HomeMy WebLinkAboutPR 16791: IMPEDIMENTS TO FAIR HOUSING STUDY INTEROFFICE MEMORANDUM
HOUSING AND NEIGHBORHOOD REVITALIZATION
To: Steve Fitzgibbons, City Manager
From: Mike Mason, Director of Housing an `Neighborhood Revitalization
Date: November 21, 2011
Re: P.R. 16791
RECOMMENDATION:
I recommend City Council adopt Proposed Resolution 16791, authorizing the adoption of the
Analysis of Impediments to Fair Housing Study for the City of Port Arthur.
BACKGROUND:
Pursuant to Resolution #11 -115, the City of Port Arthur contracted with Community
Development Services ("CDS ") to provide the City of Port Arthur, Texas ( "the City ") with
technical services in support of conducting an Analysis of Impediments to Fair Housing Study.
Federal regulations (24 CFR 91) require state and local entitlement jurisdictions receiving
funding through the Consolidated Plan process update its Analysis of Impediments to Fair
Housing and submit certification that it is affirmatively furthering fair housing. This means that
the state and local entitlement jurisdictions will (1) conduct an analysis of impediments to fair
housing choice; (2) take appropriate actions to overcome the effects of impediments identified
through that analysis; and (3) maintain records reflecting the analysis and actions.
The Analysis of Impediments to Fair Housing Study will provide introduction, methodology (data
gathering), and summaries of experience and issues from various agencies and sources; (i.e.:
U.S. Bureau of the Census (demographic), Federal Financial Institutions Examination Council
(Home Mortgage Disclosure Act statistics), previously conducted Analysis of Impediments to Fair
Housing conducted by Port Arthur, TX), including prior experience and issues as identified in
previous reports, anecdotal information gathered from discussions with local stakeholders,
locally generated reports and other relevant data pertaining to the Port Arthur housing market,
patterns and the local economy.
BUDGETARY /FISCAL EFFECT:
N/A
STAFFING /EMPLOYEE EFFECT:
City administration staff will be responsible for administering the Analysis of Impediment to Fair
Housing Study.
SUMMARY:
I recommend City Council adopt Proposed Resolution 16791, authorizing the adoption of the
Analysis of Impediments to Fair Housing Study for the City of Port Arthur.
P. R. 16791
11 -21 -11 MM /Housing
RESOLUTION NUMBER
A RESOLUTION AUTHORIZING THE APPROVAL AND ADOPTION
OF THE ANALYSIS OF IMPEDIMENTS TO FAIR HOUSING STUDY
FOR THE CITY OF PORT ARTHUR THAT WAS CONDUCTED BY
COMMUNITY DEVELOPMENT SERVICES FOR THE CITY OF PORT ARTHUR.
WHEREAS, the Department of Housing and Urban Development awards Federal
Community Development Block Grant Program funds to the City annually, pursuant to the
Housing and Development Act of 1974; and,
WHEREAS, Federal regulations (24 CFR 91) that mandates State and local
entitlement jurisdictions receiving funding through the Consolidated Plan process are required to
conduct and update its Analysis of Impediments to Fair Housing and submit certification that it
is affirmatively furthering fair housing; and,
WHEREAS, pursuant to Resolution 11 -115, the City entered into a contract with
Community Development Services (CDS) to provide technical services in support of conducting
an Analysis of Impediments to Fair Housing Study; and,
WHEREAS, activities undertaken by the Community Development Services
principally provided benefit as has been determined by the parties and is established under the
guidelines of the Housing and Community Development Act of 1974 as amended; and,
WHEREAS, the City of Port Arthur hereby adopts its Analysis of Impediment to Fair
Housing Study as outlined herein and further described as delineated in Attachment 1.
NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT
ARTHUR:
Section 1. THAT the facts and opinions in the preamble are true and correct.
Section 2. THAT Federal regulations (24 CFR 91) that mandates State and local
entitlement jurisdictions receiving funding through the Consolidated Plan process are required to
conduct and update its Analysis of Impediments to Fair Housing and submit certification that it
is affirmatively furthering fair housing.
Section 3. THAT the City entered into a contract with Community Development
Services (CDS) to provide technical services in support of conducting an Analysis of
Impediments to Fair Housing Study.
Section 4. THAT the City of Port Arthur hereby adopts its Analysis of Impediment
to Fair Housing Study as outlined herein and further described as delineated in Attachment 1.
Section 5. THAT a copy of the caption of this Resolution be spread upon the
minutes of the City Council.
READ, ADOPTED AND APPROVED this day of
A.D., 2011 at a Regular Meeting of the City Council of the City
of Port Arthur, Texas by the following vote: AYES: MAYOR
COUNCILMEMBERS
•
NOES:
MAYOR
ATTEST:
CITY SECRETARY
APPROVED FOR FORM:
CITY ATTe ' /
APPROVED FOR ADMINISTRATION:
CITY MANAGER
ill • , l Atoih\o,
MIKE MAStN, DIRECTOR
HOUSING & NEIGHBORHOOD REVITALIZATION
ATTACHMENT 1
Executive Summary
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444 4th Street, Port Arthur, Texas 77640
Contact: Housing & Neighborhood Revitalization
Phone: 409- 983 -8259
Prepared by
Community Development Services
June 2011
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 1
Executive Summary
Contents
EXECUTIVE SUMMARY 3
National Fair Housing 3
Texas Fair Housing Act 4
Impediments Identified 5
SECTION I: INTRODUCTION AND METHODOLOGY 8
Introduction 8
Methodology 8
SECTION II: DEMOGRAPHIC AND ECONOMIC OVERVIEW 10
Demographic Profile 13
Overview of Housing Supply 25
Recommendations 36
SECTION 111: FAIR HOUSING STATUS, 2011 37
HUD Fair Housing Enforcement Activity 37
SECTION IV: PUBLIC SECTOR ANALYSIS 45
Overview _ 45
Priority Needs 57
SECTION V: FAIR HOUSING AND THE CITY OF PORT ARTHUR'S PRIVATE SECTOR 58
Lenders in the City of Port Arthur 58
Other Private Entities that Impact Fair Housing Choice 80
SECTION VI: SUMMARY OF PROGRESS AND CONCLUSIONS 85
Summary of Progress 85
Suggested 2011 Impediments 86
APPENDIX A 90
State of Texas 2011 Phase 1 for Disaster Projects 90
APPENDIX B 122
Texas Fair Housing Act 122
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2
Executive Summary
Executive Summary
Port Arthur is a City in Jefferson County within the Beaumont -Port Arthur
Metropolitan Statistical Area, Golden Triangle Region, of the State of Texas.
Conceived as early as 1837, the area came to be known as Sparks then
Aurora after early settlers and land speculators the moved to the shores of
Sabine Lake. The Eastern Texas Railroad, completed between Sabine Pass
and Beaumont just before the outbreak of the Civil War, passed about four
miles west of the area. The rails were removed during the Civil War leaving
few scattered settlers until 1886, when a destructive hurricane led residents
to dismantle their homes and move to Beaumont. By 1895 the community
became a ghost town. The abandoned community, however, soon became
the site of Arthur E. Stilwell's new city, Port Arthur.
Port Arthur was founded by Stilwell in the late 19th century, and was once
the center of the largest oil refinery network in the world.
BIG ARTHUR CRANE DELTA QUEEN
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National Fair Housing
The U.S. Department of Housing and Urban Development's (HUD) mission is
to promote non - discrimination and ensure fair and equal housing
opportunities for all. In an ongoing effort to provide services and activities
on a nondiscriminatory manner and to affirmatively further fair housing,
HUD is charged by law to implement and enforce a wide array of civil rights
laws, not only for members of the public in search of fair housing, but for
HUD funded grant recipients, such as Port Arthur, as well. HUD is also
charged with ensuring the successful operation of specific enforcement of
housing programs. The array of laws, executive orders, regulations, etc. are
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 3
Executive Summary
collectively known as civil rights requirements and called "Civil Rights
Related Program Requirements (CRRPRs).i
Nationwide, the right to Fair Housing is assured by the Federal Fair Housing
Acts of 1968 and 1988, as amended, which makes it unlawful to discriminate
in the sale, rental, financing, and insuring of housing.
The Port Arthur updated Impediment Analysis provides complete
demographic information regarding population, race /ethnicity, labor force,
unemployment, household make -up, income, tenure, age /condition,
supply /demand, and affordability.
Texas Fair Housing Act
The Fair Housing Act /Texas Fair Housing Act (TFHA) prohibits discrimination
in housing because of:
• Race
• Religion
• Color
• Sex
• National Origin
• Disability
• Familial status (including children under the age of 18 living with
parents or legal custodians; pregnant women and people securing
custody of children under 18).
Specific details of the TFHA appear in the Appendix.
FAIR HOUSING COMPLAINTS IN PORT ARTHUR SINCE 2006 AND STATEWIDE FOR
DISASTER COMMUNITY DEVELOPMENT PROJECTS
Even though discrimination in the private housing market is illegal, the
practice still persists to some extent. The City of Port Arthur's Fair Housing
Strategy addresses discrimination in housing through the enforcement of the
State and Federal Fair Housing Statutes. The Federal Fair Housing Laws
prohibit discrimination in housing due to race, color, national origin, religion,
gender, familial status, and disability.
1 HUD -FHEO Web Page
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4
Executive Summary
Within the City of Port Arthur, the Texas Workforce Commission, Civil Rights
Division, is responsible for the enforcement of fair housing laws, the
mediation /conciliation and the litigation of fair housing complaints. The
TWCCRD provides services and programs aimed at improving relationships
among all citizens of the state, while seeking to ensure equal opportunities
in the areas of employment, housing, public accommodations, recreation,
education, justice and governmental services.
The Commission also enforces the Texas State Fair Housing Law and is
substantially equivalent with the Office of Fair Housing (Title VIII) within the
U.S. Department of Housing and Urban Development.
There were only five complaints received in Port Arthur during the past five
years. Three were based on Race, one on Race and Disability, and one on
Sex and National Origin. Two complaints resulted in Successful Conciliations,
two resulted in No Cause determinations, and one complaint was withdrawn.
There were no cases filed based on color, religion, or family status.
Port Arthur Outcomes Number
1/1/2006 to 12/31/2010
Cause Findings 2
No Cause Findings 2
Administrative and Other Closures 1
Pending (January 1, 2011) 0
Tota I 0
In addition, Port Arthur participates in Disaster Projects as a direct result of
Hurricanes Dolly, Ike, and Rita. Since the City works closely with the State of
Texas regarding the Disaster Projects, Port Arthur is also part of the State's
Analysis of Impediments Phase 1 approved by HUD in March, 2011.
Since the two A.I.'s are compatible, the Port Arthur A.I. will coordinate both
Analyses and Plans to Affirmatively Further Fair Housing.
Impediments Identified
The Fair Housing Analysis Update for Port Arthur includes impediments to
fair housing choice currently being addressed and the plans recommended to
remedy them. The City's prior Analysis of Impediments was conducted in
2006 and included issues that are carried over to this update. This update is
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5
Executive Summary
based on available public and private sector information from the City of Port
Arthur, the real estate, insurance and banking industries, the Housing
Authority, and the Fort Worth, as well as, Houston HUD Offices of Fair
Housing and Equal Opportunity and Community Planning and Development.
Specifically based upon the current data available, the following are the
impediments and suggested actions that have been identified for the City.
The City documents and reports its actions to HUD on the removal of
impediments through Annual Reports which are a part of the Consolidated
Plan Process.
PORT ARTHUR 2006 IMPEDIMENTS
The City of Port Arthur is committed to equal housing opportunity. Despite
its commitment and efforts over the years, unfair housing practices,
procedures or policies continue to exist in the City.
The City gathered and examined the existing data on policies, practices,
procedures, patterns, and conditions affecting the location, availability, and
accessibility of housing. Because of its findings, the City identified apparent
Impediments:
• Lack of Substantive Fair Housing Initiatives.
• Flood damaged /dilapidated /abandoned housing units in minority
neighborhoods.
• Need for financial education and literacy in homeownership /rental.
• Potential minority discrimination in homebuyer lending market
Specifics of the impediments identified in 2006 are found in Section VI,
Summary of Progress and Conclusions.
ASSESSMENT OF ACCOMPLISHMENTS SINCE 2006
The City prepared an Analysis of Impediments to Fair Housing in 2006 and
has reported in each of its annual CAPERS updates to that plan.
In past and current Port Arthur's Consolidated Plans, the City integrated
actions to encourage non discrimination and fair housing choice for all
individuals into its annual activities and efforts to remove barriers to
affordable housing. The City performed the following activities:
The City has been working closely with the Golden Triangle Fair Housing
Consortium (Port Arthur, Beaumont, and Orange) local housing providers,
landlords, non - profits government, service providers, and funding
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 6
1
Executive Summary
institutions to assess the housing needs and promote an organized
mechanism for address Fair Housing needs.
City and local housing providers work together to promote fair housing, hold
conferences, distribute materials, educate both tenants and landlords, and
continually strive to limit the local violations to the Fair Housing Act.
Port Arthur has accelerated efforts to rehabilitate or demolish substandard
housing and build on vacant Tots, as well as, planning to revitalize the
downtown area.
PORT ARTHUR AND SE TEXAS 2011 IMPEDIMENTS
The City of Port Arthur actively seeks to affirmatively further fair housing.
One of the goals of the Annual Fair Housing Action Plan is to educate people
on Fair Housing laws. As a part of the 2011 Consolidated Plan planning
process, access and understanding the State and Federal Fair Housing Laws
tell us that fair housing is within reach in Port Arthur. Barriers exist,
although, they are not quite within the realm of public control. These
limitations are largely ones that exist within the individuals themselves, such
as lack of education, language barriers, suspicion of public agencies, and
other cultural or social characteristics. The City and Region can reach out to
the less educated, to speakers of other languages, and to those who might
not trust government; but overcoming cultural impediments is, to a great
extent, under the control of the citizens themselves. Each citizen, whether or
not a member of a protected class, has the opportunity —and some would
argue, the responsibility —to make fair housing a standard practice, by
educating themselves and others of the right each American has to live in
housing free of discrimination.
The 2011 Port Arthur Impediments and State Phase 1 Fair Housing Plans for
SE Texas are presented, with strategies to deal with them, in Section VI.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 7
Section I: Introduction and Methodology
SECTION I: Introduction and Methodology
Introduction
Fair Housing is the right of individuals to obtain the housing of their choice,
free from discrimination based on race, color, religion, sex, disability, familial
status, or national origin.
The right to Fair Housing is assured by the Federal Fair Housing Acts of 1968
and 1988, as amended, which makes it unlawful to discriminate in the sale,
rental, financing, and insuring of housing.
Under the Fair Housing Act an aggrieved person may, not later than one
year after an alleged discriminatory housing practice has occurred, file a
complaint directly with the U.S. Department of Housing and Urban
Development (HUD), or a State or local agency enforcing laws that are
"substantially equivalent" to the Fair Housing Act. Upon the filing of such a
complaint, HUD has the responsibility to serve notice of the complaint and
conduct an investigation into the alleged discriminatory housing practice.
Since the "substantially equivalent" Texas Workforce Commission, Civil
Rights Division, (TWCCRC) is responsible for the enforcement of fair housing
laws, the mediation /conciliation and the litigation of fair housing complaints,
the TWCCRC provides services and programs aimed at improving
relationships among all citizens of the state, while seeking to ensure equal
opportunities in the areas of employment, housing, public accommodations,
recreation, education, justice as well as governmental services and is
empowered to accept complaints, serve notice of complaints, conduct
investigations into alleged discriminatory housing practices, make
determinations, and adjudicate cause findings.
Methodology
The Analysis of Impediments (AI) conducted by the CDS team involved a
variety of data collection and analysis techniques, including:
Analyzing demographic data available through the U.S. Census Bureau, as
well as descriptive data pertaining to the housing market and trends in real
estate over the past ten years.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 1 -8
Section I: Introduction and Methodology
Examination of mortgage lending trends through the analysis of data
available through the Home Mortgage Disclosure Act (HMDA).
Enacted by Congress in 1975 and implemented by the Federal Reserve
Board's Regulation C, HMDA requires lending institutions to report public
loan data. Using the loan data submitted by these financial institutions, the
Federal Financial Institutions Examination Council (FFIEC) creates aggregate
and disclosure reports for each metropolitan area (MA) that are available to
the public at central data depositories located in each MA.
LOCAL GOVERNMENT STAFF AND COMMUNITY REPRESENTATIVES
A review of source documents included the most recent AI (conducted in
2006), the Consolidated Plan, HUD Fair Housing Records, as well as the
City's most recent CAPERs.
To begin an examination of current Fair Housing policies and strategies, this
report will look at past accomplishments and look at the Golden Triangle
Area, Jefferson County, and other Texas communities to provide a basis of
comparison between what the Port Arthur Fair Housing Plan proposes to do
and further steps it can and should take to affirmatively further Fair Housing.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 1 -9
Section II: DemographiclEconomic Overview
Section II: Demographic and Economic Overview
This section profiles the City of Port Arthur's demographic and housing
trends by examining and mapping data from the 1990 decennial Census,
2000 decennial Census, 2007 -2009 American Community Survey, and other
relevant sources. Data from the 2010 decennial Census are limited at this
time and continue to be released as they become available. Where possible,
2010 data are included as noted.
This section then provides an analysis of the area's housing market and a
household's ability to purchase a home. Finally, the section concludes with a
synopsis of housing problems experienced by residents, such as cost burden,
physical defects and overcrowding.
The following table provides an overview of the City of Port Arthur's
demographic and housing profile for 1990, 2000 and 2009, with limited
figures for 2010. The population within the city declined by 1.6 percent
between 1990 and 2000 to reach 57,756 (from 58,724 in 1990), and fell
again to 53,818 (6.8 percent decline) by 2010. This occurred against a
backdrop of growth countywide (5.3 percent increase from 1990 to 2000,
and an additional 0.1 percent to 2010).
Overall Profile: 1990 to 2010
1990 2000 2009 2010
Port Jefferson Port Jefferson Port Jefferson Port Jefferson
Arthur County Arthur County Arthur County Arthur County
Population 58,724 239,397 57,756 252,051 55,636* 242,677* 53,818 252,273
Percent 65 16.9% 14.0% 15.8% 13.6% 14.8% 13.1%
or Older
Households 22,286 90,403 21,869 92,993 22,313* 92,822* 20,183 93,441
Un tsing 25,746 101,289 24,713 102,080 26,158* 105,291* 23,577 104,424
Percent of 13.3% 10.6% 11.6% 9.0% 14.7 %* 11.8 %* 14.4% 10.5%
Vacant Units
Homeowner 65.0% 66.0% 62.2% 65.9% 60.3% 64.0%
ship Rate
Source: Census 1990, 2000, 2010 and 2007 -2009 ACS
* Figures in gray cells are estimates and are included to provide complete 2007 -2009 ACS data; 2010 data are used whenever possible and are
referenced in the discussion.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -10
Section II: Demographic/Economic Overview
At the same time, the number of households declined by 1.9 percent from
1990 to 2000, and by another 7.7 percent by 2010. From 1990 to 2000, the
percent of persons 65 and older in the City of Port Arthur declined from 16.9
to 15.8 percent, and fell again to an estimated 14.8 percent in 2009. Despite
this, the median age of the population has risen from 34.1 years in 1990 to
34.3 years in 2000, and an estimated 35.6 years in 2009.
The 1990 Census reported a labor force of 23,771 persons in the City of Port
Arthur. In 2000, Census data reported a labor force of 22,857 (a decline of
3.8 percent) and a calculated unemployment rate of 13.3 percent (up from
12.8 in 1990). American Community Survey 2009 data estimate 22,693
persons in the labor force (representing a further decline of 0.7 percent),
and a calculated unemployment rate of 10.8 percent. Bureau of Labor
Statistics data show a 2009 unemployment rate of 9.5 percent in the MSA.
By comparison, the 2009 unemployment rate for the state of Texas was 7.5
percent, 1.8 points below the national rate. More recent full -year data show
the 2010 unemployment rate for state of Texas to be 8.2 percent, as
compared to a national rate of 9.6 percent. The first four months' data for
2011 show that unemployment rates decreased to 8.9 percent nationally and
remained at 8.2 percent in Texas, but rose to 11.2 percent in the Port Arthur
MSA (from 10.6 at the end of 2010).
The graph below illustrates the national, state and local unemployment rates
over the last ten years.
2 Bureau of Labor Statistics, Unemployment Rates for Metropolitan Areas, accessed 5/11/11.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -11
Section II: Demographic/Economic Overview
Unemployment Rate History
12.0 -
Beaumont -Port Arthur MSA
10.0
Beaumont -Port Arthur MSA U.S. U.S.
8.0
TX
Beaumont -Port Arthur MSA TX
•
•
6.0
TX U.S.
•
17C
4.0 U4
2.0
0.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
(4 mos.)
61Beaumont- PortArthurMSA 7.2 7.9 8.7 8.2 7.6 5.9 5.3 6.5 9.5 10.6 11.2
-- TX 5.0 6.4 6.7 6.0 5.4 4.9 4.4 5.0 7.5 8.2 8.2
••■••■•U.S. 4.7 5.8 6.0 5.5 5.1 4.6 4.6 5.8 9.3 9.6 8.9
Source: Decennial Census (1990, 2000), 2007 -9 ACS 3 -year estimates, Bureau of Labor Statistics
American Community Survey 2009 data showed that the largest numbers of
residents within the City of Port Arthur were employed in the Education,
health and social services industry (22.6 percent), followed distantly by
Construction (13.6 percent) and Manufacturing (13.0 percent). Two of these
industries ranked in the top three in 2000, with Education, health and social
services still in the top position (22.0 percent) and Manufacturing second
(13.1 percent). Retail trade was third at 12.6 percent. Ten years earlier,
Retail trade ranked first (20.6 percent), Education, health and social services
second (19.2 percent), and Manufacturing in the third position (17.7).
The graph below illustrates the distribution of the City of Port Arthur
employed residents by industry in all three years. The continued rise of the
Education, health and social services industry and the dramatic decline of
Manufacturing and Retail trade are clearly visible in the illustration.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -12
Section II: Demographic/Economic Overview
Employed Residents by Industry, 1990 -2009
5,000
0 1990 -
4,500 0 2000
4,000 — , • 2009 _
v
3,500 r
3,000
2,500
N
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Demographic Profile
POPULATION
The population of the City of Port Arthur declined by 1.6 percent between
1990 and 2000 (from 58,724 to 57,756), while the population throughout
the county increased by 5.3 percent. The following population pyramids
display the change in the city's age distribution during this time period.
