The city of Waco is shifting focus in its work to promote affordable housing, from support for construction of new homes to support for home repairs and other financial assistance.

City Housing and Community Development Director Galen Price said the $200,000 the department requested for the city’s rehab and reconstruction program, for one, will almost entirely fund rehab projects starting this year.

“There is a need to preserve existing housing stock here, and we’ve found that previously we were doing a lot of reconstruction, but we want to reach a lot more households,” Price said.

Reconstruction involves demolishing and rebuilding a home from the ground up, while rehabilitation involves the city paying up to $24,500 for contractors to perform repairs needed to keep homeowners in their home.

“For the cost of doing one of those (reconstructions), we can assist at least two homes with rehabilitation assistance,” Price said.

The shift is intended to keep housing affordable by keeping homeowners in their existing homes for as long as possible and by address code violations with financial assistance.

“It allows them to remain in their homes as issues potentially come up,” Price said.

Also, more residents have been using the city’s down payment assistance program after the city increased the maximum amount of assistance from $14,999 to $25,000 in June of last year, he said.

“We’ve actually been able to serve more individuals, but again, at up to $25,000, it uses more money,” Price said.

The city’s rental assistance program, run by Heart of Texas MHMR, also received more funding this year. And projections show it will need another funding boost for the 2019-20 fiscal year, Price said.

The reconstruction and repair, down payment assistance, and rental assistance programs are each funded by the United States Department of Housing and Urban Development’s HOME Investment Partnership Program. For homeowners to qualify, they have to have owned their home at least two yaers and have an income of less than 80% of the area’s median income.

Waco received $223,500 in HOME grants for the 2019-20 fiscal year, and 15% is required to go to community housing development organizations. The city works with three: Neighborworks Waco, Habitat for Humanity and Grassroots Community Development.

Low homeownership

Neighborworks Waco Chief Financial Officer Karen Saucedo said Waco has always had a low home ownership rate, and rising costs have driven the rate lower, preventing more low income residents from buying a home.

“The problem right now is our local home pricing is increasing,” Saucedo said. “We’re not necessarily seeing the low income buyers.”

Neighborworks primarily offers resources and classes to prospective homebuyers, including some who qualify for programs like down payment assistance. However, the number of people who actually qualify is relatively small, she said.

“That’s the problem, is to find a client that fits perfectly into the box,” Saucedo said. “They have to have low enough income to qualify for the program and to be under the 80% median income, but they have to have a high enough income within that box to be able to afford a home on the open market.”

Low credit scores are another barrier for many people who come to Neighborworks for assistance, she said. About 10% of Neighborworks clients successfully find a home.

“It’s a small box, and it gets smaller and smaller as our housing prices continue to rise,” Saucedo said. “Income levels aren’t rising at the same rate, and we see that pool of people gets smaller and smaller every day.”

Waco Habitat for Humanity Director Brenda Shuttlesworth said while her organization is known for building homes from the ground up and handles many small-scale renovations, extensive home rehabilitation is not something it can tackle.

“So often, the homes are in such disrepair that by the time we’re contacted, it’s beyond our scope of work,” Shuttlesworth said.

Habitat’s average cost of building a home in Waco in 2016 was about $72,000, a number that increased to $90,000 by this year, Shuttlesworth said.

“You reach a point of diminishing returns,” she said.

Waco Habitat for Humanity primarily focuses on small-scale rehabilitation projects and repairs, as well as installing accessibility devices including ramps, she said.

“Our goal is to keep people in their homes as long as possible,” Shuttlesworth said.

Grassroots Community Development, meanwhile, is primarily known for its home ownership program but picked up the pace on a roof repair program in recent years with grant funding administered by the city.

Executive Director Mike Stone said the program has been receiving additional city funding for the last three years. Old homes with leaky roofs are an expensive fix, and no other local organizations were able to address the problem on a broad scale, he said.

“We kept getting a lot of phone calls for it,” Stone said.

Roof trouble is common in older homes, expensive to fix and can easily bring down a structure if not addressed quickly, he said. Grassroots repaired 47 roofs In 2018 and 31 in Waco so far this year, with more homeowners on the waiting list.

“Every one of those roofs we’re saving, we’re saving a house,” Stone said.

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