Homeownership fragile as neighborhood’s prices rise
Settegast residents hope homes remain affordable as area develops
Charles Reynolds has lived for all his 71 years in the same northeast Houston neighborhood, a quiet community just beyond the Loop known as Settegast, where dogs sleep in the streets and horses flick their tails in grassy yards. That quiet, however, is increasingly broken by blaring power saws and staccato nail guns.
Reynolds, standing in the front yard of the home he’s owned for 30 years, surveyed the activity across the street, where two single-family homes and a duplex were under construction. Five other homes on the block had been built since 2011; a nearby empty lot was advertised for sale. A truck loaded with wooden studs drove by Reynolds’s home and parked down the road, where workers began unloading.
“Hopefully there are some changes around here for the good,” Reynolds said of the new development. “I doubt it. But you never can tell.”
Settegast is among the neighborhoods just north of Loop 610 where development
is accelerating as the region’s population, incomes and demand for housing increase. The influx of money, people and development is poised to permanently reshape the rural community where many have lived since the 1940s, when black families began purchasing property there.
Developers are touting the area as an affordable close-in community, where new three-bedroom homes are listing for less than $200,000. But the changes in Settegast also raise questions of what is affordable housing and to whom.
Settegast is unusual, if not unique, because its very low housing prices — many homes are valued at $30,000 to $40,000 — have for decades provided a path to home ownership to low-income families. The historically black neighborhood has a median income of $23,000, about half that of Houston as a whole, but a home ownership rate of 39 percent, comparable to the rate citywide. That provides a particular challenge to civic, religious and community leaders as they try to balance the benefits of new investment and residents while protecting the fragile state of homeownership in the neighborhood as prices, costs and taxes rise.
“What you have are people who are on the poverty side of the economic scale,” Michael Frazier, who grew up in the neighborhood and used to be tax assessor for the local school district. “They may own the property free and clear, but they are going to be taxed right out of here.”
Sense of identity eroded
Settegast was settled in the 1940s by black families who found many other residential areas restricted to them, according to city planning documents. The neighborhood was made up of small homes on large lots and dozens of churches — including Joel Osteen’s Lakewood Church, which later moved to a larger campus in southwest Houston. Frazier remembers the community as self-contained and close knit, a place where he knew his neighbors so well he could walk through their backyards.
For a time, the community had its own health clinic and high school, which produced a surprising number of professional athletes for its size, including Greg Pruitt, a Heisman trophy finalist who played in the National Football League for the Cleveland Browns and Los Angeles Raiders, and Carl Roaches, who played for the Houston Oilers and New Orleans Saints. Many families kept guinea hens; when the local schools had parades, horseback riders in cowboy hats and boots joined the cheerleaders and marching band.
But after Houston school districts were desegregated, the high school closed, and eventually the school district did as well, which, Frazier said, eroded the community’s sense of identity. “You start seeing things diminish a little bit,” he said.
Among those things is rate of homeownership, which, as recently as 2013, stood at 60 percent. Many of the early homeowners died without wills, leaving the properties unclaimed by heirs and eventually in foreclosure, according to Frazier. Others lost their homes after falling behind on taxes.
The Houston Land Bank, a city agency that acquires tax-forfeited, vacant and deteriorating properties, owns 167 lots in Settegast’s 2 square miles, about a third of its 525 properties across the city, a sign of how many families had difficulty holding onto their properties. Some of the lots have become parking lots for 18 wheelers and car repair shops, common sources of frustration for residents who want to maintain the neighborhood’s residential character.
Buying cheaper than renting
Settegast and nearby neighborhoods were long overlooked by developers as they focused on the city’s core to the south and wealthier suburbs to the north. But as land and housing costs have climbed, putting these areas out of reach for many residents, developers and homebuilders have sought new places to invest, where the combination of price and location offers the potential of rapid appreciation.
Settegast would seem to fill that bill, said Robin German-Curtis, a real estate agent in the area. The neighborhood is just a 15-minute drive from downtown. Land is plentiful and cheap, with lots about an eighth of an acre selling for as little as $15,000, compared to $425,000 in Third Ward. In addition, properties in Settegast have few deed restrictions that could limit the number of homes built on a lot.
“Here, you’re still in city limits. You’re in an affordable home,” said Monique Davis, who is building the pair of two-story homes on Reynolds’ block. “This will all be turned over in the next two or three years.”
For Davis, Settegast represents Houston’s last bastion of affordability for working-class homeowners. Davis said she grew up in Los Angeles area neighborhoods where handymen and teachers were able to own their own homes. When Davis became a real estate agent, she helped clients like her mother, a lifelong Amtrak employee, find homes within their budgets.
Davis moved to Houston a little more than a year ago after her three sons enrolled in Texas Southern University. She said she was struck by the displacement of longtime residents in gentrifying neighborhoods here and decided to build affordable homes.
In Settegast, she said, buying can be cheaper than renting. Davis said that her company, Equivest, can build and sell three-bedroom, twoand-a-half bathroom homes for $185,000. That translates to a monthly mortgage payment of $998, assuming a 30-year loan with 4.5 percent interest and a down payment of $25,000, less than 15 percent. By contrast, the only three-bedroom, two-bath currently listed for rent in the neighborhood is $2,000 a month.
Davis knows it will become harder to sell homes at $185,000 as demand and prices for land rise. But she said she is determined to hold the line on the prices. Too often, she said, rising property values in gentrifying neighborhoods make property taxes unaffordable for longtime residents.
“That is what happened in the Third Ward,” Davis said. “It’s revitalized, but now the homeowners that are in the existing community can’t live there.”
‘The perfect neighborhood’
At Settegast’s monthly civic club, which works to improve the quality of life of the neighborhood by keeping streets clean and organizing community events, members weighed the fears of higher taxes against the benefits of residential construction.
“(The new homes) are more affordable than other areas,” said Tobie Ross, president of the Civic Club and a pastor in the neighborhood. “I was elated to see a sign on the vacant lot across the street from my home saying they’re going to build some two-story homes over there. I’d rather see a house go there than a truck lot.”
For Rosario Martinez, Settegast is a dream come true. Martinez and her husband are both public school teachers who grew up in Denver Harbor, a neighborhood just on the other side of Loop 610. Martinez spent a year looking for homes within her budget before discovering that in Settegast, she could afford three bedrooms instead of two, two bathrooms instead of one, and a lot that was 3,000 square feet bigger than anything she could find inside the Loop.
“Just that five minutes outside the loop makes a difference,” she said. “It’s very crazy.”
She recently went under contract on a $149,000 home in Settegast and is waiting for the deal to close. Already, she’s making plans for her life there, eager to become involved with the community garden and other programs.
“I’m excited to have my daughters walk down the street with me, to ride our bikes and go to the garden to pick out an onion or turnip,” she said. “It’s the perfect neighborhood.”