As illustrated by the first pyramid, the most populated cohort in 1990 was
comprised of those aged 0 -9 years (16.2 percent), followed by those aged
10 -19 (14.8 percent) and 30 -39 (14.8 percent), when these three groups
of the population—essentially re resentin
together comprised 45.7 percent o f representing
families with young children.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -13
Section II: Demographic/Economic Overview
Population 1990
85+ ■ Male
■ Female
75-84
65 -74
60-64
50 -59
40 -49
30 -39
20 -29
10-19
0 -9
I
6,000 4000 2 0 2 4 6
Source: Census 1990 (517 3)
The 2000 pyramid illustrates that most of the shift in age distribution is
attributable to the aging of the population. The youngest cohort is once
again the largest (16.0 percent) and is followed closely by those aged 10 -19
(15.7 percent) and those aged 40 -49 (14.0 percent), both of which were
among the largest groups ten years earlier. Together, these three cohorts
made up 45.8 percent of the total population in 2000. Once again, this
distribution pattern describes young families with children, particularly
illustrating the 0 -9 and 30 -39 cohorts from 1990 now aged ten years.
The greatest growth from 1990 to 2000 was experienced among those aged
40 -49, growing by 3.5 points, while the cohort represented by ages 30 -39
lost the greatest percent in the population, causing their ratio to drop from
14.8 percent of the population in 1990 to 13.0 in 2000. Most cohorts lost
population from 1990 to 2000, with only those from 10 -19, from 40 -49,
from 50 -59, and those over 85 gaining.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -14
Section II: DemographiclEconomic Overview
Population 2000
8i+ oMale
■ Female
75-84
65 -74
60-64
50 -59
40-49
30 -39
20 -29
10 -19
0-9
I I ,
6,000 4,000 2,000 0 2,000 4,000 6,000
Source: Census 2000 (STF 3)
These changes are illustrated in the graph below, which shows the net and
percent changes by cohort from 1990 to 2000. Blue bars on the left
represent increase of male population, while red bars on the right represent
increases among females. When the bars are reversed, this illustrates a Toss
in the population, such as occurred among those aged 0 -9, 20 -39, and 60 to 74.
Net Population Change 1990 -2000 Percent Population Change 1990 -2000
+Male oFemalel
85+ 31.5%
1 75 -84 7.5.% r
4.3%
65 -74 18.9%
60 -64 CI 32.9%
50 6-1% 0.8%
40 37.2%
30 - 39 11.3% ® 15.6%
20 - 29 57% I 1.5%
,'. 10 - 19 2.7 %4 7.2%
0.8 5.3 %' 0.2%
1500 1000 500 0 500 1000 60.0% 40.0% 20.0% 0.0% 20.0% 40.0% 60.0% 80.050 100.0 %.120.D% 140.0%
Source: Census 1990, 2000 (STF 3)
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -15
Section II: Demographic/Economic Overview
American Community Survey 2009 data estimate the largest cohort to be
those aged 10 -19 in slightly greater proportion than ten years earlier (16.0
percent, as compared to 15.7). By 2009, the "infant cohort" of those aged 0-
9 comprised the second largest cohort in the City of Port Arthur (15.0
percent), with those aged 20 -29 the third largest (13.1 percent).
Population 2009
85+ OMale
■ Female
75-84
65 -74
IMME
60-64
50 -59
40-49
30 -39
-s
20 -29
ice®
10-19
I 1 I ■11111111111111•1111■
0 -9
5,000 4,000 3,000 2,000 1,000 0 1,000 2,000 3,000 4,000 5,000
Source: 2007 -2009 American Community Survey(3- yearestin tes)
The greatest point gain was among persons aged 50 -59, which increased by
3.9 points. Where the three largest cohorts in 2000 were made up of those
aged 0 to 19 and 40 to 49 (comprising 45.8 percent of the population), the
three largest cohorts in 2009 were those aged from 0 to 29, comprising 44.0
percent of the population. Despite this gain among the youngest cohorts, the
median age continues to rise because of the loss among the middle cohorts
and gain among the very oldest.
At the same time, the highest percent loss was experienced by those aged
30 -39, the 2.3 -point decline representing the loss of 1,550 individuals —the
highest numeric population loss among all groups. Overall, the only two
cohorts to gain population was estimated to be those aged 50 -64, increasing
by nearly 4 points and over 2,300 individuals.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -16
Section 11: DemographiclEconomic Overview
Net Population Change 2000 -2009 (est) Percent Population Change 2000 -2009 (est)
°Male ■FemaleI
85+ 31.1% _ 24.5%
75 -84 E 1,. 9%
65 26.2%
17- 60 39.8%
=a '
50.59 22.7 %. not
® 40-49
i
30-39
4 11
C 20
i
I L 10.19 13.2%
1500 1000 500 0 500 1000 1500 2000 60.0% 40.0% 20.0% 0.055 20.0% 40.0% 60.0%
Source: Census 1990, 2000 (STF 3); 2007 -2009 American Community Survey (3 -year estimates)
RACE/ ETHNICITY
In 2000, the City of Port Arthur's Race Distribution 2000
population was 38.9 percent White,
....""
43.3 percent Black, 0.5 percent -pa M... •
American Indian /Alaska Native, 5.9 fi3.3
percent Asian, 9.2 percent some
other race, and 2.3 percent two or esn05�nadiae/
Other
more races. The Hispanic population , 9.1% 59 %
comprised 17.5 percent of the city's
total population. ,� Two or More
2.3%
Census 2010 data indicate a shift in
Race Distribution 2010
population composition, showing
r:..I the population to be 36.1 percent
Black _...K ; '16 ' White, 40.7 percent Black, 0.7
percent American Indian /Alaska
American Indian/
Native, 5.9 ercent Asian 14.1
Alaskan Native � p �
Other 0.7
4.,% percent Other and 2.4 percent two
or more races. The Hispanic
population has increased to 29.6
SaRe_,o,a Dean., Cerny Two or More
2.4% percent.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -17
Section II: Demographic/Economic Overview
The map below illustrates the distribution of the black population in the City
of Port Arthur in 2000. Shaded red on the map below, the highest
concentrations are indicated in block groups on the city's east boundary, and
block groups 0069.00 -2 and 0069.00 -3 to the west, where they comprise
between 75 and 100 percent of the population. Immediately adjacent to
these are block groups where black residents comprise between 50 and 75
percent of the population. In 2000, there were no black residents in the
block groups to the northeast, immediately adjacent to Orange County.
Figure 1: Percent Black Population (2000)
r
`: ' - 7 Orange County
j___
5
t4 0
Jefferson County
) : . _
Pet Black Population
o%
0.1 % -25%
25.1 % - 50%
50.1 % - 75%
am 75.1 % - 100%
The highest concentrations of Hispanic residents are located in block groups
0065.00 -2 and 0101.00 -3, where Hispanics comprise between 60 and 80
percent of the population. There are four nearby block in which Hispanics
comprise between 40 and 60 percent of the population. In 2000, there were
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2-18
Section II: Demographic /Economic Overview
no Hispanic residents reported in block groups illustrated in blue in the map
below (, particularly, on the city's east side and in Orange County).
Figure 2: Percent Hispanic Population (2000)
L,--7 Orange County
`✓
D
- 4 11)
/
% /7-, /
_.r -r' - `
Jefferson County
1 r
Pct Hispanic Population f`
'
0.1 % -20 %�
20.1 % -40%
40.1 % -60%
60.1 % -60%
HOUSEHOLD CHARACTERISTICS
While slightly below the 1990 rate, families were still the most prevalent
type of household, comprising 67.9 percent of all households in 2000. Of
these, 62.4 percent were small (2 to 4 persons) family households.
According to American Community Survey estimates, family households
continued to become less prevalent in Port Arthur, estimated to have
decreased to 64.3 percent of all households by 2009.
The table below shows the total number of households by type in the City of
Port Arthur in 1990, 2000 and 2009. Households with persons 65 years or
older accounted for 28.6 percent of all households in 2000.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2.19
1
Section II: DemographiclEconomic Overview
Households by Type
1990 2000 2009
Household Type Number % of Number % of Number % of
Total Total Total
Total Households 22,286 100.0% 21,869 100.0% 22,313 100.0%
Family Households 15,563 69.8% 14,842 67.9% 14,339 64.3%
Non - Family Households 6,723 30.2% 7,027 31.5% 7,974 35.7%
Large Families (5 or More) N/A N/A 2,688 17.8% N/A N/A
Small Families (2 to 4) N/A N/A 9,262 82.2% N/A N/A
65 and older (families & non - families) N/A N/A 6,256 28.0% N/A N/A
INCOME PROFILE
The City of Port Arthur's median income in 2000 was $26,455, which is 9.9
percent below the overall county median income of $34,706. In 2000, the
income range with the highest percent of households in the City of Port
Arthur was Tess than $10,000, with 19.9 percent of the population earning in
this range. The second highest earning level was $15,000 to $24,999, with
15.8 percent of households at this level. At the same time, 12.2 percent of
households earned between $10,000 and $14,999. Together, 47.9 percent of
the city's households had incomes of less than $25,000 per year.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -20
Section II: DemographiclEconomic Overview
Income Distribution (2000, 2009)
$200, 000 or more ®2009
2000
$150 - 199,999
$100- 149,999
$75 -99, 999
$50- 74,999 _
$35-49,999
$25- 34,999
$15- 24999
$10- 14,999
Less than
$10,000 -
i
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500
Number of Households
Source: Census 2000 )STF 3), 2009 American Community Survey
By 2009, the median income was estimated to have risen to $30,339 —a
14.7 percent increase. At the same time, the median income in the county
overall was estimated to be $41,420, representing a 19.3 percent increase
countywide. The effect of the higher increase throughout the county than
citywide resulted in the city median income dropping from 23.8 below that
of the county to 26.8 percent below.
ACS 2009 estimates indicate that the highest percent of households now
were those who earned between $50,000 and $74,999 (16.7 percent),
followed by those earning between $15,000 and $24,999 (15.9 percent).
Households earning Tess than $10,000 and those earning from $10,000 to
$14,999 are now represented by 15.2 and 10.5 percent of households,
respectively (25.7 percent of all Port Arthur households, combined).
Together, 41.5 percent of the city's households had incomes of less than
$25,000 per year.
The map below geographically illustrates economic stratification in the City
of Port Arthur, comparing each block group's median income to that of the
entire city. There are no block groups with a median income of less than 30
percent of the city's median. Two low- income (below 50 percent) block
groups are visible shaded in orange —one east of the city center (0066.00 -2)
and one to the west (0070.01 -1). Detailed analysis of these images does not
reveal there to be any correlation between income and race /ethnicity.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -21
1
Section II: DemographiclEconomic Overview
Wealthier households predominate the perimeter of the city center.
Particularly noteworthy is correlation of high income to low black or Hispanic
population, such as is the case in block groups adjacent to Orange County.
Figure 3: Income Distribution (2000)
,
t /7 O range County
LL--, 4 . ZN ,
Jefferson County
Income as Pct of Median
=Less than 30%
30.1 % - 50%
50.1 % -80%
BO 1% - 120%
120.1 % -250% I
According to HUD, the current (2010) median income for a family of four in
the City of Port Arthur is $55,550. The table below provides 2010 income
limits by family size.
3 U.S. Department of Housing & Urban Development: Annual Income Limits for the CD Program, May 2011
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -22
Section II: DemographiclEconomic Overview
Income. Limits 2010
Family Size 1 2 3 4 5 6
Income Limit 31,100 35,550 40,000 44,400 48,000 51,550
TENURE
Tenure is calculated as tenant or owner occupancy as a proportion of
occupied housing units. In 1990, the city's homeownership rate was 65.0
percent, which was just one point below the county rate of 66.0 percent, and
just below the national rate of 66.2 percent. The rate declined to 62.2 in
2000, while the county rate slipped to 65.9 percent. Both rates were
estimated to have declined again in 2009 when the county rate was
estimated at 64.0 percent and homeownership in the City of Port Arthur was
an estimated 60.3, while the estimated 2009 national rate was 66.9 percent.
The map below shows the distribution of the 13,574 owner - occupied
households throughout the City of Port Arthur in 2000.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -23
Section II: Demographic /Economic Overview
Figure 4: Homeownership (2000)
Orange County
'X
/> "C
Jefferson County \
Pct Owner -Occupied
®Upto20%
20.1 % -40% 't
40.1 % - 60%
60.1 % - 80%
80.1 % - 100%
Overall, the City of Port Arthur has rather low homeownership rate. While it
is no surprise that areas with high income levels would also have high rates
of homeownership, it is somewhat unexpected to discover the rather high
homeownership rate of between 60 and 80 percent combined with median
household incomes of between just 50 and 80 percent of the city's median in
block groups located to the city's east, previously identified as those with
particularly high concentrations of black residents. The combination of high
homeownership rates and low incomes, such as described by these findings,
indicates stable populations living in homes of older construction that may
no longer have mortgages, thus alleviating a housing payment.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -24
Section II: DemographiclEconomic Overview
Overview of Housing Supply
In 2000, there were 24,713 housing units in the City of Port Arthur, a net
decrease of 4.0 percent from 1990, reflecting a Toss of 1,033 units. Between
2000 and 2009, the housing stock increased by 5.9 percent to an estimated
26,158 housing units
Housing Units by Tenure
Units 2000 2009 Change
Number Percent Number Percent Number Percent
Owner - Occupied 13,574 54.9% 13,450 51.4% -124 -0.9%
Renter - Occupied 8,260 33.4% 8,863 33.9% 603 7.3%
Vacant 2,879 11.6% 3,845 14.7% 966 33.6%
Total 24,713 100.0% 26,158 100.0% 1,445 5.8%
AGE AND CONDITION
Based on the 2000 census, 51.1 percent of the total housing stock in the
City of Port Arthur was built in 1959 or earlier, and would now be more than
50 years old. These data also indicate that over 83 percent of the housing
stock was built prior to 1980, making lead -based paint a potential hazard.
4 Census 1990, Summary File 3, H027: Tenure By Year Structure was Built (Housing Units) and Census 2000, Summary File 3,
H027: Tenure By Year Structure was Built (Housing Units),
5 Census 2000, Summary File 3, H027: Tenure By Year Structure was Built (Housing Units) and 2007 -2009 American
Community Survey 3 -Year Estimates, B25034: Year Structure Built (Housing Units).
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -25
Section II: DemographiclEconomic Overview
Age of Housing Stock (2000)
16.5%
32.4% 39.9%
0 1939 or earlier
• 1940 to 1959
O 1960 to 1979
0 1980 to 2000
sorre: <em: zaoo Isry nl
2007 -2009 American Community Survey estimates indicate that 48.4
percent of the city's housing stock was built prior to 1959, suggesting that
some older housing units were lost from the housing inventory in the nine -
year interim. Additionally, the percent of housing stock built prior to 1980
decreased to 78.9 percent, indicating loss of some newer stock.
Age of Housing Stock (2009, est)
21.1%
36.5%
30.5% 1
0 1939 or earlier
• 1940 to 1959
0 1960 to 1979
O 1980 or later
Saree:2®7 -2009 Amerman Community Survey
When compared to the national average of 56.0 percent built since 1980,
the City of Port Arthur's housing stock is considerably older than most. Most
older stock can be expected to need substantial financial investments in 1
major structural systems to continue to remain sound and livable. For low -
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -26
I
Section II: DemographiclEconomic Overview
income owners, these repairs are frequently unaffordable, and deferred
maintenance hastens the deterioration of their units. For low- income
renters, their housing does not generate enough revenue for landlords to
make improvements without raising rents.
VACANT UNITS
Vacancy is a proportion of unoccupied units to all housing units. In 2000,
Port Arthur's vacancy rate was 11.6 percent, which was considerably higher
than the Jefferson County rate of 9.0. According to the 2010 Census, the
200 rate had increased to 14.4 percent in the city, and rose to 10.5 percent
in the county.
The map below shows the distribution of vacancies throughout the City of
Port Arthur. The highest vacancy rate (26.7 percent) is found in block group
0053.00 -2, located near the city center and clustered with others of similar
characteristics. These particular block group also stand out among those of
low incomes (between 50 and 80 percent of the area median), but rather
high rates of homeownership (between 60 and 80 percent). Also significant
is that 80 to 100 percent of these block groups' residents are black, and in
some (0053.00 -2, 0061.00 -1 and 0061.00 -2) up to 20 percent are Hispanic.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -
Section II: Demographic/Economic Overview
Figure 5: Percent Vacancies by Block Group (2000)
1
C 7 _ Orange County
! r
'',,.�v \
';? `
lid
'�
7
, c am.
, ` "
y--
i
Jefferson County 1
■
„\
t ,.., l
Pct Vacant Units
5.1 % -10% c,
10.1 % - 11 .5%
-_- 11.6 % -20%
all 20.1 % -30%
i
HOUSING DEMAND VERSUS SUPPLY
The following two graphs compare the housing demand versus the housing
supply in the City of Port Arthur as of 2000. The first displays the total
number of households distributed among their affordable home ranges (both
rental and owned units). In this graph, the term demand represents the
numbers of households at each income level shown ($0- $9,999, $10,000-
$19,999, etc.). The term supply represents all housing units —that is, rented
and owned, occupied and vacant — valued at appropriate affordability for
each income level.
In 2000 there were 4,359 households that earned Tess than $10,000.
Assuming that an affordable home value is roughly three times a
household's annual income, this income group can afford a home valued at
no more than $29,999. In 2000 in the City of Port Arthur, there were 7,620
homes valued in this range — nearly twice the number to satisfy the demand
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -28
Section 11: DemographiclEconomic Overview
at this level. The same is true of housing available for those earning up to
$19,999.
Households by Purchasing Power Range versus
All Units by Income Range* (2000)
10,000 -... ... _. __ . - ... ._ .. _. .__... _... _..
9,000 -
8,000
7,000
6,000
5,000
O • 4,
3,000 - ■ I ■
2,000 -
1,000 - ■ ■
imm
0
0- $9,999 $10,000 - $19 $20,000 - $34 $35 $49 $50,000 - $74,999 $75 $99,999 $100
DDemand 4 4,453 4 . 3 , 303 2 1 1
' 7 9 4 775 205 57 91
Purchasing Power by Income Range
Source: Census 2000 (STF 3)
* for all households
There is a lower supply than demand for all income levels above $20,000,
illustrating that high- income households purchase homes well below their
affordability levels, causing them to compete for housing with those at lower
incomes.
The graph below shows the gap between the supply and demand of housing
units at each income level. For example, the demand for 4,359 units and
supply of 7,620 (above) creates a surplus of 3,261 units (see graph below
and table above). In other words, there were 3,261 fewer households
earning Tess than $10,000 annually seeking housing than there were housing
units in their affordability range.
At the next level, the demand of 4,453 units and supply of 9,041 creates a
surplus of 1,789 units. Combined with surplus stock from the lower income
level, the cumulative effect is that there is ample housing for households
earning Tess than $20,000. When added to the surplus of 3,261 units from
the previous income level, there is a net surplus of 7,849 housing units for
households at these two income levels combined.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -29
Section II: Demographic/Economic Overview
A review of the cumulative housing supply and demand (yellow line) shows
that in 2000 there was ample housing for all households, and cumulative
surplus of 376 units (as of the 2000 Census). This surplus indicates that
there are sufficient units for all households that accept living in housing at or
below their affordability levels. However, the shortage of housing for
households earning incomes above $20,000 means that most households in
Port Arthur were competing for housing priced in the affordability ranges
that correspond to those earning below $19,999.
Housing Gap (2000)
10,000
■ Surplus/Deficit
8,000 — 7,849 • Cumulative Gap
• • 7,748
6,000 —
♦ 5,220
4 4,000 —
3,261
o • 2,476
, 2,000 —
z
• 1,314
• 376
0 1 1 1 1 1 1 El 1 1
(2.000) —
4 45
(4.000) — - -
0- $9,999 $10,000 - $19,999 $20,000 - $34,999 $35,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000+
38% 76% 132% 189% 283% 378% Over378%
Income Range and as Percent of Area Median
Source: Census 2000 (STF 3)
Estimates from the 2007 -2009 American Community Survey suggest the
shifts illustrated in the following graphs. Housing availability improved for
households earning from $20,000 to $49,999, but still falls short of demand
at the highest levels, where it continues to impact lower- income households.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -30
Section II: Demographic!Economic Overview
Households by Purchasing Power Range versus
All Units by Income Range* (2009, est)
9,000 - ---
8000
7,000
6,000
N
5,000
2 4,000
4,
= 3000
2,000 ,,■
1
0 •
0- $9,999 $10,000 - $19 $20,000 - $34 $35,000 - $49 $50,000- $74,999 $75 $99,999 $100
oDemand 3,381 4,119 4,855 2 3 2 1,466
•Supply 5,301 7,172 7,848 2,716 897 331 223
Purchasing Power by Income Range
Source 2009 American Community Survey
`for all households
The demand for 3,381 units and supply of 5,301 at the lowest level reveals a
surplus of 1,920 units -about two - thirds of the surplus in 2000. Important to
note is that a home priced at less than $30,000 in 2000 was available to
households earning up to 38 percent of the area's median income. By 2009,
this home was available to those earning up to just 33 percent of the area's
median income. Because the price of the home is held constant against a
rising median income, the affordability measure decreases.
At the next price point, the demand for 4,119 units and supply of 7,172
amply serves the needs of households earning from $10,000 to $19,999.
This trend continues up to households with annual incomes of $50,000 and
above. However, the continued shortage of housing units at the highest
levels causes the highest earners to compete with those from lower income
levels for housing priced near and well above the median. Ultimately, the
City of Port Arthur has an estimated net surplus of 2,175 housing units.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -31
Section II: DemographiclEconomic Overview
Housing Gap (2009, est)
10,000 —
ta, Surplus /Deficit
7,987 • Cumulative Gap
8,000 — • • 7,959
6,000 —
• 4,973 • 5,124
4,000 —
♦ 3,418
"o
3,053 Z175
a 2 —
1920 •
E
p 1 1 1 1 1 1 ® 1
- 1, 706
(2.000) —
(4,000) _.
0- $9,999 $10,000 - $19,999 $20,000 - $34,999 $35,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000+
33% 66% 115% 165% 247% 330% Over330%
Source: 2009 American Community Survey Income Range and as Percent of Area Median
HOUSING AFFORDABILITY
Housing affordability is calculated as 30 percent of income for rent, and 28
percent of income for homeownership. The difference is to allow for
additional costs, such as utilities, that are customarily included in a tenant
household's rent, but are borne by the household's income as homeowners.
