By Racquel Reddie, Managing Director of Community Development
One house can certainly tell a story but when you look at house after house on the same street in the same community a more complex story begins to unfold. Such was the case with a Houston property on Ivy Wall Street that recently came through NCST’s REO Program. This property was on the higher side of the typical fair market values that we normally see, but it had been flagged for its seriously distressed condition, which would need significant investments in rehab. As we peeled back the recent layers of history on this property and neighborhood, we began to see a picture of long term water damage, stagnant real estate values, half-finished rehabs and an overall sense of the dramatic aftermath that Mother Nature had on a community known for its beautiful homes and expansive lawns near bodies of water.
The culprit, of course, was Hurricane Harvey. According to the Texas Division of Emergency Management, this 2017 storm “dumped more than 27 trillion gallons of rain over Texas, making Harvey the wettest Atlantic hurricane ever measured. Some parts of Houston received more than 50 inches of rainfall. With one-third of Houston completely flooded, the weight of the water also sank the city temporarily by two centimeters.” Harvey left more than 100 people dead, flooded thousands of homes and caused $125 billion worth in damages. While the hurricane moved on quickly, what it left behind was a flooding nightmare for residential neighborhoods that three years later are still reeling from the negative impacts of the storm.
Fast forward to August 2020, when water damage has caused intrusive mold that still lingers like a bad cold in once beautiful homes such as those on Ivy Wall Street. In this upscale Houston community known as Westside, located along the Energy Corridor, there are a number of “Harvey” homes that are sitting on the market waiting on a brave new owner to repair. However, current market values and the significant cost to repair turned many of these opportunities upside down, leaving home values depressed and neighborhood stabilization behind. Understanding these dynamics helped us recognize why a Houston property valued over our typical $175,000 popped up in our program inventory. Given the costs involved for a buyer partner to repair the home, we knew it would be difficult for a buyer to rehab and sell at a profit to a family at or below 120% AMI.
NCST’s experience with this property raised some interesting questions. For example, should NCST enable buyers to rehab homes that are not affordable to LMI families when they are otherwise continuing to blight a neighborhood? Should we think differently about homes in areas that may soon experience another hurricane, flood, or fire, i.e., should REO properties be screened for climate resilience before being resold?
We look forward to this dialogue with you in the coming months and years. Housing in the end tells a story of more than just fair market values and days on market, it tells a story of what it takes to rebuild homes, communities and families that are safe and sustainable into the future.