Low-income families slip through cracks
‘New colonias’ have poor utility access, little chance for aid
HIDALGO COUNTY — As soon as lots went up for sale in a housing development on the outskirts of Donna, the Reyes family signed a deed of trust with the seller for $30,000 to secure their half-acre plot.
Since December, nearly a dozen other families in rickety homes have put down roots in the verdant agricultural fields from which the tiny neighborhood, called Maiz 5, was cut.
Adolfo Reyes and his wife, Rosie Reyes, live with their five children, ages 2 to 16, in a rundown mobile home, surviving on less than $700 a month. They would have little legal recourse if they fell behind on their $373 monthly loan payments and the developer decided to foreclose on the property.
Despite their tenuous grip on the land, and with few reasonably priced alternatives, the couple say this is their best chance to realize a lifelong dream of homeownership.
“When I came here, I didn’t have light or water,” said Rosie Reyes, 38. For weeks, the family lived in darkness and borrowed water from neighbors while they scraped together money to pay for utility services. “Our situation is not good, but we’re happy.”
The Reyes family lives in what some call a “new colonia.” Unlike older colonias established decades ago, Maiz 5 was subdivided according to state rules that prevent developers from selling property without putting in basic infrastructure, such as electricity, drinkable water and paved roads.
But the rules, meant to halt the proliferation of neighborhoods along the border lacking in bare living necessities, also have a downside. They have driven up the cost of lots while doing little to alleviate the scarcity of good-quality, affordable housing, according to a recent study by the Federal Reserve Bank of Dallas.
Old-style colonias still exist, but their numbers are no longer growing. Those impoverished neighborhoods, which began as immigrant farmworker settlements, usually lack sewer systems, electricity and paved roads, and families often live in substandard houses.
The Texas secretary of state ombudsman program, which acts as a liaison among state, federal and local agencies on colonia projects, estimates that 500,000 people in the state live in nearly 2,300 colonias today. About 40 percent of them live below the poverty line of $24,250 per year for a family of four, more than a third are foreign born and almost 45 percent have limited English proficiency.
Texas does not formally consider new colonias, such as Maiz 5, to be colonias because they have basic infrastructure. Yet the two are often indistinguishable amid the dilapidated homes balanced atop concrete blocks.
Even with access to utilities, many families who are saddled with overfinanced lots cannot hook into them for lack of money, leaving residents in virtual colonia-like conditions, the Dallas Fed found in its report, “Las Colonias in the 21st Century: Progress Along the Texas-Mexico Border.”
“We sometimes refer to these developments as new colonias,” said Jordana Barton, a senior adviser for the Federal Reserve Bank of Dallas in San Antonio and lead author of the colonia report. “There is infrastructure, but people can’t connect to the utilities because it’s too expensive or their substandard house is not up to code.”
Unintended consequences
In 1989, the Legislature instructed state agencies to develop rules that guaranteed water and sewer service to residential developments and strengthened platting requirements. Model subdivision rules took effect the next year and were revised several times over the years.
One unintended result of the rules is that a half-acre lot that sold for $5,000 a generation ago now costs upwards of $40,000, according to research by the Dallas Fed. Part of the price increase can be explained by the larger size of lots, especially those with septic systems. Because many subdivisions aren’t connected to the sewer lines of a nearby community, homeowners rely on septic systems, which can be installed only on properties of at least a half-acre, per subdivision rules.
But even as the rules ensure infrastructure when subdivisions are built, they ignore the dearth of safe and affordable housing on the border, experts say. At the same time, the absence of a colonia designation has raised concerns that families living in low-income developments are missing out on government programs that fund home improvement projects.
“The bulk of the our funding is set aside for fixing older colonias, so there’s not really any money set aside for new colonias,” said Homero Cabello Jr., director of colonia initiatives for the Texas Department of Housing and Community Affairs.
Cabello works with an annual budget of $6 million that is used for projects in low-income neighborhoods across the state, including long-standing colonias. But only state-designated colonias are eligible for the $1.5 million set aside every year for the Colonia Self-Help Center Program, which funds housing rehabilitation and new construction, or the $1 million spent on converting highrisk land purchase agreements to contracts that families can more easily manage.
Meanwhile, it isn’t unusual for cash-strapped families in new subdivisions to reside in jerrybuilt homes, made with uncertain building materials.
“We’ve seen homes built with campaign billboards and pallets,” said Ann Cass, executive director of Proyecto Azteca, a nonprofit housing organization that builds homes in colonias. “There’s a big irony to the model subdivisions that have very-low-income people living in them — there’s nothing model about them.”
Affordable housing
Proyecto Azteca builds up to 25 affordable pier-and-beam homes in poor neighborhoods each year, relying on funding from the Hidalgo County Urban County Program, U.S. Department of Agriculture, Housing Assistance Council and the Marguerite Casey Foundation.
But the need for affordable homes in the county’s more than 900 colonias and impoverished neighborhoods far outstrips what Proyecto Azteca, which has 4,000 people on its waiting list, and other housing organizations in the region can provide.
Government programs that assist with subsidized housing is another option for low-income people, but the wait can also be long, causing some to move in with family.
In the fast-growing border region — a 7.3 percent population increase in Hidalgo County since 2010 — families often prefer to buy a lot in one of the many subdivisions built in recent years over an established colonia.
Typically, land purchases are developer-financed, sometimes through rent-to-own agreements and with interest rates of 16 percent or higher. Under these arrangements, the buyer gains no equity, despite making monthly payments, and the threat of foreclosure looms. In Webb County foreclosure rates once climbed as high as 45 percent, according to the Dallas Fed.
Where many see the exploitation of poor families, most colonia residents see the land purchase as an opportunity, said David Arizmendi, a community organizer and professor of sociology at South Texas College in McAllen.
“The question becomes, how do these communities become normalized, where you have services as you would in any city?” Arizmendi said of older colonias.
Building community
Eight years ago, when Juan Moreno, 45, moved from the dangerous streets of Reynosa, Mexico, to the pothole-filled roads of Indian Hills East, a colonia on the outskirts of Mercedes in Hidalgo County, a sense of community was missing, he said. So Moreno built a church.
The church, called Los Hechos, or The Acts in English, has a daycare center and a soccer field and become a gathering spot, especially for kids who have no parks or organized activities in the neighborhood to keep them occupied.
Many of the homes are in disrepair, and in some areas trash is piled chest-high along streets that lack lights and are unsafe at night, according to residents.
Nonetheless, newcomers are not discouraged, and vacant lots, which cost $13,000 on average, are filling in at a steady clip, Moreno said. He estimated the number of families has doubled to 300 in the time he has lived in Indian Hills East.
“Everybody is looking for a little place of their own to settle down,” Moreno said. “In town, the price of rent is too high, easily $450 or $500 per month. Here you pay $200 (per month) and the property is yours.”
On a lot adjacent to the church, discarded plastic bags clung to a mesquite tree, but someday, perhaps soon, a family will build a home, and when that happens, the family will likely be responsible for putting utility hookups in place, Moreno said.
Jessica Lara, 29, and her family of five, including three children, ages 1 to 7, bought their 55-foot by 100-foot lot with the hookups already installed. Earlier this year, the family put the finishing touches on a three-bedroom house. Still, it took nearly four years to build, with help from religious and housing organizations, and every penny the Laras could spare from their monthly income of $1,000, she said.
“All that’s left to finish is the inside,” Lara said. But with so many moving into the neighborhood, and the open spaces disappearing, her husband has begun to feel crowded, she said. “Now he says we need something bigger.”