In the City of Port Arthur, the current median cost for a home is $99,900
Presuming a down payment of 5 percent ($4,995) and an interest rate of 4.5
percent, an estimated monthly payment (PITI) of $478 makes the home
affordable to a household earning $20,499 (or 62.4 percent of the area's
median income).
According to the National Low - Income Housing Coalition's "Out of Reach"
database, in 2011, the City of Port Arthur's median gross rent for a two -
bedroom unit was $697. As 30 percent of annual income, this rent would be
affordable to a household earning $27,880, or 91.9 percent of the area's
median income. Three - bedroom rental housing was reported to cost $864.
6 Retrieved from www.realtor.com, accessed 5/6/10.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -32
Section II: DemographiclEconomic Overview
Affording this rent requires an annual income of $34,560, and is affordable
to households earning 113.9 percent or more of the area's median income.
In general, rental housing in the City of Port Arthur is affordable for those
who earn an income near the city's median.
The first table on the following page illustrates the income needed to afford
a home of the 2011 median home value in the City of Port Arthur, based on
interest rates of 4.5 and 4.75 percent with a 5- percent down payment.
The second table illustrates the price of a home that households paying the
2011 Fair Market Rent (FMR) for two- and three - bedroom units can afford, if
they were to own rather than rent. These charts assume an affordable rental
housing cost to be 30 percent of a household's monthly income and an
affordable ownership cost to be 28 percent.
Assuming a 28 percent affordability index, the results of the analysis show
that a median - priced home in 2011 is affordable to a household earning
between $20,499 and $21,150 (or from 67.6 to 69.7 percent of the AMI).
This assumes that the household can provide a down payment of 5 percent.
This analysis further examines the affordability of rental housing in the City
of Port Arthur in comparison to the cost of homeownership. A household
paying the 2011 fair market rent (FMR) for a 2- bedroom rental unit with no
funds available for a down payment can afford a home between 125 and 129
percent of the 2011 median home value in the City of Port Arthur; that is, a
home priced between $125,103 and $129,074. A household paying the 2011
fair market rent (FMR) for a 3- bedroom rental unit with no funds available
for a down payment can afford a home between 155 and 160 percent of the
2011 median home value in the City of Port Arthur, or one that is priced
between $155,077 and $160,000. A recent search of homes for sale
revealed the lowest priced home in the City of Port Arthur to be $9,900, with
123 homes priced below $99,900.'
7 Search conducted 5/12/11 at www.realtor.com.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -33
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Section II: DemographiclEconomic Overview
HOUSING PROBLEMS
By Department of Housing and Urban Development (HUD) standards, there
are three criteria by which a household is determined to have a housing
problem:
If a household pays more than 30 percent of its gross monthly income for
housing, it is considered cost burdened. HUD considers households that pay
more than 50 percent of their income on housing costs to be severely cost
burdened.
If a household occupies a unit that Tacks a complete kitchen or bathroom,
the unit has a physical defect.
If a household contains more members than the unit has rooms, the unit is
overcrowded.
Based on HUD's definition, 32.7 percent of the City of Port Arthur renters
(2,686) were cost - burdened in 2000, including 17.4 percent (1,429) who
were severely cost - burdened. A significantly smaller percent of homeowners
with a mortgage experience this housing problem: 16.8 percent were cost -
burdened (but representing nearly the same number of households: 2,270),
including 7.1 percent (959) who were severely cost burdened.
According to the 2000 Census, 243 households (1.1 percent) lacked
adequate plumbing facilities -108 owners (0.8 percent) and 135 renters (1.6
percent). At the same time, 197 households (0.9 percent) lacked complete
kitchen facilities -94 owners (0.7 percent) and 103 renters (1.2 percent).
Census 2010 data have not yet been released on these measures and
specific data on these conditions are not available in 2009 estimates.
In 2000, 2,134 (9.8 percent) of the City of Port Arthur households were
overcrowded. These were comprised of 1,091 owner - occupied households,
or 8.0 percent of all owner - occupied households. Slightly fewer tenant -
occupied households were overcrowded: 1,043, representing 12.6 percent of
all renters.
American Community Survey estimates reported marked improvement by
2009, indicating that overall, 5.2 percent of households were still
overcrowded (1,158). A significant shift took place in the composition of
overcrowded households, now comprised of 504 owners (3.7 percent) and
654 (7.4 percent) renters experiencing overcrowded conditions. However,
American Community Survey data are based on statistical calculations, and
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -35
Section II: DemographiclEconomic Overview
not actual counts. Census 2010 data should be monitored for a more
accurate assessment of this measure.
Recommendations
Increase housing options for households at the highest income levels to
relieve the competition for low- and median - priced homes.
Ascertain that low homeownership rates around the city are a reflection of a
geographic area's function (i.e., commercial areas) and not a reflection of
the race, ethnicity or income levels of its residents.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 2 -36
Section 1111: Fair Housing Status, 2011
SECTION III: Fair Housing Status, 2011
HUD Fair Housing Enforcement Activity
HUD often directly investigates complaints of housing discrimination based
on race, color, religion, national origin, sex, disability, or familial status. At
no cost, HUD will investigate the complaint and attempt to conciliate the
matter with both parties. If conciliation fails, HUD will determine whether
"reasonable cause" exists to believe that a discriminatory housing practice
has occurred. If HUD finds "no reasonable cause," the Department dismisses
the complaint. If HUD finds reasonable cause, the Department will issue a
charge of discrimination and schedule a hearing before a HUD administrative
law judge (AU). Either party may elect to proceed in federal court. In that
case, the Department of Justice will pursue the case on behalf of the
complainant. The decisions of the AU and the federal district court are
subject to review by the U.S. Court of Appeals. As of August, 2010 the
following cases are being investigated by HUD Headquarters:
TABLES 3 -14 AND B: CASES UNDER INVESTIGATION NATIONALLY
HUD Charges 2010
Basis of Discrimination
Case Number Date Charge Basis of Charge
Issued
05 -09- 0142 -8;
05 -09- 0143 -8 07 -26 -10 Disability
02 -09- 0997 -8 06 -17 -10 Disability
05 -09- 0210 -8 06 -07 -10 Disability
04 -08- 0484 -8 04 -07 -10 Disability
02 -09- 0904 -8 04 -07 -10 Disability
02 -09- 0753 -8 and 03/02/2010 Disability
02 -09- 0916 -8
02 -09- 0243 -8 02 -19 -10 Disability
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 3 -37
Section 1111: Fair Housing Status, 2011
06 -06- 1162 -8 10 -08 -09 Disability
05 -10- 0605 -8
05 -10- 0606 -8 09 -30 -10 Familial Status
04 -08- 0810 -8
04 -08- 0813 -8 10 -06 -10 Familial Status
04 -09- 0814 -8
03 -10- 0163 -8
03 -10- 2025 -8 08 -05 -10 Familial Status
03 -10- 0162 -8
01 -10- 0093 -8 01 -11 -2010 Familial Status
08 -07- 0229 -8 07 -09 -10 Familial Status
09 -08- 0480 -8 06 -10 -10 Familial Status
02 -09- 0659 -8; 02-
09- 0660 -8 05 -18 -10 Familial Status
03 -10- 0065 -8 04 -09 -10 Familial Status
03 -10- 0068 -8
09 -09- 0598 -8 12 -10 -09 Familial Status
01 -09- 0483 -8, 01-
09- 0480 -8, 01 -09- 12 -01 -09 Familial Status
0481 -8, and 01 -09-
0482-8
05 -09- 1428 -8 07 -09 -10 National Origin
01 -10- 0118 -8 06 -10 -10 National Origin
04 -08- 1144 -8 09 -30 -10 Race
04 -08- 1144 -8 09 -30 -10 Race
04 -08- 0238 -8/6 09 -30 -10 Race and Color
03 -09- 0035 -8 09 -08 -10 Race and Color
03 -08- 0318 -8 09 -08 -10 Race and Color
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 3 -38
Section 1111: Fair Housing Status, 2011
05-10- 0519 - 805 -10-
0520 - 805 -10 -0522- 08 -09 -10 Race
805 -10- 0523 -8
Race, national
10 -08- 0323 -8 04 -01 -10 origin, familial
status
05 -09- 0523 -8 05 -11 -10 Race
04 -09- 0800 -8
04 -09- 0801 -8 12 -17 -09 Race
07 -09- 0268 -8 and 09 -30 -10 Sex
07 -10- 0080 -8
HUD Charges 2010
Basis of Discrimination
Case Name Case Number Date Basis of Charge
Charge
Issued
Roberta Jean 09 -07- 1380 -8 05 -03 -11 Familial Status
Leong v. Castle
Management etal
Walker and 05 -10- 0470 -8 03 -22 -11 Race
Robinson v. McCoy 05 -10- 0469 -8
HUD v. Jacqueline 01 -10- 0167 -8 03 -08 -11 Familial Status,
Berlinger, Linda Race, National Origin
Thornberg & Diane
Hunsaker
HUD v. Warner 03 -10- 0201 -8 02 -18 -11 Sex, Familial Status,
Willis Color
HUD V. 02 -10- 0481 -8 02 -11 -11 Disability
Anchorage Lane
Owners, Inc. and
Total Community
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 3 -39
Section 1111: Fair Housing Status, 2011
Management
Corp.
HUD on behalf of 09 -09- 0082 -8 02 -25 -11 Familial Status
the National Fair
Housing Alliance
v. David Johnson
HUD v. James D. 04 -10- 0139 -8 12 -08 -10 Family Status
Pavolini and Olive
D. Pavolini
HUD v. Penny 04 -08- 0810 -8 10 -06 -10 Family Status
Pincher, Inc., and 04 -08- 0813 -8
Willie Kay Yates 04 -09- 0814 -8
PORT ARTHUR TITLE VIII COMPLAINTS
The following is an overview of the TWCCRD's complaints and
accomplishments during 2006 -2010.
There were only five complaints received in Port Arthur during the past five
years. Three were based on Race, one on Race and Disability, and one on
Sex and National Origin. Two complaints resulted in Successful Conciliations,
two resulted in No Cause determinations, and one complaint was withdrawn.
There were no cases filed based on color, religion, or family status.
Port Arthur Outcomes Number
1/1/2006- 12/31/2010
Cause Findings 2
No Cause Findings 2
Administrative and Other Closures 1
Pending (January 1, 2011) 0
Total 0
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 3 -40
Section 1111: Fair Housing Status, 2011
It can be extremely difficult to detect unlawful discrimination, as an
individual home - seeker, and the resolution of these complaints, following
investigation, is also important to consider. Note, the following definitions:
Administrative Closure Action taken as a result of a judicial proceeding,
lack of jurisdiction due to untimely filing, inability to identify a respondent or
locate a complainant, or if a complainant fails to cooperate.
Conciliation Parties meet to work out a resolution. Meeting is generally
initiated by the equivalent agency (NCHRC) or HUD.
Withdrawal /Relief Situation where the complainant wishes to withdraw
without relief or there is relief granted following a resolution between the
parties.
No Reasonable Cause — Although there may have been an action taken
that appears to be discriminatory under the Fair Housing Law, there is not
sufficient evidence uncovered as a result of investigation, to prove the action
was in fact discrimination, or in other words one of "Reasonable Cause" to
transfer to the U.S. DO], District Judge or the HUD Administrative Law Judge
for a judicial ruling.
Reasonable Cause — a result of investigation, that may also be
considered in a conciliation or other attempted resolution action; there is
sufficient evidence or "Reasonable Cause" to present the case to the (DOJ)
District Judge or the HUD (AU), for a judicial ruling.
FAIR HOUSING REGIONAL RESOURCES AVAILABLE TO PORT ARTHUR FOR DISASTER
COMMUNITY DEVELOPMENT
According to the State of Texas Phase 1 A.I. of 2011, the Golden Triangle is
represented by the Southeast Texas Regional Planning Commission
(SETRPC) located within TDHCA Region 5. The three counties are Jefferson,
Orange and Hardin and are considered to be an MSA. Port Arthur is located
in Jefferson County is the largest of three Counties with more than 242,000
persons.
The Golden Triangle is not expected, compared to other parts of Texas, eGoI de n a
9 p p p , to
experience significant growth between now and 2040 according to the state
demographers at the University of Texas at San Antonio. Under the Zero Net
Migration formula unlike other parts of Texas, the Hispanic population grows
only slightly and the racial make -up of the community remains roughly the
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 3 -41
i
Section 1111: Fair Housing Status, 2011
same as it is currently with a slight movement toward a larger minority
population by 2040.
Age by Age Group and Race /Ethnicity -2000
Age by
Age Group Non
and Hispanic Black Hispanic Other Total
Race /Eth White
Age Group
<18 23.3 31.8 33.5 32.0 26.5
18 -24 8.5 11.0 13.2 10.4 9.5
25 -44 27.9 28.9 35.1 34.7 28.9
45 -64 24.2 18.9 13.5 17.9 21.9
65+ 16.2 9.4 4.7 5.0 7.9
Median 39.1 30.3 26.7 29.7 35.6
Age by Age Group and Race /Ethnicity -2040
Age by
Age Group Non
and Hispanic Black Hisp Other Total
Race /Eth White
Age Group
<18 17.2 19.9 25.7 19.2 19.0
18 -24 6.8 8.9 10.5 7.0 7.8
25 -44 24.7 28.8 28.4 23.2 26.2
45 -64 27.1 27.7 21,2 25.0 26.5
65+ 24.2 14.7 14,2 25.6 20.5
Median 46.1 39.8 34.6 45.5 42.7
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 3.42
Section 1111: Fair Housing Status, 2011
SETRPC Poverty Figures, 2010
Families At or Above Families Below Pov-
County Poverty erty
Number Percent Number Percent
Hardin 13,601 88.5% 1,774 11.5%
Jefferson 52,967 85.8% 8,802 14.2%
Orange 21,425 88.4% 2,819 11.6
OTHER FAIR HOUSING RESOURCES AVAILABLE TO TEXAS
National Community Reinvestment Coalition (NCRC)
Through workshops, conferences, investigation of civil rights complaints,
systemic "testing," education and outreach, fair housing planning and "best
practice" compliance initiatives, NCRC Fair Housing provides technical
assistance to our members in rural, suburban and urban communities to
promote economic justice and equal housing opportunity in our nation.
NCRC Fair Housing is currently focusing on increasing our members' capacity
to challenge discrimination, creating a anti - predatory lending member
network to challenge discriminatory lending, and to build community lender
partnerships that celebrate good business and access to credit.
The mission of the NCRC is to increase fair and equal access to credit,
capital, and banking services and products because discrimination is illegal,
unjust, and detrimental to the economic growth and well being of our
society. NCRC is a HUD Qualified Fair Housing Organization. Seeking to
support long -term solutions, NCRC provides resources, knowledge and skills
to build community and individual net wealth.
NCRC is at the vanguard of a growing movement in which community
leaders in rural and urban areas across the nation are becoming educated
about, and active in, efforts to affect the flow of capital and the provision of
fair housing and fair lending services in their neighborhoods.
NCRC has worked to make fair housing prevalent in all communities, to
increase the capacity of neighborhood -based organizations, and to promote
community- lender partnerships. These goals have been accomplished
through fair lending testing, research, client counseling, investigating
predatory lending practices, pro- integration activities, education and
outreach programs, and private enforcement. NCRC Fair Lending
professional staff testified on Capitol Hill, served as a resource to both the
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 3 -43
Section 1111: Fair Housing Status, 2011
private and public sector, and are invited as "experts" to speak at
conferences throughout the nation.
For more Information regarding NCRC's investigations of civil rights
complaints, systemic "testing," education and outreach, fair housing
planning and "best practice" compliance initiatives see NCR Web site —
www.ncrc.orq 8
8 National Community Reinvestment Coalition (www.ncrc.org).
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 3 -44
Section IV: Public Sector Analysis
SECTION IV: Public Sector Analysis
Overview
The Fair Housing Act generally prohibits the application of special
requirements through land -use regulations, restrictive covenants, and
conditional or special use permits that, in effect, limit the ability of minorities
or the disabled to live in the residence of their choice in the community. If
large -lot minimums are prescribed, if a house must contain a certain
minimum amount of square feet, or if no multi - family housing or
manufactured homes are permitted in an area, the results can exclude
persons protected by the Act. If local mandates make it unfeasible to build
affordable housing or impose significant obstacles, then a community must
affirmatively work toward eliminating this type of impediment to fair housing
choice.
The Fair Housing Acts of 1968 and 1988, as amended, also make it unlawful
for municipalities to utilize their governmental authority, including zoning
and land use authority, to discriminate against racial minorities or persons
with disabilities. Zoning ordinances segregate uses and make differentiations
within each use classifications. While many zoning advocates assert that the
primary purpose of zoning and land use regulation is to promote and
preserve the character of communities, inclusionary zoning can also promote
equality and diversity of living patterns. Unfortunately, zoning and land -use
planning measures may also have the effect of excluding lower- income and
racial groups.
Zoning ordinances aimed at controlling the placement of group homes is one
of the most litigated areas of fair housing regulations. Nationally, advocates
for the disabled, homeless and special needs groups have filed complaints
against restrictive zoning codes that narrowly define "family" for the purpose
of limiting the number of non - related individuals occupying a single - family
dwelling unit. The 'group home' arrangement /environment affords many
persons who are disabled the only affordable housing option for residential
stability and more independent living. By limiting the definition of "family"
and creating burdensome occupancy standards, disabled persons may suffer
discriminatory exclusion from prime residential neighborhoods.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-45
Section IV: Public Sector Analysis
The current Port Arthur Zoning Ordinance, Building Codes and other
requirements appear to be in conformance with professionally accepted
practices and not discriminatory.
PORT ARTHUR PLANNING, ZONING, AND TRANSIT
What is City Planning? City Planning is the coordinating of developing land
for commercial, residential, institutional and recreational uses, based on the
zoning maps.
Protect and defend the rights of our customers —such that customer service
is effective and efficient, yielding satisfaction to (internal and external
customer).
Promote a prosperous and sound economic development decisions, with our
contractors, builders and partners (internal and external).
Preserve the City's environment, historic legacy, diverse heritage and
neighborhood integrity such that records will show evidence of our progress
over the centuries.
Port Arthur's Planning Department is more than forty years old. Its primary
function is to monitor land use and observe how land is subdivided, in
regards to the use (zoning). These uses are classified as zoning districts.
Many persons are familiar with — "SF" for (single - family). There is "R"
(retail), "C" for (commercial) and "I" for industrial. Industrial use areas are
comprised of cumulative zoning that should take all uses except housing.
Single- family housing, unlike in the days of old is not readily permitted in an
industrial area due to the activities that are in progress and typically have
emissions, noise or odor with the production of goods. This is why planning
was promoted in cities because of the industrial era with a theme to promote
health and safety. As communities grew since World War II, other
departments were associated with planning. Departments such as Public
Works (more so streets and other infrastructure projects- water /waste-
water), Engineering (design of structures and soil compaction), Building
Inspections, Fire and Police all synchronize with the Planning Department to
utilize the Comprehensive Plan.
The Comprehensive Plan is a guide that dictates future uses in contrast to
existing uses based on population, socio- economic changes, cultural
9 Port Arthur Planning and Zoning Web Site
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-46
Section IV: Public Sector Analysis
diversity, hence — transportation and employment needs shall be appeased in
line with the demand for housing and retail structures. It's stated that
single - family houses are not allowed in "I" zoning districts as it is not part of
Port Arthur's present Zoning Ordinance. However, in some sections of the
country where land is expensive or scarce, in accordance with their
Consolidated Plan (for affordable housing) these "I" areas are developed.
Also since this was done in the past, where health, safety and environmental
concerns are minimal —we also are rebuilding destroyed houses only. Some
residents have chosen to relocate in other areas of the City. The Planning
Department has four divisions:
PAT —Port Arthur Transit that some residents may be familiar with due to its
transporting of commuters to various sectors across Port Arthur; many
residents do not realize we are one of the few small cities (under 100,000
persons) that have a transit system.
Secondly is the Housing and Grants Managements Division, that is doing
much of the rehabilitation and reconstruction of houses downtown, and in
nearby areas on the east and west sides of Houston Road; this division is
working with many low- income persons to get housing down - payment, RITA
RECOVERY funds and roof repairs underway.
The Mayor implemented the One Block at a Time program in 2010, after
noting more than the usual Code violations and unkempt properties
throughout the City. In order to spur pride and champion a mode of
"revitalization and restoration" residents and businesses were implored to
"buy in" and give sweat equity or other resources so neighborhoods may
yield the perception of safety, stability and sustainability rather than the
acuity of decline. The Mayor's Office number or the Housing Department
may be contacted by e -mail.
Then there is the Planning Division this department determines where
certain developments will occur, and with other departments, state how the
improvements desired to the land will create — subdivisions, private homes,
malls, parks or recreation facilities.
The use of the land (size, setbacks, bulk of the building and height of the
structure) all entails zoning. Subdividing the land is platting it to note the
width and depth of the land and how it is described by the Appraisal
(Abstract) District. Hence this is where you come to ensure the boundaries
of your land as you survey and before you build /place any structure on it.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-47
Section IV: Public Sector Analysis
These decisions (zoning /platting) are made by two Boards —the Planning
Commission and the Zoning Board of Adjustments. Selected members are
placed on an agenda by the Mayor, for the Council's consideration and
possible appointment. This process is in line with the City's Charter; however
the Board's function is in accordance with the Charter and State Laws that
govern zoning and plat approval.
Planning is presently updating its maps for accuracy as well as easy
distribution. In the mean time, thanks to online mapping technology —such
as Goggle provides, one is allowed to view one's lot or neighborhood at any
time of day. A website is being worked on so applications along with plat and
zoning procedures may also be easily obtained without an office visit. The
former Director of over fifteen years is leaving this month. Although a new
Planning Director is in place, it will be another month before most of the
community meets her due to present obligations and her becoming
accustom to the transitional affairs of the City. Also within a month a new
Assistant Director will be on board to help guide and direct a staff of over
forty persons. The Director requests that residents to be patient with us as
these changes take effect to yield increased technology and communication.
Port Arthur Planning Department looks forward to more outreach with the
citizens —as the twenty -year Comprehensive Plan is rewritten for the 21st
Century and residents chart a new course for Port Arthur's continued
prosperity.
CONSOLIDATED PLAN
The City of Port Arthur carries out Federal programs administered by the
U.S. Department of Housing and Urban Development. In FY 2010, the City
published its Consolidated Five Year Strategic Plan, which addresses housing
and community development needs during the period of FY 2010 to 2014.
