Houston Abandons $65 Million Post-Harvey Affordable Housing Program

Houston has ended a $60 million program to develop affordable single-family communities using Hurricane Harvey disaster recovery money, saying a February 2025 deadline cannot be met.

The city notified the Texas General Land Office in August that it would be disbanding the program, the Houston Chronicle reported. Forty workers employed by the program were laid off Monday.

Houston officials told the GLO that rising construction costs and high interest rates were preventing it from building the first 266 homes by February 2025, as required.

The program launched in 2018 and was intended to help rebuild and revitalize communities affected by the storm, which destroyed at least 1,000 homes and damaged another 40,000. The program was supposed to develop 700 homes in Willowbend, Sunnyside and Near Northside, but it wasn’t granted an extension, Keith Bynam, director of Houston’s Housing and Community Development Department, told the outlet.

The funds, from the U.S. Department of Housing and Urban Development, must be spent in Houston, but the GLO now gets to decide what to do with the money.

The city also has to return about $43 million, which it spent buying land for the 700 homes, to the GLO. Some developers were already lined up, but the city will now scrap those plans and resell the land to recoup the cash.

About half of the homes would’ve been made affordable by offering the land to developers for free. Buyers would’ve been given up to $135,000 in down payment assistance, and they would’ve stayed affordable for five years, at which time the homeowners would’ve been free to sell them at market rate.

Besides timing, the program also struggled to show that building affordable housing would help Houston recover from Hurricane Harvey, another HUD requirement.

“If you have 200-plus homes you are selling to individuals who may or may not have been here at the time of the storm, it’s very difficult to say whether HUD will accept that,” said Brittany Eck, spokesperson for the GLO.