Galveston complex waits for revamp
The possible rehabilitation of a troubled Galveston apartment complex subsidized by the Housing and Urban Development Department is still in doubt after two Texas housing agencies met.
Sandpiper Cove, a 192-unit complex, is currently owned by The Millennia Cos., a corporation out of Cleveland, Ohio, that owns and/or manages more than 250 properties across 26 states. The Living Hell investigation by the Houston Chronicle has shown how some Millennia properties, including Sandpiper Cove, have been plagued by problems that tenants have complained about for years.
After Sandpiper Cove failed inspections, HUD forced Millennia to find a new managing company. Mil
lennia is in the process of selling the property to a Texas company called ITEX Group, which hopes to finance a rehabilitation with tax credits and bonds.
The Texas Department of Housing and Community Affairs and Texas State Affordable Housing Corp. met this month. (Yes, the names are painfully similar. No, it’s not just you.) Here’s what happened and what’s coming next.
Wait a minute. What are these tax credits?
A huge problem in the affordable housing world is that many of the properties were built decades ago and need a serious overhaul. (Sandpiper Cove was built in 1969.) The rehabs are complicated and costly, so states and the federal government offer tax incentives for developers to take on and complete these projects.
What happened at each meeting?
The Texas Department of Housing and Community Affairs approved the motion for tax credits. The Texas State Affordable Housing Corp. has called a special meeting to be held sometime later in March to revisit the issue.
How do the tenants feel?
Depends on the tenant. One group of tenants, represented by
public interest firm Lone Star Legal Aid and private firm Daniel & Beshara PC, is suing HUD and asking for vouchers to leave the complex. Other tenants spoke at each meeting in favor of the rehabilitation and signed a letter in support.
What were the arguments for rehabilitating the property with tax breaks?
HUD sent a letter to the Texas State Affordable Housing Corp.
and the Texas Department of Housing and Community Affairs in support of issuing rehabilitation bonds. HUD pointed out that although there’s litigation, the agency has never lost a similar case. The letter argued that keeping affordable housing supply in Galveston — where the already scant affordable portfolio was severely diminished by Hurricane Ike — is important. The city of Galveston also sent a letter supporting the tax credit application.
Mayes Middleton, the area’s state representative, sent a letter in support, as did the president of the Galveston Independent School District, Moody Methodist Church and the Galveston Economic Development Partnership.
What were the arguments against rehabilitating the property with tax breaks?
A group of 10 tenants at Sandpiper
Cove wrote a letter to the Texas Department of Housing and Community Affairs in opposition to tax credits. They argued that tenants had seen multiple companies come in and promise changes and leave with nothing done and that the building was so damaged it was beyond repair.
“Some of us have been here for 10 years,” they wrote. “Some of us for 40. And, during this time, new owners, new developers and new managers have come and gone, and the conditions have continuously grown worse.”
Lone Star Legal Aid, the public interest law firm representing a group of tenants in their suit against HUD, also wrote a letter opposing the tax credits. Lone Star argued that the property is located in a high-poverty, highcrime area.
“Despite shocking conditions on the property, the application does not even mention the existence of mold, its effects on residents’ health or these other dangers to human life and health,” Lone Star wrote.
What specific plans does ITEX Group have for Sandpiper?
Because a major concern for Sandpiper Cove is flooding, ITEX proposes providing flood insurance for the buildings themselves and the residents’ property and to build a flood wall around the property. In a presentation to tenants, ITEX said it would pave sidewalks, update appliances and fix sewers, among other upgrades.