The one -year Action Plan describes the activities to be undertaken during the
fiscal year and how the City will use Federal and local resources to
accomplish the stated objectives. The annual plan also describes how other
community resources will be utilized to address the needs of the homeless,
low to moderate income individuals and families, and other targeted
populations. The 2010 -2014 Consolidated Plan, that features extensive
program targeting in the homeowner rehabilitation, homeownership,
infrastructure, and public service areas, submitted to HUD for the program
year beginning July 1st.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-48
Section IV: Public Sector Analysis
In effect, the Consolidated Plan serves as the City of Port Arthur's application
for CDBG funds supported by the other three federal HUD programs through
the Port Arthur HOME Program, Port Arthur and Golden Triangle Area
Consortium for the Homeless (MACH), (ESG /Supportive Housing SETCH—
South East Texas Coalition for the Homeless), and (HOPWA) Housing
Opportunities for Persons with AIDS.
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)
Grants awarded to urban communities on a formula basis to support
affordable housing and community development activities. The Community
Development Block Grant (CDBG) program is used to plan and implement
projects that foster revitalization of eligible communities. The primary goal
of the program is the development of viable urban communities. Program
objectives include the provision of decent housing, a suitable living
environment and expanded opportunities principally for low- to moderate -
income individuals and families. Port Arthur has been an entitlement
community for over 37 years and receives its CDBG allocation directly from
HUD.
• Acquisition /Rehabilitation
• Homebuyer Assistance
• Homeless Assistance
• Economic Development
• Public Improvements
• Public Services
HOME INVESTMENT PARTNERSHIP PROGRAM (HOME)
Grants awarded for the development and rehabilitation of affordable rental
and ownership housing for low income households. The HOME Investment
Partnership (HOME) program is used to assist in developing affordable
housing strategies that address local housing needs. HOME strives to meet
both the short -term goal of increasing the supply and availability of
affordable housing and the long -term goal of building partnerships between
state and local governments and nonprofit housing providers. Port Arthur
receives its HOME funding directly from HUD.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-49
Section IV: Public Sector Analysis
HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS (HOPWA)
Grants awarded to design long -term comprehensive strategies for meeting
the housing needs of low income people living with HIV /AIDS.
EMERGENCY SHELTER GRANT PROGRAM (ESG)
Grants awarded to implement basic shelter activities that benefit individuals
and families who are homeless.
AFFORDABLE HOUSING NEEDS AND ACTIVITIES
The Port Arthur Housing Programs are designed to implement various
housing assistance strategies that include rehabilitation and down payment
assistance. The City's community and neighborhood development activities
are designed to:
• Assist with neighborhood improvement projects
• Assist homeowners, including elderly and disabled
• Provide housing rehabilitation
• Help low to moderate - income residents acquire needed information,
knowledge and skills
PROVISION OF PUBLIC SERVICES
The City's community and neighborhood development activities are designed
to assist with neighborhood improvement projects, provide public services,
help low- to moderate - income residents acquire needed information,
knowledge and skills to build their capacity, and enhance the provision of
public services.
Housing and neighborhood improvement needs and activities are described
2010 -14 Consolidated Plan Strategic plan.
Provide HOME and CHDO funding to a non - profit organization designated as
a Community Housing Development Organization (CHDO) to undertake an
eligible HOME activity.
Housing assistance for AIDS victims in support of the HOPWA Program.
Assistance to the homeless is provided through the ESG Program and
various federally- funded SHP Programs through the Continuum of Care.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-50
Section IV: Public Sector Analysis
AFFORDABLE HOUSING PRIORITIES
Faced with the reality of limited Federal and local government resources for
housing, Port Arthur has been challenged to create comprehensive,
affordable housing programs to meet the demands of priority needs
households along the entire housing continuum — rental, ownership, special
needs, supportive housing, etc. While the unmet need for rental housing for
extremely low income households might suggest that all resources should be
devoted to addressing this gap, resources must also be devoted to
addressing the housing needs of low and moderate income households that
have cost burdens and other housing problems to ensure the housing
continuum is intact and flowing. This includes enabling more homeownership
among these income groups, which the City has determined is important for
stabilizing families and neighborhoods. It also includes preserving the
existing affordable housing stock, also key for neighborhood revitalization
particularly in the inner city and central city neighborhoods.
According to the 2010 Consolidated Plan, the City has also proposed for the
term of this Consolidated Plan to ensure continued revitalization and
community development efforts.
INSTITUTIONAL STRUCTURE
The Housing Department coordinating with the Economic Development
Department have designed and implemented various housing assistance
strategies that include rehabilitation, down payment assistance for first -time
homebuyers and affordable housing new construction. The City's community
and neighborhood development activities are designed to assist with
disaster, as well as, neighborhood improvement projects, provide public
services, help low- to moderate - income residents acquire needed
information, knowledge and skills to build their capacity and enhance the
provision of public services. Community Housing Development Organization
(CHDO) activities provides funding for the new construction of affordable
houses, rehabilitation, and down - payment assistance for low- income
families. housing and neighborhood improvement needs and activities are
described in the 2010 -14 Consolidated Plan.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-51
1
Section IV: Public Sector Analysis
INTERGOVERNMENTAL COOPERATION-- SETRPC'
The South East Texas Regional Planning Commission (SETRPC) is a
voluntary association of local governments that serves an area composed of
Hardin, Jefferson and Orange Counties.
The Planning Commission was established in June, 1970 under authority
provided by the Texas Legislature in 1965. SETRPC is one of 24 Regional
Planning Councils that serve all of Texas. Regional Council boundaries
conform to the State Planning Region System whereby 24 areas or regions
are delineated according to socio- economic and physical characteristics that
set one area apart from another.
SETREP will be coordinating the City's FHAST responses to the State A.I.
Phase 1.
LEAD —BASED PAINT HAZARD REDUCTION
Lead poisoning is one of the worst environmental threats to children in the
United States. While anyone exposed to high concentrations of lead can
become poisoned, the effects are most pronounced among young children.
All children are at higher risk to suffer lead poisoning than adults; but
children under age six are even more vulnerable because their nervous
systems are still developing. At high levels, lead poisoning can cause
convulsions, coma, and even death. Such severe cases of lead poisoning are
now extremely rare, but do still occur. At lower levels, observed adverse
health effects from lead poisoning in young children include reduced
intelligence, reading and learning disabilities, impaired hearing, and slowed
growth.
Since the 1970s, restrictions on the use of lead have limited the amount of
lead being released into the environment. As a result, national blood lead
levels for children under the age of six declined by 75 percent over the
1980s and dropped another 29 percent through the early 1990s. Despite the
decline in blood -lead levels over the past decade, recent data show that
900,000 children in the United States still have blood lead levels above
10pg /dL (micrograms of lead per deciliter of whole blood). These levels are
unacceptable according to the Centers for Disease Control and Prevention
(CDC) which lowered blood lead intervention levels for young children from
25pg /dL to 10pg /dL in 1991. Many of these lead- poisoned children live in
10 SETRPC Web Page
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-52
Section IV: Public Sector Analysis
low- income families and in old homes with heavy concentrations of lead -
based paint. The CDC identified the two most important remaining sources
of lead hazards to be deteriorated lead -based paint in housing built before
1978 and urban soil and dust contaminated by past emissions of leaded
gasoline.
The national goal for blood lead levels among children ages six months to
five years is to limit elevations above 15pg /dL to no more than 300,000 per
year and to entirely eliminate elevations above 25pg /dL.
About half of the housing units in the City may have lead -based paint. Since
the City undertakes the rehabilitation of limited to comprehensive
rehabilitation of housing units (many of which were constructed prior to
1978), painted surfaces will be disturbed as part of this process. As such,
the City is required to incorporate lead -based paint hazard evaluation,
approved remediation /reduction strategies and clearance requirements for
all housing structures built before 1978.
To reduce the potential for adverse health effects attributable to the
rehabilitation of deteriorated lead -based paint surfaces, the City provides
educational material. All customers receiving housing rehabilitation
assistance from the City are informed about the potential health hazards
posed by the presence of deteriorated lead -based paint, which includes
information about protecting their families from this hazardous substance.
PROPERTY TAX POLICIES
Across the Country, older communities —with the support of the Federal
government —have begun to invest in economic and community
development programs designed to revitalize their urban cores. Burlington is
no exception. The foundation upon which this kind of development is built is
the ability to achieve fairness in the appraisal process within these
neighborhoods. Since the starting point for most bank appraisals is the tax
department, discriminatory assessment practices can undermine a
homebuyer's ability to secure mortgage financing in an amount
commensurate with the property's true market value.
Although the Fair Housing Act specifically prohibits the consideration of the
racial or ethnic composition of the surrounding neighborhood in arriving at
appraised values of homes, no practical means exist to investigate violations
of this kind. One reliable approach, however, is to review, periodically, the
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-53
Section IV: Public Sector Analysis
assessment policies and practices of the taxing jurisdiction since their
valuations generally comprise the bases for private appraisals.
Property tax assessment discrimination against low- income groups occurs
when lower value properties and /or properties in poorer neighborhoods are
assessed for property tax purposes at a higher percentage of market value,
on average, than other properties in a jurisdiction. Regressive assessments
(the tendency to assess lower value properties at a higher percentage of
market value than higher value properties) are not uncommon in this
Country. They result from political pressures, practical problems in
assessment administration and the use of certain inappropriate appraisal
techniques. Assessments tend to remain relatively rigid at a time when
property values are rising in middle income neighborhoods and are declining
or remaining at the same level in low- income neighborhoods.
Inequities in property tax assessments are a problem for both lower- income
homeowners and low- income tenants. Millions of low- income families own
homes. Variations in assessment -to- market value ratios between
neighborhoods or between higher and lower value properties can make a
difference of several hundred dollars or more each year in an individual
homeowner's property tax bill. In addition to causing higher property tax
bills, discriminatorily high assessment levels can also have an adverse
impact upon property values. Buyers are less likely to purchase a property if
the property taxes are perceived as too high thereby making the property
less attractive and reducing its market value.
Another common inequity is the assessment of multifamily dwellings at a
higher ratio to market value than single family dwellings. This type of
inequity may be considered a form of discrimination against low- income
groups because a higher percentage of low- income than middle- income
persons live in multifamily rental dwellings. The requirement to pay a higher
assessment is passed on to the tenant in the form of higher rent. Quite
often, higher assessments also make it difficult for landlords to maintain
property within the limits of the property's rent structure leading to
substandard housing conditions.
Most jurisdictions rely heavily on a market value approach to determining
r
value when conducting their property assessment appraisals. Under this
approach, an appraiser compares recent sale prices of comparable properties
within the area —in addition to site visits and a good deal of expert
speculation —in arriving at an appraised value. The limitations inherent in
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-54
Section IV: Public Sector Analysis
market value approaches are many. Most prominent among them are the
cumulative result of decades of discriminatory valuations, especially where
the neighborhood is a minority one. Unless some radical re- appraisal process
has been conducted within the preceding 10 -year period, the present market
value approach merely compounds past discrimination.
While the market value approach may operate successfully in some
jurisdictions, a substantial percentage of jurisdictions rely primarily on a
replacement cost approach in valuing properties. Making determinations of
value based on comparable sales is a complex task, which requires
considerable exercise of judgment. Assessor's departments, which must
appraise every property within a jurisdiction, often do not find it feasible to
make the detailed individual analysis required to apply the market value
approach.
ZONING AND SITE SELECTION
Zoning may have a positive impact and can help to control the character of
the communities that make up a City. In zoning a careful balance must be
achieved to avoid promoting barriers to equal housing.
Professor Richard T. Lal, Arizona State University surveying the view of
representative studies concerning the nature of zoning discrimination states:
"If land -use zoning for the purpose of promoting reason, order and beauty in
urban growth management is one side of the coin, so can it be said that
exclusion of housing affordable to low and moderate income groups is the
other...as practiced, zoning and other land -use regulations can diminish the
general availability of good quality, low -cost dwellings...."
In considering how zoning might create barriers to fair housing, four key
areas were reviewed; these included the following which were selected
because of the possible adverse effects they could have on families and
persons with disabilities.
• Definitions used for "families" and "group homes"
• Regulations (if any) regarding group homes
• Ability for group homes or other similar type housing to be developed
• Unreasonable restrictions on developing multifamily units, such as lot
size requirements.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-55
Section IV: Public Sector Analysis
While the definition of group care facility is broader in terms of the number
of people that can be served and no limited related to temporary disability,
group housing is much more restricted in where it is permitted under current
zoning designations. Family care homes are permitted under all single - family
zoning districts as well as all multifamily and office use districts,
neighborhood business districts (light commercial), agriculture districts and
mixed use districts (traditional neighborhoods). Group homes, on the other
hand, are not permitted in any single - family zoning districts and are only
permitted in the highest density multifamily residential districts and
commercial, office and public and institutional districts. This serves to limit
group homes located in single - family and low density multifamily districts to
only small -scale homes (six persons or Tess) that serve those with temporary
disabilities. Generally, the concept of group homes is to integrate them into
neighborhoods, providing the maximum amount of independent living in a
community -based environment. For example, those group homes that serve
persons with permanent disabilities and /or more than six occupants, this
neighborhood integration may be unattainable in some communities based
on zoning restrictions.
Port Arthur's land use plan requires that adequate public facilities be
available for any development activities. In this context, "adequate public
facilities generally refers to governmental strategies for assuring that all
infrastructure required to meet the service demands of a particular
development is available as development occurs. Such strategies can, where
permitted by statute, require that the costs for all or a portion of such
infrastructure be borne by the developer (ultimately the consumer), and not
the general public. Currently, the City's policy is that all streets, water,
sewer and storm drainage facilities within a subdivision, including any
required water quality retention ponds, are paid for by the developer."
The ability to provide affordable housing to low- income persons is often
enhanced by an entitlement grantee's willingness to assist in defraying the
costs of development. Effective approaches include contributing water,
sewer or other infrastructure improvements to projects as development
subsidies or waiving impact and other fees. These types of approaches help
to reduce development costs and increase affordability allowing developers
to serve Tower- income households. Port Arthur has historically sought to
defray development costs by utilizing CDBG for targeted infrastructure and
HOME funds to encourage affordable housing.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-56
Section IV: Public Sector Analysis
v.
STRATEGIES TO MEET UNDERSERVED NEEDS AND BARRIERS TO AFFORDABLE
HOUSING
Port Arthur's Consolidated Plan major goal is to provide opportunities for
standard, affordable housing for low and moderate -low families and for
supportive housing for the homeless and others with special needs within the
City.
Another basic goal is to improve the living environment of low- moderate-
income persons in its jurisdiction. Therefore, in determining the allocation of
limited public resources among the identified housing and community
development needs, the City analyzed the probable impact of a specific
need, availability of resources (public and private), time and costs. This
analysis served as a basis for identifying any obstacles to meeting
underserved needs and designing programs /activities.
General priorities of the City of Port Arthur focus on meeting the housing and
community development needs of low- income households and
neighborhoods throughout the City. The City provides federal funding,
program income and any leveraged public /private resources for diverse
activities including housing rehabilitation and neighborhood revitalization.
The City does not intend to target a specific portion of its activities into a
specific geographic area. Instead, the City will provide assistance on a City-
wide basis.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 4-57
Section V: Private Sector Analysis
Section V: Fair Housing and the City of Port Arthur's
Private Sector
Homeownership rates are important to a community's financial well- being.
Prospective homebuyers expect to have access to mortgage credit;., and
home ownership programs must be available without regard to
discrimination, income, or profession. To truly live up to fair housing laws, all
persons must have the ability to live where they want and can afford.
Access to mortgage credit enables residents to own their homes, and access
to home improvement loans allows them to keep older houses in good
condition. Access to refinancing loans allows homeowners to make use of the
equity in their home for other expenses. Mortgage credit, home
improvement loans, and refinancing loans together keep neighborhoods
attractive and keep residents vested in their communities."
Lenders in the City of Port Arthur
Poor lending performance results in various long -term and far ranging
community problems. Of these, disinvestment is probably the most
troubling. Disinvestment in the City of Port Arthur by its lenders would
reduce housing finance options for borrowers and weaken competition in the
mortgage market for low- moderate income neighborhoods. High mortgage
costs, less favorable mortgage loan terms, deteriorating neighborhoods,
reduced opportunities for home ownership, reduced opportunities for home
improvement and the lack of affordable housing are only a few of the
consequences of inadequate lending performance. Financial decay in the
business sector as well as in the private sector is also a result of
disinvestment in the form of business relocation, closure, and bankruptcy.
Full service local lenders that have traditionally served residents and
businesses are one of the main elements that keep neighborhoods stable.
Significant changes are occurring in the lending market not only in the City
of Port Arthur but throughout the United States. The number and type of
lenders have changed over the last ten years, and many local lenders have
been bought by national lenders. These national lending institutions are
11 Profile of Lima, Ohio, Federal Reserve Bank of Cleveland, Fall 2000.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -58
Section V: Private Sector Analysis
becoming increasingly more active locally, as their market share continues
to grow, and recent government bail -outs to prevent lender failures have
impacted conventional lending prospects for the future.
The substantial growth of the sub -prime market and the impact these
lenders have on communities and neighborhoods continues. More and more
we see local commercial banks lose market share to lenders outside the city.
In part, this is attributable to the advent of on -line loan services (such as
Lending Tree, a -loan Ditech, and others) who submit applications on the
borrower's behalf to several lenders. More favorable terms can often be
available from remote lenders than can be found locally. HMDA data also
reflect other impacts of the popularity of on -line loans. First, since several
prospective lenders may report the same borrower's application, this results
in an increase in the number of loan applications,
often by three or four times the actual number of Number of Lenders
loans sought. Secondly, since each borrower Percent Change
2004 to 2008
ultimately chooses just one loan, the number of 2004 to 2005 -2.7%
applications approved but subsequently declined also 2005 to 2006 -1.1%
increases. These effects are evident in the data. 2006 to 2007 -12.4%
There were 82 financial institutions with a home or 2007 to 2008 -47.1%
branch office in the City of Port Arthur, and whose data make up the 2009
aggregate report for the city. The number of all mortgage lenders in the City
of Port Arthur has declined in recent years, dropping by an overall average
of -15.8 percent each year since 2005. In 2009, there were 55.4 percent
fewer lenders serving the area than in 2005.
Fig. 1. Number of Lenders
200 -
180 184
179 177
160
155
140
4
d 120 — —
D
J 100
a 80
82
Z
40
20 -
0 - -.
2005 2006 2007 2008 2009
Source: HMDA, 2005 -2009
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -59
Section V: Private Sector Analysis
The physical presence of financial institutions in communities facilitates
relationships with banks, and the location of these institutions is a primary
concern for a community. Areas left without branches or with access to only
ATM machines must find alternative sources for services (such as check
cashing businesses or finance companies), which can be more expensive
than traditional financial institutions or credit unions. The pattern of lender
activity depicted above closely mirrors a similar pattern nationwide that
reflects the recent instability of the lending industry.
Table 1 shows the local lenders in the City of Port Arthur and their 2009
market share for mortgage applications (all types and purposes). As lenders,
these institutions wrote 26.9 percent of the residential lending business in
the City of Port Arthur in 2009. There were no other lenders with locations in
the city; therefore, local lenders realized a total of 26.9 percent of the city's
residential mortgage business in 2008. The remaining 73.1 percent went to
lenders who do not have offices or branches in the City of Port Arthur. This
means that the residential real estate lending marketplace in the City of Port
Arthur is primarily served by remote lenders, as has been the national trend
in recent years.
Table I. Largest Lending Institutions
Branches) % Market
Institution Offices Share 2008
WELLS FARGO FUNDING 2 25.45%
CAPITAL ONE HOME LOANS 2 1.41%
TOTAL 4 26.9%
Source: HMDA, 2009
The map on the following page illustrates the locations of the local lenders in
the City of Port Arthur. While there are very few, they are represented
throughout the city, where they are accessible by households of all incomes.
Ready accessibility is of particular importance to novice homebuyers, who
are more likely to be found at lower income levels. These lenders' presence
in lower- income areas is definitely an asset.
While the higher- income areas north and south of the city appear to have
limited access to lenders, these prospective borrowers have access to other
sources of funds, such as might be found through on -line brokers, who
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -60
Section V: Private Sector Analysis
accommodate their needs remotely without the need for face -to -face
interaction.
Map 1: Lenders in Neighborhoods
Orange County
*
A
Jefferson County
* local Lenders
Income as Pet of Median
IIIII11 Less man 30%
30.1 % - 50%
50.1 % -80%
80.1% - 120%
— 120.1 % - 250%
According to HUD's Subprime Lender criteria, 6.1 percent of the lenders
active in 2009 lending in the City of Port Arthur were subprime lenders.
Generally located outside the state, their services are most often sought
electronically through on -line brokers. These lenders are easy to access
nationwide, making it convenient to shop for loans, and the local absence of
top -tier accessibility can make the subprime market generally more
attractive for local borrowers.
LENDING ACTIVITY IN THE CITY OF PORT ARTHUR, 2004 -2008
The statistical databases used for this analysis were 2000 decennial census
data, the 2007 -2009 American Community Survey 3 -year Estimates and the
Home Mortgage Disclosure Act (HMDA) data for the years 2005 to 2009,
inclusive. HMDA data on loan activity are reported to document home
purchase, refinancing, and home improvement loans. The broadest measure
of lending activity is total market activity, which covers all three categories
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5-61
I
Section V: Private Sector Analysis
of home loans (purchase, refinance, and home improvement). In this report,
if the loan purpose is not specified in the text or figures, the reference is to
total market activity.
Loan Applications During the strong economic trends prior to 2005,
Percent Change there was a boost in income and employment, which
2005 to 2009 generated a higher demand for homeownership and
2005 to 2006 -3.5% other mortgage related activities. Mortgage interest
2006to2007 - 13.5% rates were quite low and there was a rush to
2007to2008 -26.9% refinance homes and to do home - improvement
2008 to 2009 -9.2%
projects. Not surprisingly, mortgage loan activity in
the City of Port Arthur showed strength over this same time period and the
total number of applications submitted to lenders in the City of Port Arthur
was quite high. In 2006, however, data indicate a steadily decrease in loan
application activity since that time —the timeframe that roughly corresponds
with United States military involvement in Iraq. The uncertainty of its
outcome may have resulted in residents viewing commitment to a new
mortgage a low priority. The striking 26.9 percent decline in 2008 illustrates
the effect of the end of favorable interest rates and the threat of an
uncertain economy.
