The Houston Housing Authority appears poised to terminate a $24.3 million agreement to build a 260-unit affordable housing complex in Independence Heights, but officials at the agency so far have not publicly explained why.
If the housing authority follows through, it will owe developer Columbia Residential $2 million in fees, according to a memorandum of understanding between the two, and put committed bond financing, private investment and a 4 percent tax credit in jeopardy, even if a new developer is brought on to complete the project.
The housing authority and Columbia Residential have been consulting with the northwest Houston community on the project since 2018, said Rev. Ray Mackey. The reverend serves on the Independence Heights Redevelopment Council and is the former chair of the Independence Heights Greater Houston Baptist Ministers Alliance.
“We were softly planning when we could do a ribbon cutting, you know?” he added. “Shovels in the ground sort of thing.”
The decision to terminate the deal seemingly came out of nowhere, advocates, residents and the developer said.
The HHA included an agenda item on its Feb. 4 commissioners meeting to strike the contract, but the board voted to “table” the resolution after community members flooded public comment sessions at the authority and during city council that Tuesday.
“While I appreciate that this item has been temporarily tabled, it is imperative that the community receives clear and substantive answers before any further action is taken,” City Councilmember Mario Castillo wrote in a letter to HHA. “I will hold the Houston Housing Authority accountable for delivering this project in a way that aligns with the community’s vision.”
The housing authority declined multiple interview requests from Houston Landing over the past week, and spokespeople for the agency did not answer questions about why agency officials wanted to terminate the memorandum of understanding.
For Independence Heights residents like Wyona Fitzgerald the inner machinations of city politics are beside the point. The 87-year-old is terrified the residents of her historic neighborhood — Texas’ first Black city — will be priced out as gentrification threatens to consume the community she loves.
“Being a senior citizen on Social Security is hard. It’s hard and I own my property, okay?” Fitzgerald said. “I live off of less than $2,000 a month and that’s real. And think of those who live off of even less than that.”
As a longtime neighborhood advocate she wants more affordable housing in Independence Heights — the kind of homes that foster a sense of community among local families — as opposed to outsiders moving into high-rise apartments and increasing the average rent.
“When they put these tall buildings in, the people who live there are upstairs, their cars are in the (garage), and you don’t know who’s there,” Fitzgerald said. “You used to speak to each other, you know, and you’d recognize each other.”
Fitzgerald said she does not understand why HHA would move to replace Columbia Residential, which has prided itself on planning the new apartment complex with the community for the past seven years.
Neither does the developer.
“I think it’s just very unfortunate because of all the work that’s been put into this (project) to have made a promise to the community and turn on that promise,” Columbia Residential attorney Toni Jackson said.
Memorandum of understanding
Jackson said a housing authority attorney informed the developer in December that authority officials wanted to change a memorandum of understanding between the agency and Columbia Residential, citing high cost estimates.
The MOU, or formal agreement between the city and developer, was signed by both parties in December 2023. The housing authority agreed to commit a total of $23.4 million from an allocation of FEMA funding and other HHA reserves. Columbia Residential agreed to apply for a 4 percent tax credit through the Texas Department of Housing and Community Affairs that would cover about a third of the project’s cost and secure bond financing.
“We haven’t been given (any reason) other than our costs were too high,” Jackson said.
Neither Jackson nor the authority said how much the apartment complex was projected to cost. A clause in the memorandum of understanding says “there is a substantial financing gap for the Project and the projected uses,” and that they “will work together in good faith to try to reduce this gap.”
If the housing authority terminates its deal with Columbia Residential the agency will owe the developer up to $2 million in pre-development fees, which covers “architectural, engineering and other third-party costs,” according to the agreement. Additionally, the authority likely would lose the 4 percent tax credit the developer obtained.
Jackson said the housing authority needs to decide whether to terminate the deal or retain Columbia Residential as its developer if it wants to preserve the project’s bond financing, private financing and an additional $7 million from the Department of Housing and Urban Development.
Mackey, who spoke during the HHA board meeting last week, implored the board of commissioners to honor its agreement with Columbia Residential.
“Not only do you disenfranchise the residents of Independence Heights, but it feels like there’s some sort of ad-hoc meeting at play here,” he said. “Some sort of numbers game.”
Mackey later said he fears replacing Columbia Residential with another developer would lower the quality of the project.
“You can work through costs,” Mackey said. “You can mitigate costs, but what you can’t do is put quality above cost, you can’t put inferior products in place either and that’s something that we, as a community, certainly would not stand for.”
The proposed project would be the second affordable housing complex the authority has built in Independence Heights.
Community concerns
In 2018 the HHA opened Independence Heights Apartments, which had thousands of applicants for about 200 units, Mackey said. That overwhelming need prompted the authority to partner with Columbia Residential to build another complex across the street on Crosstimbers.
In his letter to HHA Chairman Joseph “Jody” Proler, Councilmember Castillo emphasized that the project is “about ensuring that Independence Heights residents have a voice in the future of their community,” which is in desperate need of quality, affordable housing.
The District H council member, who represents Independence Heights, questioned the authority’s motivations for ending the deal. Castillo also wrote that HHA was concerned about how the developer was selected and why the contract was not awarded to “the lowest bidder.”
“HHA has historically used a qualifications-based selection process,” Castillo wrote. “This approach ensures that developers are chosen based on experience, expertise, and capacity to deliver high quality housing.
“Justifications for terminating Columbia Residential’s involvement appear to be inconsistent and, in some cases, overstated,” he added.
State Sen. Molly Cook, D-Houston, also wrote a letter to the authority demanding transparency. Cook urged the HHA to keep its promises to the Independence Heights community, which is juggling the dual crises of insufficient affordable housing and gentrification.
“I will be keeping a close watch on this project and will support the Independence Heights community as they seek fulfillment of promises, maintenance of affordability, and transparency throughout the process,” Cook wrote.
Natasha Johnson serves on Independence Heights’ Superneighborhood board and has been a part of numerous meetings about the affordable housing complex over the past seven years.
Pulling out of the deal with Columbia Residential would set the community back, Johnson said. Independence Heights needs affordable housing now, she said.
“I feel that the project is going to be the blessing to the neighborhood because we have a lot of residents who want to stay,” Johnson said. “They don’t want to go anywhere. And if they have affordable, they can stay.”
Editor’s note: Rev. Ray Mackey is the father of Houston Landing Director of Finance Konner Mackey.
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