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As Galveston’s promise to rebuild more than 500 public housing units destroyed during Hurricane Ike nears completion, a new housing problem is impacting Galveston Island.
Galveston’s workforce is growing. The island’s population, however, is not.
More than half of the island’s workforce does not live on the island, mainly due to housing affordability, a study by housing nonprofit VISION Galveston found.
Since 2010, median home values have increased by 50 percent and rent by 30 percent, yet average wages have not followed that trend, the group found. As a result, the island’s workforce has looked elsewhere for housing.
The need to find a solution to the affordable housing problem is not lost on the city’s mayor, Craig Brown, but the answer is not as simple as some may think, he says. Land availability and cost are hampering efforts by officials to fix the issue.
The need for affordable housing can also be seen within the Oleanders at Broadway – the site where the last of the promised public housing units will be completed. The mixed-unit complex offers public, affordable and workforce housing, all in one development. Before the official opening, the waitlist for one-bedroom units was already up to 7 to 10 years, property manager Krista Rhodes said.
Some experts are adamant that more accessible housing options, especially for the area’s lowest income residents, must be created on the island, not elsewhere.
“Whose island is it?” said John Henneberger, co-director of Texas Housers. “Is it only for the rich? Is that equitable? Is that fair?”
Cost brings challenges
Being an island presents unique challenges when it comes to addressing affordable housing, Brown said.
Land availability is not only dwindling, but price is also increasing. And of the undeveloped land the city does have, many of those lots are privately owned by developers who have their own plans.
An environmental group has also put a dent in the stock of available land, Brown said. Environmental group Artist Boat, which aims to preserve greenspace and coastal margins on the island, has purchased nearly 900 acres of land.
Karla Klay, executive director of Artist Boat, said the land the organization purchased is dedicated to canalized development and some commercial land for hotels and resorts.
“We shouldn’t describe land availability as a foe of affordable housing,” Klay said. “Every city in America has areas that could be redeveloped to create affordable housing.”
Even if the city or a developer can find an available and affordable lot of land, construction and insurance costs also make the effort difficult to achieve, the mayor said.
On top of that, being so close to the water jacks up the costs of insurance to protect homeowners in the event of a massive storm.
When it comes to finding a solution to Galveston’s affordable housing problem, Brown suggests residents look to the mainland to find housing.
“Say 55 percent of all the people that work on the island don’t live here. I don’t see anything wrong with that. So what? People get in their mind that you’ve got to live here if you work here. That’s not the way it is in Houston. It’s not the way it is in Austin. It’s not the way it is in San Antonio,” he said. “Because we are by the water, we have a mindset that everything has to happen here. That’s a mindset we have to get over.”
Tyler Robert, executive director of BUILD Galveston, a nonprofit organization focused on the creation of workforce housing, said Galveston can’t provide many of the things young families look for in their first home. The No. 1 factor is land size.
“They want more land. They want a backyard. That’s what we’ve seen in the data shown so far, which is understandable. I know a lot of new families want that. And that’s kind of just been the American dream. Especially for newer families, they want what their parents had,” Robert said. “…. So we know that there’s just things that Galveston can’t provide families, and land size is really just a big part of that.”
Betty Massey, vice chair of the Galveston Housing Authority, however, believes that if you work on the island, you should be able to live there. While the housing authority currently does not have a plan to create more public housing units, Massey believes it’s an idea officials should seriously consider.
As of September, the housing authority had more than 3,800 heads of households on waiting lists across their low-income public housing, project-based housing and assisted-living units.
Massey said her biggest frustration is the stigma surrounding people who live in public housing. A common misconception is that people living in public housing aren’t working, but Massey takes issue with this view.
Of the 93 able-bodied tenants living at Cedars at Carver Park and the Villas on The Strand, 85 percent of them are employed and make an average of $15 an hour, Massey said. But before taxes every two weeks, these tenants are making a paycheck of $1,200. The average rent for a one-bedroom apartment in Galveston is just more than $970, according to Apartment List.
“You’re a part of the workforce, but you can’t afford to live here,” she said.
Galveston has previously made efforts to help low- and middle-income individuals become homeowners on the island through some long-standing programs.
The Galveston Housing Finance Corp. and the Galveston Property Finance Authority both were created to promote homeownership for middle- and low-income families. The last homes the programs were able to build were in 2017, said Michele Hay, economic development coordinator.
Through both programs, the city purchased land through tax foreclosures to build single-family homes and also provide mortgage and down-payment assistance. To help with home costs, the Galveston Housing Finance Corp. issued two liens on a property with the promise of one being forgiven after the family lives in the home for a certain number of years, Hay said.
While the Finance Corporation and Finance Authority programs are great, they too were impacted by the availability and cost of land, Hay said.
The programs yielded results such as the creation of several single-family and multiresidential developments.
The city also has a home-buying assistance program that will provide up to $14,500 toward a down payment for applicants.
To create more affordable housing options on the island, Massey said it’ll take a public-private partnership or a change in public policy.
“It won’t happen if we just leave it to the market,” she said. “The market is driving higher-end developments — hotels. I know it sounds silly, but it’ll take a community to make this happen.”
A path forward?
Several organizations are working to navigate around barriers that have historically hindered affordable housing.
The Bay Area Habitat for Humanity helps families with the cost of their homes through the forgiveness of a second lien. The amount of the lien depends on a family’s financial situation, said CEO Philip Golden.
BUILD Galveston, a nonprofit housing organization, may also hold the key to the solution through a public-private partnership.
BUILD was launched in 2021 as a subsidiary of VISION Galveston. The organization’s goal is to create affordable workforce housing for Galveston’s most essential workers, such as teachers, first responders and health care employees. The organization has partnered with city officials, first responders and the city’s top employers to identify the most pressing roadblocks in providing affordable workforce housing.
At the city’s Nov. 16 workshop, BUILD Galveston presented a possible solution to the struggle associated with costs of land and construction.
The group’s leaders announced that it has raised $2 million of a $5 million goal toward the Build Galveston Essential Housing Workforce Fund I. This fund was created with donations from private sponsors to incentivize investors to develop affordable housing on the island. Developers can use that funding toward land acquisition, financing development costs, single-family home construction loans and more.
Aside from construction and land costs, Robert said high insurance costs also create a barrier toward home ownership. While BUILD can’t solve that, its goal is to lower the overarching costs for developers that may have been discouraged from pursuing Galveston previously.
City officials are optimistic about what BUILD Galveston could bring to the table and how it could impact the stock of affordable housing in the city.
“We’ve got these two boards, and they’ve got the ability to do some of these things. Just with construction costs and real estate, they just hindered a little bit,” Hay said. “But we’re optimistic. And maybe [with] what BUILD Galveston might be bringing to the table, it might be our missing link in helping us achieve [our] goals.”
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