The applications represented here are for all loans: conventional,
government- backed, refinance, home improvement for owner - occupied,
single - family dwellings.
Fig. 2. Home Mortgage Applications, All Types
12000 -
11,029
10,000 10,645
9,212
8,000
0
6,000 6,737
a ■' ■ ■' ■ 6,119
E 4,000
Z ■ ■ ■ ■
2,000
0
2005 2006 2007 2008 2009
Source: HMDA, 2005 -1009
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -62
Section V: Private Sector Analysis
Approval rates have been rising gradually since 2005 (Figure 3), as have
denial rates until 2009, likely in response to general economic conditions
nationwide. In 2005, 12.9 percent of all loans were originated, while 5.1
percent of loans approved were declined by the applicants (not shown
separately). Origination rose to 15.1 percent by 2007, and rose again to
16.3 percent by 2009. At the same time, applicant refusal of approved loans
remained near 5.0 percent until 2009, when this rate fell to below 4 percent.
The rate of denials has been steadily declining, from 33.1 percent in 2005 to
23.5 percent in 2009. Withdrawals were at their highest point in 2005, and
fell to 9.2 percent at 2008, while incomplete applications (interpreted as a
sign of borrowers' reluctance to commit finances) dropped from nearly 6
percent in 2005 to a recent low of 2.7 percent in 2008.
Fig. 3. Actions Taken on Applications
All Applications, All Loan Categories
35% -
30%
25%
M
c
$ 20%
15% —
`o
• 4
10%
0%
2005 2006 2007 2006 2009
I DApprooed ■Denied DWthdrawn 0 Incomplete l
Source: HMDA, 2005 -2009
Figure 4 shows the relationship among percent of applications, originations,
and denials for the five -year period in the City of Port Arthur. Despite the
declining number of applications since 2005 (also see Figure 2, above), rates
of originations rose, as did denials until 2009, when denials declined to their
lowest point in the study period. While applications were at their peak in
2005, the rate of originations rose to 21.0 percent in 2008. At the same
time, denials dropped from 33.1 percent in 2005 to 23.5 percent in 2009. In
this context, Originations are those loans that culminated in a closing. Loans
that were approved but subsequently declined by the borrower have been
subtracted from the total number approved (shown above). As anticipated,
12 Approved loans are those that originated (culminated in a closing) as well as those approved by the lender but subsequently
declined by the borrower.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -63
Section V: Private Sector Analysis
the number of loans declined by the borrower rose from 5.1 percent in 2006
to 5.6 percent in 2007, then dropped off to 3.6 percent in 2009 (not shown
separately).
Fig. 4. Change in Applications Submitted, Originations and Denials
12,000 — — 35%
10.000 — — 30%
25%
8,000
w
° 20%
° 6000 _ o
—
a a
15% C
n 4000 - m
10% a
2,000 —
5%
0 1 t i 1 0%
2005 2006 2007 2008 2009
�Total -Loan Originated — r'Denied
Source: HMDA, 2005 -2009
One factor that might contribute to a change in the rate of loan originations
is the difference in the types of loans applicants seek. A review of
applications by type (Figure 5) reveals that while refinancing was the most
sought -after loan type throughout much of the five -year period, it was
loans (for new home purchase) in 2006 and
superseded by conventional ( p )
2007. Refinancing is a common way for homeowners to access cash. The
sudden decline in conventional applications for purchase in 2008 to just over
700 applications (a drop of nearly 50 percent from the preceding year) as
compared to a much smaller decline in applications for refinances (about 25
percent decline) reiterates efforts of borrowers seeking to take advantage of
low interest rates to extract equity from their existing homes rather than
committing to a new purchase. The increase in the use of on -line lending
brokers helped fuel the ease of seeking out loans until cautions about an
unstable economy stopped the flow. In general, home improvement loan
applications are the least sought -after product. In the City of Port Arthur,
however, these outpaced government loans in all years except 2009.
Government loans represented about 6 percent of all loans from 2005 to
2007, then leapt to 15.5 percent in 2008 (the same year that applications
for conventional loans dropped off) and 20.4 percent in 2009. While it is
tempting to surmise that otherwise conventional homebuyers sought
government assistance in 2008, the overall number of conventional loan-
seekers dropped by more than 600 from the previous year. At the same
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -64
Section V: Private Sector Analysis
time, government loan- seekers increased by fewer than 200. Although this
may capture some of the difference, many potential homebuyers appear to
have opted out in 2008.
Fig. 5. Applications by Type
2000 -
1800
1,600
1,400
1200 — - -_...
1.000 —
800 —
000 — —
— 1B – f – 1
IV
o
Conventional Government Refinance Home Improvement
. 2005 •2006 .2007 • 2008 0 2009
Source:HMDA, 2005 -2009
Conventional home purchase loans are a strong indicator of how many
families are able to purchase single - family housing in the city. The denial
rate for these loans rose from 11.8 percent in 2006 to over 16 percent by
2008 (Figure 6).
Government loans in Port Arthur are least frequently denied, as is generally
the case nationwide. Government loan denials rose to a peak of 8.3 percent
in 2006, then declined to their lowest rate in 2009.
Fig. 6. Denial Rates by Type of Loan
60% 1
35%
30%
25% —
PP
20%
15% 6 —
10 % —
--
.„.. „. _
Conventional Govemment Refinance Homelmprovement
.2005 •2006 •2007 •2008 .2009 1
Source: HMDA, 2005 -2009
1
1
I
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 - 65
1
Section V: Private Sector Analysis
Applicants for both refinance and home improvement loans already have
equity in their homes and have histories as borrowers. For these reasons,
securing additional financing ought to be easier. In general, there are two
reasons why homeowners apply for refinance loans. One involves borrowing
funds in the amount of the existing mortgage at a lower interest rate so that
the homeowner's monthly mortgage payment is lower. Certainly, this type of
loan is favorable, since the homeowner will be spending less income on the
home's mortgage and, theoretically at least, more money in the local
economy. The second type is one in which the homeowner extracts
accumulated equity in order to afford a large- ticket expense, such as a
wedding or a new vehicle, or to consolidate accumulated smaller debts. This
type of refinance can be viewed less favorably, since the owner is
disinvesting in the property by withdrawing accumulated wealth. From a
lender's point of view, this reduction in the owner's equity represents a
higher risk for the lender. After a peak of 28.4 percent in 2005, the rate of
denials for refinance applications steadily decreased to a low of 17.0 percent
in 2009.
Historically home improvement loan applications have the highest rate of
denials, but this may be due to the fact that lenders use the home
improvement category to report both second mortgages and equity -based
lines of credit. Although home improvement loans may be a means for
financially ailing homeowners to generate funds for needed repairs, in the
City of Port Arthur denial rates rose to exceptionally high rates in 2006 (37.8
percent) and 2009 (37.7 percent). An important consideration in this area is
the fact that nearly half of Port Arthur's housing stock is more than 50 years
old. Reinvestment in the form of home improvement is crucial to maintaining
the supply of comfortable —and ultimately sellable— homes. Without
improvements, homeowners are unable to command a fair market value
once they decide to sell. Declining denial rates on these types of loans may
reflect changing policies in the lending industry, but this is still an area that
may warrant some attention in the City of Port Arthur when it occurs. The
associated disinvestment can have an undesirable effect on the community
when it occurs in great numbers.
When loans are denied, lenders record the reasons for these decisions.
Figure 7 shows the percent of denials by reason for the period from 2005 to
2009 for all loans of all types. In all years, the most common reason for
denying loans continues to be the applicant's Credit History. Although this
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5.66
Section V: Private Sector Analysis
rate has begun to decline in recent years, it has consistently maintained a
rate between 39 and 51 percent.
In earlier years, the second most common reason for denial was "Other"
reasons which showed a dramatic decline as reason for denial from its
recent high of 30.5 percent in 2005 to an historic low of 6.7 percent in 2009.
However, this pattern appears to be consistent among markets nationwide
and most likely is a function of recent changes in HMDA reporting criteria or
analysis methodology, or changes in the definition of "Other" reasons. Still,
the decline of denials for this reason since 2005 as a reason for denial is
noteworthy.
Insufficient Collateral (13.4 percent in 2009) and Insufficient Cash, Private
Mortgage Insurance denied or Bad Data (12.3 percent) have similar
frequency across the study years. While both have been steadily slightly
higher since 2007, much of the difference appears to have been absorbed by
"Other Reasons" through these years, again alluding to category redefinition.
Debt -to- Income ratio (19.3 percent in 2009) has been rising, and has now
outpaced Insufficient Collateral and Insufficient Cash, Private Mortgage
Insurance or Bad Data. However, the difference between the increase in
Debt -to- Income and the decline in Other Reasons since 2006 is so similar
(10.0, as opposed to 11.7), this appears to be nearly completely a result of
redefinition of Other Reasons.
Employment history continues to be the least common reason for denials,
and, despite small fluctuations, accounted for Tess than 2 percent of denials
in any year.
13 This category was redefined in 2004 and now includes reasons that were independently specified in prior years. Consequently,
denials for "Other" reasons increased for all applicants in 2004 and 2005, and have been declining since then. A second
reason for more recent decline in this category has to do with ongoing training for persons responsible for coding denial
reasons. As their abilities improve, denial reasons are more frequently attributed to one of the other categories, diminishing
those that remain in this category.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -67
Section V: Private Sector Analysis
Fig. 7. Reasons for Denial of Applications
60% -
50% —
?.9 30%
w
0
Q 20%
o I
10%
•
0% •
2005 2006 2007 2008 2009
Debt - Income Employment History — e — Credit History "Collateral Cash, PMI or Bad Data — Other
Source: HMDA, 2005 -2009
ANALYSIS BY RACE AND ETHNICITY
APPLICATIONS AND DENIALS
Ideally, the percentages of loan applications received would mirror the
percent of population of each racial group. As described in the demographic
section, Port Arthur's 2000 population was comprised of 38.9 percent White
and 43.3 percent Black residents. Census 2010 data suggest a shift to 36.1
percent White and 40.7 percent Black residents. The difference was made up
among those reporting some other race (from 9.2 to 14.1). At the same
time, those reporting Hispanic ethnicity rose from 17.5 percent in 2000 to
29.6 percent in 2010.
There appears to be a great deal of disparity between loan applications
received from black and white applicants. Specifically, in 2005 the percent of
applications made by white consumers was 54.1 percent, representing a
difference of more than 15 points between this ratio and the white
population in Port Arthur in 2000. By 2009, 67.2 percent of applications
were received from white consumers; a difference of more than 30 points
when compared to their representation in the overall population. At the
same time, the rate of applications from black consumers declined from 18.5
in 2005 (as compared to their 2000 rate of 43.3 percent of the population)
to 11.9 percent in 2009 (compared to their 2010 rate of 40.7 percent of the
population). Thus, black consumers would appear to have been
underrepresented by nearly 25 points in 2005 and nearly 30 points in 2009.
Furthermore, while applications from black applicants diminished by 6.6
points over the five -year study period, those from white applicants increased
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -68
Section V: Private Sector Analysis
by more than 13 points —this at a time when the white population declined
and the black population increased. While applications from white consumers
approach double their estimated representation in the population, the rate of
applications from black consumers continues to be about Tess than one -half
of the city's black population. Black applicants appear to be
underrepresented as consumers in lending in the City of Port Arthur.
Between 15.4 and 19.1 percent of applicants did not provide their race over
the study period (a rate that fluctuated from 2005 to 2009), leaving p ( ), 9 the
distribution by race to speculation. While it is not possible to determine
whether loan approval or decline is associated with race, it does not
eliminate the possibility that black consumers may incur barriers to the
lending market in the City of Port Arthur.
Hispanic applicants also may be underrepresented in the lending market. In
2005, 7.8 percent of the applications were from Hispanic consumers, as
compared to their (2000) 17.5 percent representation in the population. The
application rate steadily increased to 12.3 percent by 2008, falling to 10.5
percent in 2009, while 2010 Census data report the Hispanic population to
have grown to 29.6 percent by that year. This decline in applications
accompanying an increase in the population may be significant as a signal of
discrimination in the marketplace. At the very least, it appears that Hispanic
applicants may incur barriers to accessing the lending market in the City of
Port Arthur.
Fig. 8. Applications by Race and Ethnicity
80% -
70%
60%
50% —
C
0
6 40%
a
W 30% —
0
20% —
10% — — — — —
0% I N E -
2005 2006 2007 2008 2009
OW,Ite OBlack •Asian OOther ONOt Given OHispanic'
Source: HMOA, 2005 -2009
The pattern for denials among only white applicants closely mirrors the city's
pattern overall, which is not unexpected considering that nearly two - thirds
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -69
Section V: Private Sector Analysis
of all applications are from white consumers. When examining reasons for
denial, unacceptable credit history maintains its position as the most
common, ranging from a low of 35.4 percent in 2005 to a recent high of
47.9 in 2007 (Figure 9a). Insufficient Collateral and the combined category
of Inadequate Cash, inability to acquire Private Mortgage Insurance (PMI) or
Bad Data are equally likely denial reasons across all five years. This
combined category speaks to the funds required to secure a loan and
illustrates a decline in available cash among perspective borrowers. At the
same time, Debt -to- Income has been on the rise, increasing to 19.6 percent
in 2009. Employment History remains as the least frequent reason for denial
(only rising over 1 percent in 2009), while Other Reasons declined to below
7 percent, which is mostly attributable to changes in the definition of this
category.
Fig. 9a. Reason for Denial of Application
WhiteApplicants
60%
50%
40%
m
O 30% 4.
E 20 %
a
2005 2006 2007 2008 2009
Debt -to- Income - Employment History Credit History 'Collateral - �' - Cash, PMI or Bad Data Other
Source: HMDA, 2005 -2009
The graph below illustrates denial reasons for applications from black
consumers. As with white applicants, credit history was the most common
reason for loan denials among black applicants (Figure 9b), however, the
frequency of denials for this reason is considerably higher among black
consumers than white (by an average of 12 points across the five years).
The rate has been rising from 46.4 percent to a recent high of 60.1 percent
in 2008.
While the two reasons of Insufficient Collateral and the combined category of
Inadequate Cash, inability to acquire Private Mortgage Insurance (PMI) or
Bad Data are nearly identical among white applicants, these measures are
quite distinct among black applicants. The frequency of denials due to
Insufficient Collateral was considerably lower among black applicants in all
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -70
Section V: Private Sector Analysis
years except 2006, when it was just one point higher than among white
applicants. Denials for inadequate Cash, PMI or Bad Data ranged from a low
of 5.4 percent in 2008 to a high of 12.2 percent the previous year.
Denials due to Debt -to- Income were considerably lower among black
applicants than among white, with the exception of 2008, when the rate of
22.8 percent among black consumers was nearly double the rate of 13.6
percent among white applicants.
The pattern of denials due to Other reasons somewhat mirrors that of
denials among white applicants, with two notable exceptions: a significantly
higher rate in 2007 (14.3, as compared to 10.7 among white applicants) and
a rate of just 1.1 percent the following year, as compared to 11.0 percent
among white applicants. Again, however, much of this difference is likely
attributable to the redefinition of the category and continued staff training in
classifying denial reasons.
Employment History remains low as a reason for denial of loans. There were
no loans denied for this reason in 2008, and the highest rate was in 2009,
with just 1.3 percent of applications denied for this. reason.
Fig. 9a. Reason for Denial of Application
Black Applicants
70% -
60% —
50%
= 40%
O
30%
a 20%
10%
090
•
2005 2006 2007 2008 2009
1 Debt -to- Income 1- Employment History Credit History -- V .- Collateral -0.- Cash L PMI or Bad Data - � - OMx I
Source: HMDA, 2005 -2009
The graph below illustrates denial reasons for Hispanic applicants.
Applications from Hispanic consumers ranged from 7.8 to 12.3 percent of all
applications, as compared to their estimated range of between 17.5 and
29.6 percent representation in the population.
The denial patterns cite Credit History as the most prevalent reason for
denial in all years, as was the case among all applicants. This reason rose
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -71
Section V: Private Sector Analysis
slightly in 2006 and 2008, and declined in other years. Denials for Other
reasons also declined over the period, with its lowest rate of 5.8 percent in
2009. This reason was consistently below that of both black and white
applicants in all years except 2008, when its rate of 8.4 exceeded black
applicants.
In most years, Insufficient Collateral was between the rates for black and
white applicants, with a high of 14.6 percent among Hispanic applicants in
2006 exceeding all others.
Debt -to- Income was higher among Hispanic applicants than any others in
the first three years, and I most years, the combined measure of Insufficient
Cash, inability to acquire Private Mortgage Insurance or Bad Data were
consistently higher than other groups. Employment History continues to be
the least frequent reason for denial, and no applications were denied for this
reason in 2005 and 2008. However, in the other years of the study period,
this reason was given at the highest rate among all groups compared.
Fig. 9a. Reason for Denial of Application
Hispanic Applicants
60% - _ - -- — -
50%
40%
30%
20%
10% • .. "111114111111111111111111
0% ••
2005 2006 2007 2008 2009
Debt -to- Income +'Employment History. """ Credit History ^o'COIlateral °7'�Cash, PMI or Bad Data Other
Source: HMDA, 2005 -2009
Asian applicants are quite infrequent in the City of Port Arthur and their
small number makes identifying trends over the five -year period difficult.
According to the Demographic overview (Section 2 of this report), Asians
made up 5.9 percent of the city's population but accounted for between just
1.2 and 2.4 percent of loan applications. While this may signal low access to
the lending marketplace, this may also be a reflection of cultural traditions
that promote "lending circles" or "lending clubs" through which individuals
rely on social networks to help them acquire funds for large purchases.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -72
Section V: Private Sector Analysis
While there do appear to be significant inconsistencies with regards to
reasons of denial for one race over the other, in general, rates of reasons for
denial somewhat closely mirror those for all races combined (Figure 7).
On average, no one race or ethnicity was less frequently denied on all
measures than any other.
White applicants were more frequently denied on the basis of Insufficient
Collateral (15.5 percent), Other reasons (15.3 percent), and Debt -to- Income
(11.6 percent) than any other group.
Black applicants were more frequently denied on the basis of Credit History
(56.4 percent) at a rate that is an overall average of 12.4 points higher than
white or Hispanic consumers.
On average, Hispanic applicants are more frequently denied for Inadequate
Cash, Private Mortgage Insurance or Bad Data (16.0 —an average of 6.9
points higher, overall). Hispanic applicants are also more frequently denied
for Employment History than any other group (2.0 percent, or an average of
1.3 points overall). While this may seem like a small differential,
Employment History is the least frequent reason of all among all applicants,
and this overall difference is higher than its frequency in most years.
The results of this analysis suggest patterns that may signal unfair practices
in the lending industry with regards to the application process. Conversely,
these patterns may not necessarily be signs of discrimination in lending, but
signals of discrimination in other areas. For example, such findings may
suggest that Hispanic consumers do not have the opportunities to maintain
steady employment in Port Arthur, which would hinder their ability to
establish and maintain creditworthiness. This should be an area of concern
and may warrant monitoring in the City of Port Arthur.
Overall, however, these data show only a small piece of the lending picture.
PURPOSE OF LOAN
In 2009, white applicants were denied most frequently on applications made
for the purpose of home purchase (56.3 percent), which was also the case
among Asians (11.7 percent) and those who identified their race as "Other"
(2.9 percent).
Black applicants were most frequently denied on applications made for home
improvements (25.2 percent), as was the case for Hispanic applicants and
those who did not give their race (13.0 percent each).
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -73
Section V: Private Sector Analysis
This information notwithstanding, with over 15 percent of all loan applicants
not reporting their race, any conclusions attempted from comparing data in
these areas may be critically flawed.
Nonetheless, the finding that so many applicants were denied loans for
home improvement (over 51 percent) may be significant in that their homes
may require maintenance. Conversely, since this category also includes
equity loans and lines of credit, it is possible that applicants sought cash
from the equity in their homes for purposes other than home improvement.
This is an area that may merit attention.
Fig. 10. Denial Rates by Race and Purpose of Loan
60%
Hispanic ethnicity includes White and Black applicants.
50 To
40
30%
20% —
— 11 - 1 I
00,0
White Black Asian Other Not Given Hispanic'
m Hame Purchase ■Refinance mHomelmpovement
Source: HMOA 1009
ANALYSIS BY INCOME
While it is not difficult to understand that those whose earnings exceed 120
percent of the area's median would be more likely to secure loan approval,
the graph below illustrates the disparities that exist among income levels.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -74
Section V: Private Sector Analysis
Fig. 11. Approvals by Median Income
40% -
35%
30%
25%
m 20%
15%
10%
5% — —
tia
PI
2005 2008 2007 2008 2009
O <50% ■ 50% to 80% 080% to 100% 0 100% to 120% •>120% Income not avail.
Source: I1MDA, 2005-2009
Low- and moderate - income households make up a substantial portion of the
City of Port Arthur's total households. According to the description in the
demographic section of this report, in 2000, 32.1 percent of the city's
residents earned under $15,000 annually. As compared to a median income
of $26,455, this means that one -third of the population earned less than 57
percent of this amount. By 2009, it is estimated that 25.7 percent of the
population earned less than $15,000. As compared to a median income of
$30,339, this means that about one - quarter of the population earned Tess
than 50 percent of this amount. Because homeownership is the most
effective way to increase personal wealth, it is especially essential for these
households to have access to credit for home loans.
In the City of Port Arthur, of the 1,419 loans originated in 2005, 22.2
percent went to low- and moderate - income borrowers combined: 6.9
percent to those households earning Tess than 50 percent of the area's
median and 15.3 percent to those earning from 50 to 80 percent (Figure
11). Of the 996 loans originated in 2009, just 4.7 percent went to low- and
moderate - income households combined, with approvals evenly divided
between those earning less than 50 percent and those earning from 50 to 80
percent of the area's median (2.4 percent each).
By 2009, fewer than one -half (47.5 percent) of all loans originated, as
compared to 77.7 percent in 2005. Much of the 30 -point difference was felt
among low- income borrowers (earning from 50 to 80 percent of the area's
median income) whose origination rate fell by 17.5 points.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -75
Section V: Private Sector Analysis
Households earning 80 percent to 100 percent of the area median received
9.3 percent of the loans originated in 2005, but saw approval rates fall to
6.3 percent by 2008. In all years of the study period, the highest proportions
of loans went to those earning over 120 percent of the area's median,
ranging from a high of 45.4 percent in 2007 to a recent low of 31.7 in 2009.
Originations to those whose income is not available ranged from a high of
8.5 (in 2006) to a low of 3.6 in 2009.
