Region data DETCOG region is all the rural section of Region 5. The Urban areas are represented by Southeast Texas Regional Planning Commission March 2011 State of Texas Analysis to Impediments to Fair Housing Page 133 of 196

134 Homeless Persons. According to 2010 population projections by Ribbon Demographics, this region has approximately 2.3 percent of the statewide total of people in non-institutional group quarters, including shelters. Region 5 also experienced significant damage from Hurricane Rita, which hit the southeast Texas area in September 2005 and Hurricane Ike in September According to FEMA, $190 million worth of damage was reported after Hurricane Rita and $29.4 billion after the 2008 hurricane season. Households affected by the hurricane have unmet needs. Table 6-18 Region 5 persons in other group quarters, 2010 Region 5 Homeless persons % of State Total Statewide Homeless Population Rural % 6,449 Urban % 61,249 Total 1, % 67,698 Source: Nielsen Claritas, Ribbon Demographics, Table 6-19 By County persons in other group quarters, 2010 County Homeless Persons 3 Anderson 81 Angelina 287 Bowie 358 Brazos 286 Burleson 0 Cass 11 Cherokee 133 Gregg 296 Grimes 5 Hardin 23 Harrison 93 Houston 0 Jasper 10 Leon 0 Madison 10 Marion 0 Milam 1 Morris 0 Nacogdoches 143 Newton 0 Panola 17 Polk 63 Robertson 3 Rusk 22 March 2011 State of Texas Analysis to Impediments to Fair Housing Page 134 of 196

135 PERSONS WITH DISABILITIES. County Homeless Persons 3 Sabine 4 San Augustine 1 San Jacinto 3 Shelby 26 Smith 1389 Trinity 0 Tyler 0 Upshur 0 Washington 61 US Census Bureau 2000 According to the US Census, of the total population in Region 5, persons with disabilities account for approximately 20 percent of the population. Of this total, approximately 49.5 percent are residing in urban areas, with the remaining 50.5 percent in rural areas. Table 6-20 Region 5 Persons With and Without Disabilities, 2000 Persons with disabilities Persons without disabilities Total Rural 121, , ,564 Urban 29, , ,388 Total 150, , ,952 Source: Census 2000, Urban defined by presence of an MSA. Table 6-21 breaks out the disability population by county for the Central and East Texas Counties that are disaster fund eligible. Every county has some percentage of their population with disabilities and this could increase with the aging of the population. Table 6-21 By County Person with Disabilities County Persons with a disability Anderson 9,200 Angelina 16,023 Bowie 18,284 Brazos 17,616 Burleson 3,795 Cass 7,177 Cherokee 10,049 Gregg 22,192 Grimes 4,553 March 2011 State of Texas Analysis to Impediments to Fair Housing Page 135 of 196