On average, 6.0 percent of applicants' incomes are not available. While there
are several reasons why incomes may not be reported, it is unlikely that
these applicants would be from low or moderate income levels. Applicants
who earn incomes near the median are more likely to be required to verify
income; whereas, those at the highest level often do not face this
requirement. In 2009, this figure was 4.7; therefore, it is almost certain that
the additional originations (described above) went to the highest earners.
This means that an additional 4.7 percentage points can be added to those
of higher income groups, bringing the highest earners' approval rate to 31.1
percent in 2009, illustrating even further disparity among income groups in
loan approvals.
An examination of approval rates by income by race can prove to be a
revealing tool. The uppermost bars on the graph shown in Figure 12
represent the mean rate of approvals for each income group (Low /Mod,
Middle and Upper), regardless of race.
White applicants (represented by the second set of bars) were the only
group consistently above the mean at all income levels, by an overall
average of just over 14 points. Applicants who did not provide their race
were also above the mean among Low /Mod - income borrowers, placing them
7 points above the mean among Low /Mod- income borrowers, but still falling
nearly 7 points below the mean across all income levels. All other groups fell
below the mean in all income levels.
Black applicants were well below the mean at all levels, falling more than 57
points below the mean overall with the greatest difference primarily found at
the middle income level (80 to 120 percent). The aggregate among Hispanic
applicants was nearly 28 points below the mean, with the greatest difference
primarily at the highest income level.
Those who identified their race as "Other" also fell 57 points below the
mean, as did black applicants. In this instance, the overall score was
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5-76
Section V: Private Sector Analysis
adjusted to account for the fact that there were no upper- income applicants
(earning more than 120 percent of the area's median) in this category.
Fig. 12. Approval Rate by Race and Income
I l I 1 1 1.
Mean
I I I I 1
.Mle
I I I I 1
Black
Asian
I
Other
1 1 1 1
Not Given
I I 1 1 1
Hispanic'
I I 1 I
0% 10% 2D% 30% 40% 50% 60% 70% 80% 90% 100%
Upper ■Middle OLow /Mod
Source : HMDA, 20052009 (> 120 %) (80 to 120 %) ( <80 %)
While this analysis reveals distinct racial differences in rates of approval, it is
difficult to disentangle race from income, especially in light of the rate of
applicants who did not specify their race (ranging from 15.4 to 19.1 percent
across all years). Still, there appears to be some evidence that race plays a
role in loan approval in the City of Port Arthur, which may or may not be
specifically attributable to overt discrimination in lending.
Conventional wisdom points to structural factors that serve to restrict access
to the services that accompany participation in the homeownership and
mortgage arenas. When prospective homebuyers are prevented from
accessing the appropriate opportunities, structural discrimination takes
place. Obvious examples of these factors may be steering in the real estate
industry, a lack of earning opportunities in the labor market, or poor
opportunities for education that can lead to incomes that might improve
creditworthiness. While these examples are easy to cite, most structural
discrimination is quite unintentional, very subtle and extremely difficult to
identify.
ALTERNATIVE LENDING SOURCES
Sub -Prime Lenders
While conventional lenders focus their marketing efforts on consumers with
few or no credit blemishes (those with "A" credit), an alternative source of
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -77
Section V: Private Sector Analysis
loan funds for consumers with lower credit scores ( "B" or "C" credit) is sub -
prime lending institutions. While sub -prime lenders simplify the application
process and approve loan applications more quickly and more often, these
lenders also charge higher interest rates to help mitigate the increased risk
in lending to consumers with poorer credit histories. Interestingly,
consumers who borrow from sub -prime lenders often do qualify for loans
from conventional lenders, but succumb to marketing tactics that encourage
them choose sub -prime institutions over conventional. Recent studies by
Freddie Mac, the government- sponsored entity that purchases mortgages
from lenders and packages them into securities that are sold to investors,
show that between 25 percent and 35 percent of consumers receiving high
cost loans in the sub -prime market qualify for conventional loans. This may
be a result of the loss of conventional lenders in the community. Having
fewer lenders from which to choose, consumers select those that are
conveniently located, even at a higher price.
According to HUD's Subprime Lender criteria, 6.1 percent of the lenders
active in 2009 lending in the City of Port Arthur were subprime lenders.
Generally located outside the state, their services are most often sought
electronically through on -line brokers. These lenders are easy to access
nationwide, making it convenient to shop for loans; and the local absence of
top -tier accessibility can make the subprime market generally more
attractive for local borrowers.
Predatory Lenders
While most sub -prime lenders serve a need by targeting borrowers with sub-
par credit histories, some go too far. Those that do are known as predatory
lenders. Lending becomes predatory when lenders target specific populations
(such as low- income, minority, or elderly homeowners), charge excessive
fees, frequently refinance the loan, and often mislead the borrower. Since
wealth is often tied to property ownership, this system threatens to deprive
residents of their assets by overextending their home's equity and, in some
cases, foreclosing on the homes of people who cannot afford the high
interest rates and associated fees.
Mainstream financial institutions often unwittingly exclude the very groups
targeted by predatory lenders when they market loan products. Additionally,
unknowing consumers find themselves at a disadvantage due to a lack of
14 Information for this discussion provided by Miami Valley Fair Housing Center.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -78
Section V: Private Sector Analysis
financial savvy. The lending process can be complicated, and often
consumers are ill- prepared to deal with the large volume of paperwork
required for the loan process. Most predatory lenders use their clients'
inexperience to their advantage, however, and do not provide quality
counseling for consumers seeking their products. They use the consumers'
ignorance as their opportunity to reap profits. In the end, borrowers pay
substantially higher interest rates and purchase unnecessary credit, life, and
disability insurance products.
Sub -prime lenders charge higher rates to compensate for higher risk. While
these types of loans and lenders provide an important service to those
without opportunities, these institutions have been associated with predatory
lending nationally and are a source of potential concern locally. When
compared to the list of sub -prime lenders provided by HUD, there were 5
identified within the City of Port Arthur that wrote loans in 2009,
representing 4.8 percent of the value of loans written.
"Payday Lenders"
Another source of loans is check cashing or "payday" lenders. Check cashing
outlets (such as currency exchanges) cash payroll, government, and
personal checks for a fee. Their popularity increases as customers lose
access to banks or cannot afford rising fees associated with the inability to
maintain minimum balance requirements. Consumers use these outlets for
their banking needs and are charged for the services they receive. These
businesses offer temporary "payday loans" by accepting a postdated check
from the customer, who receives the funds immediately, minus a fee. When
used regularly, these fees can equate to double -digit interest rates.
Although these services tend to be located in areas of highest minority and
low- income concentration, they are also found in very close proximity to
local lenders. Customarily, they fill the void left by banks that do not service
an area or have moved from it.
A cursory review of local Yellow Pages yielded 20 personal lending sources,
including pawn shops, "payday" lenders, personal and title loan
establishments, and other similar services. Most of these lenders are located
near the city center, where they are easily accessible by households earning
below the median.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -79
Section V: Private Sector Analysis
Map 2: Locations of Other Lenders in the City of Port Arthur
Orange County
FL
Jefferson County
■
aramle Lenders ~� -
!morn. as Pct of Median
Less Man 30%
30.1 % -50%
50.1% - 80%
80 1% -120%
1201% -250%
Other Private Entities that Impact Fair Housing Choic
REAL ESTATE AND HOUSING DEVELOPMENT INDUSTRY
Many realtors believe that one of the greatest impediments to fair housing is
the prevalence of predatory lending. While fair housing assures that housing
cannot be denied on the basis of race, color, religion, sex, handicap, familial
status or national origin, it does not necessarily follow that everyone who
wants a house should have one.
The Nation's recent foreclosure crisis revealed financial readiness was one of
a number of key factors overlooked in lender underwriting. When realtors
and lenders pursue homeownership for consumers who may not be
financially ready for the commitment, they set the stage for lenders to take
advantage of them through interest rates and escalating programs that
mitigate the increased risk to the lender. This results in overburdening the
finances of those who are least able to recover in an uncertain economic
market.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -80
Section V: Private Sector Analysis
The SAFE Act, requiring originators of mortgages for homebuyers in Texas to
be State certified is expected to change the originator's view of the home
buying process.
Realtors generally report improvements in fair housing over the last 5 years;
most notably, the near absence of red - lining and steering. Today's
consumers have a diverse choice of realtors: racially; ethnically; and
linguistically. The diversity of choice engenders greater credibility and less
suspicion when receiving advice on purchasing a home.
Generally, a real estate agency's policy should be to require all prospective
homebuyers to prequalify before they can spend time with an agent
shopping for homes. Prequalification comes from a lender and is based on
factual information describing the client's creditworthiness based on an
established underwriting process. The result of prequalification is to assist
agents in focusing on homes that the customer can afford.
The real estate agency also should require agents to provide a consultation
with homebuyers to help determine homeownership readiness before
selecting homes to view. This consultation helps homebuyers understand the
implications of homeownership and offers an opportunity for agents to get to
know the clients better. In addition to helping agents focus on selecting
appropriate listings for their clients to view, the combination is also
considered an added measure of security for agents before they "begin
driving around town with a carful of strangers."
On the financing side, loan processors stated that down payment assistance
programs, subsidized loans and revitalization strategies have been
instrumental in bringing clients representing "all realms" of the population to
apply for loans to purchase homes.
HOMEOWNERS INSURANCE INDUSTRY
Fair housing is about expanding the housing choice for those restricted by
economic, social, political, and other forces. The persistence of unfair
housing underlies unequal education, unequal access to jobs, unequal
income, and redlining. Redlining is an exclusionary practice of real estate
agents, insurance companies, and financial institutions that exists when
'there is a lack of activity by [an] institution to extend credit or coverage to
certain urban neighborhoods because of their racial composition; or they are
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -81
Section V: Private Sector Analysis
denied because of the year -to -year change in racial composition and the age
of structure in a neighborhood regardless of the creditworthiness or
insurability of the potential buyer and policy holder or the condition of the
property. "15
Over 40 years ago, an observation was made that "insurance is essential to
revitalize our [American] cities. It is the cornerstone of credit. Without
insurance, banks and other financial institutions will not —and cannot —make
loans. New housing cannot be repaired. New businesses cannot expand, or
survive. Without insurance, buildings are left to deteriorate, and services,
goods and jobs diminish.i This statement can accurately describe many
cities in 2011 as well as those in 1968. Investigations and statistical and
applied research throughout the United States has shown that residents of
minority communities have been discouraged in pursuit of homeownership,
while many predominantly white neighborhoods have been successful in
attracting those seeking the American dream of owning a home.
Discrimination in the provision of housing insurance has a lasting effect on
the vitality of America's neighborhoods. Many traditional industry
underwriting practices which may have some legitimate business purpose
also adversely affect minorities and minority neighborhoods. While more
recent studies have found little evidence of differential treatment of
mortgage applications, evidence does suggest that lenders may favor
applicants from Community Reinvestment Act (CRA)- protected
neighborhoods if they obtain private mortgage insurance (PMI). The
requirement of obtaining this additional type of insurance may actually mask
lender redlining of low- income and minority neighborhoods. For loan
applicants who are not covered by PMI, there is strong evidence that
applications for units in low- income neighborhoods are less likely to be
approved. Furthermore, these potential homeowners are more likely to be
subject to policies that provide more limited coverage in case of a loss, and
are likely to pay more for comparable policies.
Another critical factor in marketing of insurance is the location of agents.
Most of the property insurance policies sold by agents are to insure within
neighborhoods in which the agent is located. Studies have shown that the
15 Hutchinson, Peter M., James R. Ostas, and J. David Reed, 1977, A Survey and Comparison of Redlining Influences in Urban
Mortgage Lending Markets. AREUEA Journal 5(4):463 -72.
16 National Advisory Panel on Insurance in Riot Affected Areas, 1968.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -82
Section V: Private Sector Analysis
distribution of agent locations was clearly related to the racial composition of
neighborhoods.
A review of the local Port Arthur Yellow Pages'' shows that the major
insurance companies that provide homeowners insurance are predominantly
located throughout the city center and to the northwest. Their distribution
suggests that they fully serve households of all income levels. Primarily, it is
higher- income households who do business with insurance agents outside
their neighborhoods.
Map 3: Location of Insurance Agencies in the City of Port Arthur
Orange County
J
1 . f
ft
<`n
Jefferson County `�
- r.,...w j .%
Income as PO w Beam
L $lwM
9.1% WS
SO VA 12011
INTERNET ADVERTISING
The real estate industry depends largely on marketing through the Internet,
thereby eliminating much of the initial direct contact. A review of randomly
selected real estate sites on the Internet revealed no use of human models
that would suggest discriminatory advertising. However, just one -third
17 on -line review of www.yellowpages.com, accessed 5/11/11
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5-83
Section V: Private Sector Analysis
percent displayed the HUD fair housing logo somewhere on the website.
While many of these did not appear on the agency's "home page ", they were
associated with specific home listings. In other words, home seekers must
delve deeply into the page before realizing the assurances of fair housing
practices.'
PRINT MEDIA ADVERTISING
In the context of fair housing, discriminatory advertising is any advertising
that indicates any preference, limitation, or discrimination based on race,
color, religion, sex, handicap, familial status or national original, or an
intention to make any such preference, limitation, or discrimination. Overt or
tacit discriminatory preferences or limitations are often conveyed through
the use of particular words, phrases, or symbols.
The major newspaper in Port Arthur is the Port Arthur News. Traditionally
the PA News has adhered to fair housing recommended standards and
avoids discriminatory practices in real estate advertising. Port Arthur is also
served by the Beaumont Enterprise which adheres to fair housing
recommended standard and avoids discriminatory practices in real estate
advertising.
There are at least four (4) real estate advertisement magazines in the
Golden Triangle Area, all of which contain Port Arthur listings and adhere to
fair housing recommended standard and avoid discriminatory practices in
real estate advertising.
18 on -line review of www.yellowpaqes.com, accessed 5/11/11.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 5 -84
Section VI: Summary of Progress and Conclusions
Section VI: Summary of Progress and Conclusions
This section presents the Fair Housing Analysis Conclusions for the Port
Arthur 2011 -2015 Consolidated Plan. It includes actions taken to address
impediments to fair housing choice presented in the City's most recent
Analysis of Impediments prepared in 2006 and the State of Texas 2011
Phase 1 for Disaster Projects applicable to Port Arthur (See Appendix A).
The update centers on Public /Private information regarding the real estate,
insurance and banking industries, and Public Housing.
Progress continues to be made on the issues developed in 2006, reported
annually in the City's Consolidated Annual Performance Evaluation Report
(CAPER).
Summary of Progress
CONCLUSIONS AND RECOMMENDATIONS 2006
The City gathered and examined the existing data on policies, practices,
procedures, patterns, and conditions affecting the location, availability, and
accessibility of housing. Because of its findings, the City identified possible
unfair housing practices. A summary of the identified impediments to fair
housing choices in the City of Port Arthur and recommendations for
minimizing or eliminating these impediments are as follows:
PORT ARTHUR 2006 IMPEDIMENTS
The City documented three principal impediments to fair housing choice.
These impediments were as follows:
• Raw Home Mortgage Disclosure Act (HMDA) data in 2005 revealed
apparent inequity and disparity in on protected classes obtaining
mortgage financing from several financial institutions.
• Low number of protected class loan origination from 50% minority
areas.
• Historic segregated patterns in several neighborhoods.
Assessment of Accomplishments Since 2006
The City's 2009 -10 CAPER cites actions taken and outreach meetings
supported as part of the objectives to address disparity and inequality in the
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 6 -85
Section VI: Summary of Progress and Conclusions
private housing market. Extensive credit counseling and Home /CDBG
financial assistance mirrors the City's demographic composition to the
greatest extent possible. Port Arthur needs to continue to work on these
impediments, as well continue to consider the current economy.
Suggested 2011 Impediments
Impediments Identified
The Fair Housing Analysis update for Port Arthur includes impediments to
fair housing choice currently being addressed and the plans recommended to
remedy them. The City's prior Analysis of Impediments was conducted in
2006 and included issues that are carried over to this update. This update is
based on available public and private sector information from the City of Port
Arthur, the real estate, insurance and banking industries, the State of Texas,
and the HUD Offices of Fair Housing and Equal Opportunity and Community
Planning and Development.
Specifically based upon the current data available, and in Tight of the new
State A.I. for Disaster Projects, the City will continue to document and
report its actions to HUD on the removal of impediments through Annual
Reports (CAPER) which are a part of the Consolidated Planning Process.
IMPEDIMENT #1
Although HMDA data does not completely portray the effect of poor credit
and income issues, the data suggests some disparate treatment of protected
class residents in mortgage loan transactions.
Proposed Action #1
The City will continue to meet with local financial institutions regarding
Home Mortgage Disclosure Act (HMDA) activity, as well as continue the
City's support of public /private partnerships to address community lending
needs for lower income citizens.
IMPEDIMENT #2
Low - Moderate and protected class residents require education and related to
fair housing rights and responsibilities as well as to mortgage loan products.
Proposed Action #2
City of Port Arthur should continue to Affirmatively Further Fair Housing and
work in close cooperation with local realtors and Golden Triangle Fair
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 6 -86
Section VI: Summary of Progress and Conclusions
Housing Consortium to undertake aggressive education and outreach
campaign related to fair housing rights and responsibilities and inform
minority and low to moderate income citizens of mortgage loan products.
The City will use the State's FHAST reporting form to cover Disaster Project
fair housing issues. (See Appendix A)
IMPEDIMENT #3
The Port Arthur Housing Authority and the rental industry need to continue
in close partnership with the City regarding lower income protected classes
ability to be sheltered in a non discriminatory manner.
Proposed Action #3
Coordinate with Port Arthur Housing Authority to continue to educate and
inform landlords of Section 8 voucher program.
IMPEDIMENT #4
The City believes that local banks and insurers need to encourage financial
investment in low wealth and protected class neighborhoods.
Proposed Action #4
Support partnerships with local banks and insurers to encourage financial
investment in low wealth and protected class neighborhoods.
IMPORTANT CONSIDERATIONS
Access to and understanding of the State and Federal Fair Housing Laws tell
us that fair housing is within reach in Port Arthur; however, four
impediments do not give the whole picture. Other barriers exist, but,
regrettably, they are not quite within the realm of public control.
Furthermore, they are not exclusive to the City of Port Arthur. These
limitations are largely ones that exist within the individuals themselves, such
as lack of education, language barriers, suspicion of public agencies, and
other cultural or social characteristics.
Current (since 2008) National policies of the major mortgage resources such
as Freddie Mac, Fannie Mae, and Ginny Mac are some of the reasons behind
the reversal in the pattern of loan denials (conventional denials lowest in
frequency seconded by government denials). They may be a reflection of
more stringent application of government loan criteria by local
administrators, more lenient guidelines among conventional lenders, or
some other reason. Further investigation is recommended.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 6 -87
Section VI: Summary df Progress and Conclusions
During this review and update by the City of Port Arthur, some situations
were discovered that, while not qualifying as impediments, per se, indicate a
certain amount of unfairness and have the potential to foster unfair housing
practices.
1. Loans granted to lower- income borrowers decline in frequency in areas
with higher minority populations. While this may be a result of fewer
opportunities for homeownership due to the commercial or industrial
nature of the surrounding geographic area, this may be an area that
warrants further investigation.
2. There is some evidence that race plays a role in loan approval in the
City of Port Arthur, which may or may not be specifically attributable
to overt discrimination in lending.
a. Black loan applicants are substantially underrepresented in
comparison to their frequency in the population, suggesting that
black consumers may incur barriers to the lending market in the
City of Port Arthur.
b. Hispanics appear to be underrepresented as applicants,
suggesting that they may incur barriers to accessing the lending
marketplace.
c. Application approval among black and Hispanic consumers is well
below the mean at all income levels. This may suggest the
absence of opportunities to maintain steady employment in Port
Arthur, which would hinder their ability to establish and maintain
creditworthiness, or a lack of familiarity with the loan application
process.
In response, the development of the city's fair housing plan should consider
the following improvements.
1. Ascertain that low homeownership rates (where they occur) are a
reflection of a geographic area's function and not a reflection of the
race, ethnicity, or income levels of its residents.
2. Remedy high vacancy rates in areas with high ethnic concentrations by
ensuring availability of and access to services and amenities that will
attract other residents.
3. Encourage compliance with equal opportunities in employment to
create and maintain sustainable employment.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 6 -88
Section VI: Summary of Progress and Conclusions
4. Take steps to educate credit consumers in management of household
finances and responsible use of credit.
NATIONAL COMMUNITY REINVESTMENT COALITION (NCRC)
Through workshops, conferences, investigation of civil rights complaints,
systemic "testing," education and outreach, fair housing planning and "best
practice" compliance initiatives, NCRC Fair Housing provides technical
assistance to our members in rural, suburban and urban communities to
promote economic justice and equal housing opportunity in our nation.
NCRC Fair Housing is currently focusing on increasing our members capacity
to challenge discrimination, creating a anti - predatory lending member
network to challenge discriminatory lending, and to build community lender
partnerships that celebrate good business and access to credit.
The mission of the NCRC is to increase fair and equal access to credit,
capital, and banking services and products because discrimination is illegal,
unjust, and detrimental to the economic growth and well being of our
society. NCRC is a HUD Qualified Fair Housing Organization. Seeking to
support long -term solutions, NCRC provides resources, knowledge and skills
to build community and individual net wealth.
NCRC is at the vanguard of a growing movement in which community
leaders in rural and urban areas across the nation are becoming educated
about, and active in, efforts to affect the flow of capital and the provision of
fair housing and fair lending services in their neighborhoods.
NCRC has worked to make fair housing prevalent in all communities, to
increase the capacity of neighborhood -based organizations, and to promote
community - lender partnerships. These goals have been accomplished
through fair lending testing, research, client counseling, investigating
predatory lending practices, pro- integration activities, education and
outreach programs, and private enforcement. NCRC Fair Lending
professional staff testified on Capitol Hill, served as a resource to both the
private and public sector, and are invited as "experts" to speak at
conferences throughout the nation.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 6 -89
Appendix A
Appendix A
State of Texas 2011 Phase 1 for Disaster Projects
COMPENDIUM OF IMPEDIMENTS AND POSSIBLE ACTIONS.
NOTICE: When reading this section, jurisdictions should note that certain
recommended action steps are the responsibility of the state, while some
action steps apply to local situations only (i.e., colonias). However,
jurisdictions should use the information contained within this AI and other
data about their communities to determine if an action step applies to their
community. For example, if a community does not have a provision that
limits participation in flood plains, that action step ( #5 -14) does not apply.
All communities using federal disaster recovery funds should submit a Fair
Housing Action Statement for Texas (FHAST) certifying that they have
reviewed all the impediments and action steps and proposed to implement
those that are applicable ( #5 -10). The state will review each jurisdiction's
FHAST statement prior to approval of projects or programs.
The action steps identified in this AI will apply to programs and funds
beyond the Federal CDBG Ike /Dolly Disaster Recovery funds as applicable to
regions in which specified impediments may exist and are identified, but in
drafting this AI, it was anticipated that the first application of the action
steps would begin with Round 2 funds under the Federal CDBG Disaster
Recovery Program being administered by the state after HUD approval of
this document. State agencies and local communities should include these
action steps in their ordinary course of business, in the first round of
program or funds after the AI is approved. For example, NOFAs or
application rounds currently in the field will not be required to retroactively
apply action steps, but new rules or application rounds after approval will
need to take this AI into consideration for the impacted areas.
This AI document will play a critical role in the deployment of more than $2
billion in disaster recovery Community Development Block Grant (CDBG)
funding that has been appropriated and allocated by the federal government
to help citizens and local governments recover from the devastation of
Hurricanes Ike and Dolly in 2008. The impediments and recommendations
contained within this document and supporting materials pertain to
furthering fair housing choice.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 90
Appendix A
While some impediments are reflective of practices in other states and
regions, those case studies have been utilized in this document with the
intention of providing guidance to furthering fair housing in the Ike and
Dolly impacted regions of Texas, which stretch across counties with
substantial damage, many of which are within one of four major councils of
government - the Deep East Texas Council of Governments, Houston -
Galveston Area Council, Lower Rio Grande Valley Council of Governments,
and South East Texas Regional Planning Commission. To determine if the
federal legal requirement of affirmatively furthering fair housing is being
met, one fundamental question to ask is whether governmental entities have
intentionally or unintentionally limited free housing choice by policy and
budget decisions. Another critical question is whether those administering
and receiving federal funds have sufficiently educated the public about the
Fair Housing Act and taken proper steps to enforce that Act.
The impediments to fair housing and action steps to address those
impediments outlined will apply to different jurisdictions in different ways.
Prior to signing a certification that they have a current and compliant
analysis of their impediments to Fair Housing choice and that they are
affirmatively furthering fair housing, jurisdictions should examine the
impediments below and determine if any apply to their situation. Not every
impediment can be resolved quickly and some may never be solved, but it is
necessary for each jurisdiction to assess its situation, examine its policies,
and confirm that it is taking appropriate actions related to the furtherance of
Fair Housing. This is a federally mandated requirement prior to applying for
public funds such as these CDBG funds. While HUD did not impose strict
adherence to AFFH rules for CDBG disaster recovery funds prior to 2008,
since 2008, HUD has more vigorously enforced the AFFH requirement and
has required Texas to update its 2003 AI as a condition of receiving Round 2
disaster recovery funds..
The content of this AI is not intended to find that the state or localities are in
violation of federal law.
This AI document is intended to identify historic impediments to affirmatively
furthering fair housing through research of AFFH case studies, literature, and
laws as they are represented throughout the nation and serve as a guide for
state and local governments to ensure compliance with federal law. Nothing
herein is intended to relieve the State of any of its obligations to comply with
federal housing laws and the Conciliation Agreement, entered into May 25,
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 91
Appendix A
2010. These obligations will continue to be met by the designated state
agencies, TDHCA and TDRA, or any successor agencies designated by the
Legislature.
The impediments are presented in two major categories— Private Sector
Impediments and Public Sector Impediments —but otherwise listed in no
particular order. Placement of the topic is not intended to designate relative
importance compared to other impediments.
Private Sector Impediments.
When one analyzes the Home Mortgage Disclosure Act information, the
results of testing by national Fair Housing organizations, on steering of
potential purchasers of homes, and the views expressed in the focus groups,
it appears there could be residual race -based factors impeding fair housing
choice in the market place at some level. Government has a role to play in
helping eliminate impediments in a free housing market and enforcing
existing laws like the federal and state Fair Housing Acts to eliminate
housing choice discrimination.
Both the federal and state Fair Housing Acts cover discrimination by private
property owners and those who work in related real estate fields.161 Private
sector impediments to affirmatively furthering fair housing for the purposes
of this AI center on mortgage lending issues, racial steering in home sales
and rental rejections based on factors impacting protected classes at a
higher level.
Impediment #1. Protected classes may experience disparities in home
mortgage lending and high cost loans.
The Home Mortgage Disclosure Act data that was assessed for this AI162
indicates that based on population totals, racial minorities do not receive
prime home mortgage loans in equivalent numbers to non - Hispanic whites.
This is true even when adjusting for income levels and comparing similar
incomes against white applicants. Since 2002, all homeowners have grown
in number with Blacks increasing in home ownership by 65,802 and Hispanic
or Latinos increasing in the number of homeowners by 320,671. The current
data indicates that Hispanics and African Americans tend to obtain more
costly loans and /or loans with other unfavorable features if they are
available. Several factors can contribute to the type of loan a borrower
receives, including (but not limited to) the type of housing, size of the loan,
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 92
Appendix A
debt ratios, and other non - racial and protected class considerations that
could affect the conclusions of the AI.
Recommended Actions — Impediment 1.
1. Existing real estate regulations require most persons working in the
industry to be licensed and receive substantial training to obtain and
maintain their Iicenses.165 Texas requires initial education for
licensing and (unless exempted by law) that existing licensees
complete at least 15 hours of continuing education every two years to
renew a license. The state should consider amending the Texas
Finance Code Chapter 156 (the Mortgage Broker License Act) to
require training in Fair Housing, including a course in affirmatively
furthering fair housing, as part of the initial training education
requirements166 and the 15 hour continuing education requirement
for license renewal every two years.
2. TDHCA, as a pilot program in the impacted areas and provided
sufficient bond proceeds, should consider implementing its existing
First Time Homebuyer training as allowed under the bond
indentures168 to include training on affirmatively furthering fair
housing for its participating brokers and originators.
3. TDHCA, as a pilot program in the impacted areas and dependent on
sufficient appropriations, should consider requiring individuals who are
going through homebuyer education classes169 to receive training in
how to recognize racially based mortgage declines or other race -based
adverse treatment and how to file complaints with the appropriate
agency if they believe they are being discriminated against.
4. TDHCA should monitor its First Time Homebuyer Program, comparing
the market's make -up of members of classes of persons protected
under the Fair Housing Act (thereinafter, members of protected
classes) and the makeup of its approved borrowers to determine if the
program is achieving loan originations in line with those expected.
This is relevant to the Hurricane impacted areas as many of the First
Time Homebuyer loans are provided in the impacted regions. The
result of this analysis and actions taken to improve fair access to
mortgage credit should be reported in the State Low Income Housing
Plan and Annual Report.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 93
Appendix A
5. The State legislature should consider requiring similar training and
monitoring provided in action steps under this impediment for all
statewide housing programs that offer single family mortgage
products using the state's private activity bonds.
6. TDHCA should work with housing and mortgage organizations to
provide educational materials related to affirmatively furthering fair
housing at financial conventions it attends, whether in print or as part
of a presentation.
7. As part of the ongoing conversations with persons interested in
housing at all levels, TDHCA should request that when meeting with
lenders and mortgage brokers to discuss issues and problems they
include issues indicated by the analysis of Home Mortgage Disclosure
Act (HMDA) data and Community Reinvestment Act (CRA)
requirements in minority and low -to- moderate income residential
areas and in serving the home mortgage credit needs of members of
the protected classes.
8. TDHCA staff already provides education materials in print and on its
website. As part of its continuing commitment to increasing
knowledge of housing related issues, the agency, dependent on
sufficient appropriations, should develop and distribute educational
materials describing the duties of lenders with regard to fair housing
and in particular the duty of lenders participating in programs
administered by government agencies to affirmatively further fair
housing.
9. As part of the counseling system in round 2, TDHCA should require
homebuyer education programs for disaster recovery recipients and
recipients of other existing TDHCA loans to include a financial literacy
component designed to educate the homebuyers regarding the
responsible use of home equity refinancing.
10.TDHCA should, subject to applicable law, build into its existing first -
time homebuyer programs requirements for the collection of data
about loan applicants with a sufficient level of data acquisition
(including borrower credit scores, incomes, down payment, debt ratio,
loan to debt ratios, and other factors). Participating borrowers should
be required to report information on loan applications and rejections
with reference to applicants who are members of protected classes.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 94
Appendix A
This data should be reported annually in the State Low Income
Housing Report and should be used to determine lender eligibility for
participation in the state's programs.
11. Similar to the current process to protect public investment in
affordable housing for self -help housing programs, the state should
consider specific term protections to prevent equity stripping abuses
affecting persons receiving assistance through disaster recovery and
other government- subsidized loans.
Impediment #2. There is inadequate information available to the real
estate community, governments and the public about fair housing
requirements and enforcement procedures.
Due to the urgency to develop this AI so disaster recovery funds could flow
to those Texans in need, the State did not conduct any direct surveys or
market tests to determine if steering, which is defined as the illegal practice
of directing members of minority groups to, or away from, certain areas or
neighborhoods, was taking place in the hurricane impacted area. With the
limited amount of testing done in No Home for the Holidays that found
discrimination in renting was occurring (the report included testing in
Houston and in post- Katrina New Orleans and revealed discrimination
against both racial minorities and persons with disabilities) this AI has
looked to external information that patterns of steering exist in other U.S.
communities. Due to the act of steering and it's potential impact on housing
choice, it is identified as an impediment in this document. Due to lack of
Texas -based information, this AI considered external information like the
Justice Department's judgment of $120,000 against Chicago area Re / /Max
East- West171 and the National Fair Housing Alliance's 12 city survey finding
that racial steering occurred at least 87 percent of the time.
Given the NFHA No Home for the Holidays report in 2005172 discussion of
discriminatory rental practices and the public comments in the focus groups,
it appears that individuals seeking housing and professionals involved in
producing, renting and selling housing would benefit from additional
discussion. Additional training regarding the Fair Housing Act and specifically
the affirmatively furthering fair housing provisions should be suggested to
private organizations and offered by TDHCA and TDRA.
There is a lack of understanding of the requirements of the Fair Housing Act.
In addition, when, coupled with a lack of understanding of the complaint
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 95
Appendix A
process for persons experiencing discrimination, this lack of understanding
can result in substantial impediments. Making certain that people
understand their rights and duties can be best solved by education.
Recommended Actions — Impediment 2.
1. In Texas, real estate sales are a regulated activity including licensing
requirements and continuing legal education requirements for the
professionals assisting people in buying and selling real estate.
Current statutes require education for persons involved in the listing
and selling of real estate both initially and to maintain their licenses.
The Texas Legislature, or the entity or entities responsible for
determining continuing education requirements, should consider
delineating that the existing requirement that fair housing laws be
taught as part of the continuing education requirements, in the Texas
Occupations Code, Title 7 §11101.455. The anticipated change would
require a minimum of two hours of the required six hours combined
during the compliance period be for education on the Fair Housing
Act including Fair Housing requirements and enforcement provisions
related to steering violations.
2. TDHCA should add to the educational materials prepared for real
estate professionals utilizing its programs, the concepts of Fair
Housing and affirmatively furthering fair housing. TDHCA should
require a certification that the materials were read and understood
prior to participating in TDHCA programs utilizing real estate
professionals including the disaster recovery programs.
3. TDHCA should work with agencies or other entities responsible for
providing educational materials to all real estate professionals, to
expand existing materials on how to utilize the TDHCA's programs, to
include concepts of affirmatively furthering fair housing and fair
housing duties of real estate professionals.
4. TDHCA should require a portion of the existing Homebuyer Education
Programs for persons using public funds to purchase homes to
include training on Fair Housing and how and where to report
suspected violations of the Fair Housing Act.
5. TDHCA should review the distribution of home purchases by
members of protected classes against the entire pool of applicants in
its existing programs that use real estate professionals to provide a
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 96
Appendix A
useful measurement of whether the process is working to provide
Fair Housing choice
6. The state legislature should consider requiring similar training and
monitoring as provided under the actions steps in this impediment
for other statewide housing entities that use private activity bond
funds or single family mortgages in transactions that involve real
estate professionals.
7. TDHCA should expand its existing educational materials, whether in
print or as a presentation, to include information related to
affirmatively furthering fair housing, and use them at the real estate
conventions and other real estate meetings TDHCA currently attends.
8. TDHCA should, with its established relationship with real estate
support organizations, seek to work collaboratively to determine the
best ways to help provide guidance to licensed real estate
professionals on working with clients under the rules of the state and
federal Fair Housing Acts and the full range of their housing options.
9. TDHCA should work to establish a section on its website to educate
consumers on fair housing law and on how to identify discrimination
10. TDHCA should offer to consult with organizations that provide
education to attorneys involved in real estate or financing of real
estate transactions to develop continuing legal education required by
the Government Code or the State Bar of Texas rules providing
training on Fair Housing and affirmatively furthering fair housing. It is
further recommended that this training should provide a continuing
legal education ethics credit.
11. TDHCA should include written materials and potentially a
presentation in its existing First Thursday compliance training
program for leasing professionals regarding the Fair Housing Act,
including affirmatively furthering fair housing training.
12. As part of its ongoing education relationship with organizations that
work with apartment ownership and management groups, TDHCA
should request that it be allowed to include Fair Housing Act training
at the association educational seminars, including affirmatively
furthering fair housing. TDHCA should offer written materials or
conduct the training in a breakout session.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 97
Appendix A
13. TDHCA should request that it be allowed to include Fair Housing Act
training, including affirmatively furthering fair housing at home and
apartment building trade associations meetings. TDHCA should offer
written materials or to conduct the training in a breakout session.
14. In grant contracts with local communities, TDHCA and TDRA should
require that chief locally - elected officials of funded subrecipients
receive Fair Housing training. The agencies should request that
appropriate city and county organizations or associations, provide
education for elected officials on Fair Housing Act, including
affirmatively furthering fair hou TDHCA and TDRA should assist
as available when requested and offer written materials or conduct
the training in a breakout session.
15. To assist all sub recipients of federal funds from TDRA and TDHCA in
being able to certify that they are affirmatively furthering fair
housing, the agencies should create new rules that requires third
party consultants administering or performing any role in the
administration of CDBG or other federal housing or community
development funds to complete an affirmatively furthering fair
housing training seminar and demonstrate competency in the area.
16. TDHCA should establish minimum standards and best practices for
fair housing and equal housing opportunity marketing plans of
contractors directed at outreach to members of protected classes to
meet the state rule requirements.
17. TDHCA and TDRA, if applicable housing is performed, should require
that all recipients of funding for owner or renter occupied housing
maintain an application log, with notation when the applicant is a
member of a protected class. These logs should be monitored by the
agency on a regular basis for fair housing compliance. TDHCA should
require the Texas State Affordable Housing Corporation (TSAHC) to
do the same on any funds provided to TSAHC by TDHCA and request
TSAHC to do the same of their state funds.
18. TDHCA should require that all sub recipients of disaster recovery
funds establish affirmative fair housing marketing plans that set
targets for serving members of protected classes. Success in
achieving goals should be a consideration in scoring future
applications for funding from sub recipients.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 98
Appendix A
19. All applicants for housing, community development, or infrastructure
funds from TDHCA and /or TDRA should be required to participate in a
training session that includes requirements to affirmatively further
fair housing.
20. Depending on sufficient appropriations, TDHCA and TDRA should
each provide sufficient staff resources to assure fair housing
compliance within their respective agencies. These staff should also
be responsible for arranging, providing, and certifying regular
training on fair housing and affirmatively furthering fair housing for
agency staff and recipients.
Impediment #3. The public is not sufficiently aware of their Fair Housing
rights and how to obtain the assistance necessary to protect those rights.
Local focus groups, the high dismissal rate of Fair Housing Complaints made
to HUD and national studies176 suggest that there is a need for enhanced
consumer information concerning the Fair Housing Act and reporting
complaints.
Recommended Actions — Impediment 3.
1. TDHCA working with other agencies involved in Fair Housing should
jointly produce Fair Housing Act Public Service Announcements to be
made available for broadcast in the disaster impacted area to
increase the public's awareness
a. Fair Housing rights,
b. identifying discrimination, and
c. methods for accessing fair housing resources to report
discrimination.
2. Depending on sufficient appropriation, TDHCA should work with other
agencies and organizations to distribute fair housing literature at
housing related events, trainings and presentations, additional and
other distribution sites. Distribution sites in the impacted areas may
include city offices, libraries, CDBG funded agencies and Community
Action Agencies. Materials should be available in English, Spanish and
other languages as appropriate to ensure that protected population
sectors are reached, even if significant portions of them are not
proficient in English.
3. Consistent with the Fair Housing Act, TDHCA, TDRA and funded sub -
recipients have historically conducted fair housing activities at
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 99
Appendix A
various times of the year and should continue to fund, depending on
sufficient appropriations, or collaborate with public and private
agencies, organizations and groups to plan and conduct fair housing
activities.
4. Consistent with the Fair Housing Act, TDHCA, TDRA and funded sub -
recipients should continue to promote and conduct events to
celebrate April as Fair Housing Month, and direct sub recipients to do
the same. These events can demonstrate support for fair housing and
build awareness.
5. If federal funding is available, TDHCA and TDRA should establish and
maintain a website page or a link for statewide fair housing
information as outlined in other recommendations in this AI through
which information is made available to the public regarding fair
housing law, the duties of the state and local jurisdictions to
affirmatively further fair housing, access to FHAST Forms as provided
elsewhere in this AI for each local jurisdiction, a streamlined and
expedited process for submitting complaints of individual acts of
violation of the fair housing law online and a streamlined and
expedited process for submitting complaints of the failure of
government entities to affirmatively further fair housing. This website
should provide linkages and referrals to HUD's FHEO division.
Impediment #4. "Not in my Backyard (NIMBY) may be an impediment to
fair housing in Texas communities.
As discussed in the earlier sections of this document, the phenomenon
known as NIMBY (Not in My Backyard) is often a significant factor that can
impede the development of affordable housing, the building of public
housing, the placement of Section 8 Voucher holders and group homes, and
numerous other housing programs. This is suggested by reviewing records of
public testimony at TDHCA Governing Board meetings and public hearings.
NIMBY can impact decisions on the location of infrastructure projects like
sewage treatment plants, waste disposal facilities or similar community
necessary projects. This very vocal NIMBY is expressed not only through
public testimony but in the lobbying of public officials, and is often reported
in the media, in blogs and on websites.
Recommended Actions — Impediment 4.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 100
Appendix A
1. NIMBY opposition needs to be anticipated and planning and outreach
should occur on the front end of projects. To mitigate defensive and
reactive responses, planning should include strategies for education,
outreach and marketing that provide accurate information and
promote the positive aspects and benefits of affordable housing to
build support among community residents.
2. Specific examples of prior actions by communities are listed in HUD's
Fair Housing Guide: Volume 2, pgs 7 -106 — 7 -110 and includes a
number of examples that communities have used to mitigate NIMBY
opposition. Generally communities should consider:
• Working with local officials, editorial boards, religious and civic
organizations and other community leaders to initiate education
programs.
• Seeking opportunities to present information to community
organizations by requesting to be placed on their meeting
agendas.
• Including a visit to the group home residence as part of an
education program.
• Answering all questions.
• Talking with local neighborhood leaders, including elected
representatives, and setting up a neighborhood meeting.
• Setting up a liaison committee consisting of advocates, group
residents, and neighborhood residents to discuss issues.
• Identifying areas that meet AFFH targets where the community
supports development, has worked with community groups and
potentially uses funds to assist the development of multi - family
affordable housing.
3. TDHCA should include in its regional allocation formula, factors
regarding the presence within jurisdictions of members of protected
classes, families of extremely low income, and opportunity indicators
including access to high - quality public education, concentration of
poverty, racial segregation, environmental quality, access to health
care, access to sustainable jobs, and crime rates as defined in rules
to be issued.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 101
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4. TDHCA should expand its relationship with the Texas A &M Real
Estate Center to assist in research projects as requested regarding
distribution of funds by TDHCA related to fair housing impacts.
5. Providing sufficient appropriations are available, or this is determined
to be eligible for federal funding, TDHCA and TDRA should provide
data to an institution of higher education in the state, with a
Geographic Information Services (GIS) database on the fund
distribution of federal housing and community development funds
from federally funded sources starting with information currently held
by the agencies that is readily accessible in electronic format. This
GIS system should be available to the public and to academic
researchers, state and local governments for purposes of assessing
the fair housing impact of government funding decisions utilizing
federal funds. If HUD develops similar technology within the action
step timeline date, there is no need to create a duplicate system, but
TDHCA and TDRA should provide information to HUD's system.
Public Sector Impediments.
Impediment #5. Certain governmental policies and practices may not meet
current HUD policy concerning affirmatively furthering fair housing.
Jurisdictions should act to ensure that their policies affirmatively further fair
housing, address mal- distribution of resources, and that they do not
unnecessarily impact housing choice.
Communities may have policies that may unintentionally fail to affirmatively
further fair housing. These can be reflected in a city's comprehensive plan,
capital improvement projects or zoning or subdivision ordinances. One of the
goals of this AI is to assist local officials with guidance on issues to review
prior to making the required certification of affirmatively furthering fair
housing when receiving HUD funds. Jurisdictions should ensure that their
practices do not promote concentrations of protected classes; that they are
affirmatively furthering fair housing; and that policies do not intentionally or
unintentionally preclude housing affordability or restrict accessibility to
housing for persons with disabilities.
One result of infrastructure issues can be the disproportionate presence of
members of protected classes in environmentally degraded or geographically
vulnerable locations which presents an impediment to equitable access to
disaster recovery programs and to fair housing choice. For example:
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 102
Appendix A
Some reconstructions in minority neighborhoods in Beaumont during the
Rita program were unable to pass environmental review for rebuilding
because of the proximity to a refinery.
Minority neighborhoods in disaster impacted areas in flood plains have been
prevented from accessing disaster rebuilding programs and denied disaster
recovery infrastructure funds to alleviate flooding due to local jurisdictions
decisions.
In fact, floodplains are an issue throughout the impacted region. People
living in floodplains should be assisted to address flooding danger to make
their home livable or the household should
be offered a voluntary relocation option. In the Valley and in selected areas
in Harris County, colonias with limited infrastructure and poor drainage
present a special problem based on the drainage /flood /levy system.
Communities should examine policies that prohibit flood control
improvements and assistance to households located in flood plains, as that
can be an impediment to relocating and therefore not allow for movement
and integration of neighborhoods using public funds. The lack of funds to
assist flood plain areas is different than limiting the rebuilding of homes in
floodways. In cases where entire communities are in the flood plain, the cost
of elevating could be an impediment that would need assistance with viable
solutions like additional dedicated funding caps to meet the cost of
compliance with floodplain requirements for elevation.
Recommended Action— Impediment 5.
1. As part of certifying that a community is affirmatively furthering fair
housing, jurisdictions that have long -term infrastructure plans should
review them to determine if the plan promotes racial concentrations
or otherwise inadvertently results in disparate treatment of members
of protected classes. While not intended to direct a community to
hire a consultant, it is anticipated that a community will review its
long term infrastructure plans as part of this recommended action. In
reviewing the project list in Appendix F there are many projects that
are listed as being of community -wide benefit. The records do not
indicate the actual location of the projects or provide adequate
discussion of how the projects benefit the entire community. Later
we will discuss record keeping as an impediment to AFFH
enforcement.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 103
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2. As it has been determined under federal law that Fair Housing applies
to all federal housing and community development funds, to reduce
silo -ing the fair housing component into only housing related
programs, fair housing should be considered in all activities for all
local community planning staff.
3. It would be beneficial for local elected officials to require senior staff
of any sub recipient such as a city or county — including managers
and attorneys —to receive available Fair Housing training within the
first 12 months of their employment or engagement.
4. As part of what is usually a common initial training by the
associations that provide education opportunities for newly appointed
board members or newly elected council or commissioners court
members of cities and counties, the state should request that training
include specific information on the Fair Housing Act —with a
discussion of affirmatively furthering fair housing obligations.
5. Local communities should consider limiting the concentration of
infrastructure improvements like waste water treatment, solid waste
disposal, or similar necessary but not desirable infrastructure
projects in residential areas where there are concentrations of
protected classes.
6. Communities electing to provide publicly financed housing incentives
should be requested to call for recipients to engage in affirmative
marketing.
7. If a jurisdiction is a non - entitlement community, when working in LMI
areas to replace roads or other infrastructure, the jurisdiction should
consider making application for additional sources of funding to
provide assistance to repair substandard housing associated with the
project (i.e., TDHCA or HUD).
8. Most infrastructure projects take into account items like curb cuts,
sidewalks, hearing and visually impaired indicators at intersections.
When approving non - federally funded projects, similar special needs
construction should be required for infrastructure improvements.
Projects should also address other legacy discrimination issues, such
as accessibility in public access areas like courthouses, community
centers and other high traffic areas.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 104
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9. Each jurisdiction applying for Community Development Block Grant
funds or other federal housing and community development funds
should submit a Fair Housing Activity Statement -Texas with their
application reviewing their infrastructure needs and housing needs
and how the proposed activity promotes fair housing or results in
more equitable treatment of protected classes. Projects with
community wide benefits should be accompanied by explicit
commitments on the part of the local jurisdictions to undertake
additional activities to affirmatively further fair housing along with a
monitoring and reporting process.
10. As part of the non - housing disaster recovery program, jurisdictions
should consider low- income areas and areas populated principally by
members of protected classes to determine the potential for flooding
and consider making infrastructure expenditures to help protect the
impacted communities — including colonias.
11. If applicable, all policies should be reviewed regarding denying
applicants access to disaster recovery CDBG funds if their residence
is located in the flood plain. If the policy does not allow participation
by restricting building in flood plains, then the policy should be
assessed to see if alternative housing programs could be
implemented for the residents. Local jurisdictions should analyze the
results and see if protected classes are more frequently harmed by
flood plain restrictions. This action does not apply to the TDRA CDBG
Disaster Relief Fund that limits property purchase — unless TXCDBG
receives satisfactory evidence that the property to be purchased was
not constructed or purchased by the current owner after the property
site location was officially mapped and included in a designated flood
plain.
12. When an entire community is in a flood plain, the community should
establish clear standards that allow for proper elevation, or relocation
and that also allows for visitability /special needs considerations
consistent with state and federal law.
13. Local jurisdictions that accommodated the relocation of disaster
survivors resulting in concentrations of protected class survivors in
specific areas should establish Moving to Opportunity Programs and
include renters in their Moving to Opportunity Programs as defined
under Round 2.
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14. Consistent with the process established in the conciliation agreement,
local jurisdictions and state agencies should work together to
determine a demographic and economic profile of victims of the
natural disaster and establish goals for assisting these populations in
no less that the proportions they were impacted by the disaster.
These goals should be performance goals and disaster recovery funds
should be extended incrementally in a manner to ensure that these
populations are equitably assisted with benefits.
15. All infrastructure programs funded with disaster recovery funds
should be designed in a manner such that any publicly accessible
infrastructure projects and associated facilities assisted by the
infrastructure program are fully accessible to persons with
disabilities.
16. Consistent with the Conciliation Agreement, family and elderly public
housing units damaged or destroyed by the disaster should be
reconstructed or repaired in a manner that affirmatively furthers fair
housing utilizing disaster recovery funds within 24 months of
approval of the initial application for disaster recovery assistance for
the local jurisdiction.
Impediment #6. Governmental entities at all levels do not appear to have
been proactive in the enforcement of both the Fair Housing Act and the
obligation to affirmatively further fair housing. The State and sub recipients
should implement a robust and effective structure for identifying and
pursuing suspected violations.
Outside of the information provided in Section 7 of this AI, it does not
appear that the state or local jurisdictions perform systematic testing to
determine if the Fair Housing Act is being implemented. To the extent that
private entities perform self testing the state would not know because of the
privileged status of self- testing and self correction provisions as provided for
under the Fair Housing Act. HUD itself has admitted that it has not fully
enforced the affirmatively furthering fair housing issues with jurisdictions.
With little enforcement by the public sector much of the Fair Housing Act
enforcement falls to private civil rights groups who also have inadequate
funding.
Many public and private agencies in the disaster area need more effective
fair housing referral processes that provide fair housing information and
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 106
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assistance to victims of illegal discrimination and disclose any prevalence of
housing discrimination. As with many laws, at least the potential for testing
and enforcement is necessary to obtain compliance.
Recommended Actions — Impediment 6.
1. Given the potential for increase in Fair Housing enforcement action by
federal and state agencies and private organizations, an ongoing fair
housing testing program for areas that receive federal housing and
community development funds could be beneficial to protect state
agencies and sub recipients from potential repayment. Fair housing
enforcement is a valid use of CDBG funding and can be used to
establish testing programs by agencies trained in HUD testing
procedures. The state, or local jurisdictions combining together, should
consider conducting tests in areas that include the following: steering
in sales and rental; the denial of and different terms and conditions
based on race, national origin, familial status, and disability in sales
and rental; predatory and disparate terms and conditions in lending
and insurance; and foreclosure modification schemes targeting
minority neighborhoods. The state should also consider education to
applicable entities on self testing and self correction.
2. TDHCA should, as a pilot program, allocate funds to independent third
parties or a combined jurisdiction team identified in point 1 of this
section to provide similar testing in the area to determine if additional
enforcement is necessary.
3. Impacted agencies that provide certification that they are affirmatively
furthering fair housing as required by federal law, should consider
publishing a public document on enforcement that provides the public
and communities with a clear description (and chart) of the state and
Federal Fair Housing Act.
4. Each community should place on its website (if one is available) the
contact , at the local, state and federal levels for reporting a Fair
Housing complaint, if citizens believe they were victims of housing
discrimination.
5. TDHCA and TDRA should seek to sign MOUs with the Texas Workforce
Commission to confirm the existing relationship between the agencies
if a Fair Housing complaint is made, binding the agencies to refer
alleged or suspected violations immediately for appropriate
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 107
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investigation and handling and to participate in the investigation if
requested by the victim.
6. TDHCA and TDRA should request their boards to include a discussion
of Fair Housing issues and trends at board education sessions at least
every two years as federal law requires the certification of
affirmatively furthering fair housing by the Board Chair when receiving
federal funds.
7. Given the issues identified in Section 7, the state and HUD should
work together to examine the fair housing complaint investigation
system and determine whether and where the shortfalls are in the
system. Once the review is completed, the parties should recommend
a joint plan of action to improve the complaint system.
8. Each local jurisdiction should publish on its website a clear statement,
approved jointly by TDRA and TDHCA, expressing the jurisdiction's
obligation to affirmatively further fair housing and providing a method
for reporting suspected noncompliance to the state and to HUD. The
jurisdiction's contact person should be able to refer to clear local Fair
Housing procedures for the complaint process, keep logs and records
of all inquiries, allegations, complaints and referrals. These reports
should be sent to the appropriate funding agency. Where these reports
show that a jurisdiction has administered programs inconsistently with
this AI and had the effect of discouraging applications from members
of protected classes who are deemed eligible under this plan for
assistance, affirmative marketing plans should be developed and
submitted to the appropriate agency.
Impediment #7. Many local jurisdictions have zoning codes, land use
controls, and administrative practices that may impede free housing choice
and fail to affirmatively further fair housing.
Local jurisdictions that place restrictions like minimum square footage
requirements, minimum lot sizes, special features like attached garages or
significant code requirements above the IRC or similar codes may have
created an impediment to fair housing choice. There is a difference between
affordable housing and Fair Housing and the restrictions should be assessed
to determine if they are a barrier for either.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 108
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Recommended Actions— Impediment 7.
1. Legal requirements, equlrements, Including local zoning ordinances and the like,
need to be directed to specific, legitimate, non - discriminatory
objectives and structured and administered in a manner consistent
with fair housing requirements.181 Communities are encouraged to
review zoning or other land use controls and analyze if they contribute
to fair housing barriers. TDRA, during recent AFFH trainings conducted
with Ike funding, has urged the review and improvement of zoning
ordinances etc. for all applicants. Twenty -eight applicants have already
included a commitment to this process for Round 2, Phase 2 funding.
2. The law anticipates that ordinances creating disparate impact should
also be reviewed for change.182 If a disparate impact is determined to
exist by the local jurisdiction, it could repeal or amend the restriction,
use public funds to offset the cost through homebuyer assistance
programs, a waiver of fees or other offsets to make the home more
affordable.
3. To help limit concentrations that could be considered impediments to
affirmatively furthering fair housing, jurisdictions that have long term
planning documents for housing growth or redevelopment or
revitalization plan, the jurisdiction should consider allowing or
encouraging mixed income affordable housing in the plan and provide
incentives for development of this type housing in areas that are not
concentrated.
4. Local jurisdictions seeking CDBG Disaster Recovery funds from the
state should consider offering expedited permitting and review
processes for affordable housing projects within high opportunity
target zones.
5. Likewise, the federal government should consider expediting
environmental and other federal reviews to expedite recovery in
disaster areas. To that extent, the federal government should establish
by rule that any environmental impact statement not denied within 30
days is deemed approved so as to speed recovery to protected classes.
Impediment #8. Inadequate planning for re- housing after an emergency
incident creates a situation where persons who are uninsured or under
insured, low- income, or special needs can be displaced for long periods of
time.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 109
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Re- housing immediately after a disaster is expected to be handled by FEMA.
The State examined issues discovered during evacuations for Hurricane Rita
and addressed the impediments to a safe and effective evacuation. The
plans made were effective for evacuation in Hurricanes Dolly and Ike. FEMA
still has significant issues in the short -term re- housing program.
There is sufficient evidence that protected classes under the Fair Housing Act
were disproportionately and adversely affected by the issue of duplication of
benefits following Hurricane Rita. Initial assistance after a disaster, whether
from FEMA, state agencies, or non - profit organizations, is given to assist
disaster victims with immediate needs such as shelter, food and medicine. In
long term recovery efforts, protected class homeowners are expected to
payback or provide detailed receipts for the initial assistance before
receiving long term recovery benefits, which will move them from damaged,
dilapidated housing to safe, decent and sanitary housing. This situation has
occurred throughout the disaster areas of Hurricane Ike and Dolly, and
applicants for long term recovery housing assistance, particularly those who
are members of protected classes under the Fair Housing Act, are
disproportionately represented in this issue. HUD should rewrite its rules so
that the initial assistance given after a disaster is not be considered a long
term recovery permanent benefit for the protected classes but is considered
a temporary mitigation measure to provide survival needs to the
homeowner. The current impediment is that protected classes, who own
their own homes, may have no long term decent, safe and sanitary housing
due to their inability to pay back or account for temporary disaster
assistance they received, often times years ago.
Following Hurricane Dolly in July 2008, FEMA denied half of all applications
for housing assistance, alleging "deferred maintenance." FEMA has refused
to disclose the rules and standards by which it makes these eligibility
decisions, or even to provide a definition of "deferred maintenance ", which is
not an official denial code. There is ongoing litigation in the United States
District Court for the Southern District of Texas over FEMA's failure to
publish its standards and procedures in violation of the Stafford Act. These
denials may have had a disproportionate impact on low- income households
and members of protected classes.
FEMA also denied at least 85 percent of claims for housing assistance in
Texas after Hurricane Ike. Although some applications were denied for
reasons as minor as an omitted middle initial, the most common denial code
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 110
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used (in over 100,000 cases) was "insufficient damage," particularly in low-
income households and neighborhoods. Many low- income applicants have
been told informally by FEMA that their "insufficient damage" denials were
actually based on deferred maintenance.
FEMA may have denied many of these applicants unfairly and erroneously.
After Hurricane Katrina, the City of Houston sent its own housing inspectors
to New Orleans in May 2006 and determined that two - thirds of FEMA's
habitability determinations were suspect or wrong. The City of Houston
believes there were similar problems with housing assistance denials after
Hurricane Ike, but the solution that a family deemed ineligible may appeal
their determination is not realistic. Examples of erroneous housing
assistance denials following Hurricane Ike include: declaring homes habitable
that have been condemned by city cit officials , by declared unsafe b Child
Protective Services, and that are inaccessible to individuals with disabilities.
Non - profit groups in Houston report entire neighborhoods of damaged
homes that have been deemed to have "insufficient damage" largely in low -
income and traditionally minority areas.
The emergency and interim disaster relief that FEMA provides has a strong
impact on the ability of both individuals and communities to achieve long-
term recovery from a disaster. Homes that are not repaired to safe and
sanitary condition following a disaster continue to deteriorate, resulting in
higher costs to repair and rebuild these homes and as HUD's own research
has demonstrated, increasing the cost and difficulty of recovery for entire
neighborhoods and communities.
Recommended Actions — Impediment 8.
1. Some legislators, the Sunset Commission, and communities
acknowledge that while temporary disaster housing is a federal
program, Texas should continue to provide guidance to local
governments on additional planning that needs to be done as part of
the emergency preparedness planning to most efficiently work with
FEMA.
2. As much of what FEMA has previously offered is travel trailers or
manufactured housing, local governments should review their zoning
requirements or other land use provisions that restrict temporary
housing or housing on an existing lot during the building process and
look at potential waivers that do not risk or negatively impact health,
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 111
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safety, and welfare during a period after disasters so that low income
persons can move back to their existing communities with temporary
housing while waiting for redevelopment.
3. As part of their disaster preparedness plans, local communities should
work with the Texas Department of Emergency Management (TDEM),
their respective local emergency management departments, and
TDHCA to establish temporary housing plans prior to storms to provide
rapid deployment of housing into communities where disasters could
happen.
4. TDHCA should work with TDEM to update TDEM's Emergency
Management Plan to develop a major natural disaster housing
reconstruction best practices guide no later than January 2012 to
ensure that housing is restored fairly and equitably to members of
protected classes in the wake of future major disasters.
5. Federal duplication of benefit interpretations impacts need to be
included as a planning point in any disaster recovery plan so that low -
income persons will be eligible for disaster recovery funds in the long
term recovery program. The State, sub recipients, and advocates
should join together in requesting HUD to provide a less draconian
interpretation of the Duplication of Benefits.
6. TDHCA should monitor the Homeowner Opportunity Program to
determine its success at providing mobility options for individuals or
families from high concentrations of minorities and poverty and flood
plains with the first monitoring assessment coming not later than
January 2012. At the end of the program, TDHCA and its sub
recipients should review the success of the program and evaluate its
effectiveness for future planning in the event of disaster programs.
7. The disparate impact of lack of clear title on protected classes should
be included as a planning point in any disaster recovery plan so that
low- income persons will be eligible for long -term disaster recovery
funds. Advocates commit to working with law schools to provide free
assistance to determining title.
Impediment #9. There are impediments in public and private actions and
private attitudes to housing choice for persons with disabilities.
The Fair Housing Act accords persons with disabilities the right to live in
communities regardless of the disability. A difference of opinion exists on
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 112
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whether boarding houses (group homes) should be used for some persons
rather than integrating persons with special needs into traditional housing
resources. But, to the extent that this form of housing is beneficial to
persons with special needs, in the Hurricane impacted areas the research to
develop this AI found no direct regulations in place that restrict the
homes.190 However, it does appear that there may be incidences of indirect
regulation in the form of zoning restrictions, food service permitting and
other local ordinance making it difficult to site these homes in all residential
areas of these communities. One potential ordinance that could have a
negative impact on these special needs facilities are restrictions that prohibit
a certain number of non - related occupants from sharing the same residence.
Recommended Actions — Impediment 9.
1. To meet federal Fair Housing requirements for zoning and
neighborhood uses, jurisdictions should look to determine if there are
direct or indirect limitations in codes that would prevent facilities or
personal residences to provide assistance or communities of choice or
service enriched environments that directly impact special needs
persons.
2. Local jurisdictions should work to ensure that zoning or code
requirements do not unnecessarily impose stricter commercial building
requirements, such as emergency access or protection services, on
group homes, thereby dramatically increasing housing costs for
persons with special needs.
3. Local jurisdictions should consider coordinating with the legislatively
created Housing and Health Services Coordination Council for best
practices on working with supportive services.
4. Within six months of this AI being approved, each COG should convene
a community board composed of persons with special needs, advocacy
organizations and local jurisdictions to advise the COG on priorities
and needs for housing persons with special needs,
Impediment #10. There are barriers to mobility and free housing choice
for Housing Choice Voucher holders including: inadequate tenant counseling
services and mobility assistance, failure of PHAs to apply for the FMR pilot
demonstration, and government policies, procedures, and regulations that
tend to decrease participation by private housing providers and to restrict
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 113
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available housing to — racially or low- income populated neighborhoods with
little access to economic, educational, or other opportunity.
Texas has a higher than average poverty rate, resulting in a higher than
average demand for affordable housing and housing assistance. As discussed
in this AI, there is a waiting list in every impacted region for public housing
or Section 8 vouchers. Concentration of public housing may be a problem in
some communities, but lack of availability is universal. Hurricanes Rita and
Ike damaged many units and they have been slow to rebuild.
Recommended Actions — Impediment 10.
1. Consistent with the Conciliation Agreement, when using Hurricane Ike
funds, local communities should place Land Use Restriction
Amendments requiring acceptance of Section 8 vouchers on multi-
family developments or any single developer who rebuilds more than
20 units with public funds. This should increase the housing availability
for Fair Housing purposes.
2. Consistent with the Conciliation Agreement, the State of Texas, the
Deep East Texas Council of Governments, the Houston - Galveston Area
Council, the Lower Rio Grande Valley Development Council, and the
Southeast Texas Regional Planning Commission should join with
housing advocacy groups to request an additional 2,500 vouchers for
the hurricane impacted communities. If granted and if sufficient
resources are appropriated, TDHCA should support the vouchers with
up to one million dollars a year in assistance for relocation from state
funds to the best of TDHCA's ability.
3. Concurrent with the existing State Low Income Housing Plan, the State
of Texas and local jurisdictions should work with housing advocacy
groups, demographers and academic experts to conduct research on
the need for rent subsidies for very low and extremely low income
households.
4. Local jurisdictions and TDHCA should cooperate with local public
housing authorities to establish tenant counseling and fair housing
education programs and curriculum that can be provided to each
Section 8 housing choice voucher holder within the affected region on
a biannual basis concurrent with eligibility recertification.
5. A HUD map included as Appendix B and contains information of the
geographic distribution of Section 8 Housing Choice Vouchers is
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 114
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intended to be used as a research tool by the state and local
jurisdictions in looking at the success of Section 8 programs and the
mobility the program provides.
6. TDHCA should inform local PHA's of FMR pilot demonstration programs
that could be used in their areas to expand fair housing choices.
Impediment #11. Loss of housing stock in Hurricanes Dolly and Ike
compounded the shortage of affordable housing in disaster recovery areas.
This shortage is particularly acute in safe, low poverty neighborhoods with
access to standard public services, job opportunities and good schools.
One of the largest impediments to fair housing choice is the lack of safe,
decent, and affordable housing in the hurricane impacted area. Prior to the
hurricanes, there was a shortage of affordable housing and the damage
caused by the disasters further reduced available affordable housing. Limited
state and federal resources were directed to rebuild damaged housing
instead of adding new housing.
Programs funded by Texas that create affordable housing should maintain
better records to demonstrate they are sufficient to assure that the projects
will affirmatively further fair housing.
Recommended Actions — Impediment 11.
1. Current economic conditions and the housing bubble burst have
greatly slowed the development process unless it is funded with public
funds or insurance proceeds. TDHCA through Hurricane Rita disaster
recovery funds was one of the largest financing organizations for new
homes in the state the last three years working with their COG
partners to build more than 3,000 homes. TDHCA and TDRA are
working to provide the greatest efficiencies possible and meet the
affirmatively furthering fair housing requirements, including added
costs of the state's accessibility standards.
2. To help offset the costs of developments that feature reduced rents
without government support, local jurisdictions should consider
establishing density bonuses to allow for higher levels of units per site
for multifamily developments and single - family developments that
propose increased affordability.
3. TDHCA and HUD have developed programs that preserve affordable
housing. Continuing in this vein, the state and local jurisdictions should
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 115
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work to preserve existing affordable housing development and
discourage them from converting to market rate housing.
Requirements should be included in all publicly funded developments
providing tenants with early and clear notification of the intention of
management to convert to market rate housing and providing first
right of refusal to nonprofit and public entities and organizations to
purchase units to maintain affordability.
4. The state should consider adopting incentive structures in their
programs to encourage local jurisdictions to identify needs and to set
priorities for fair housing and community development.
5. The state and local jurisdictions should consider using CDBG funds to
buy down the cost of land in high -cost and high- opportunity
development areas to increase affordable housing options in these
areas.
Impediment #12. Lack of financial resources for both individuals and
housing providers limits Fair Housing choice. Using an effective program
under Section 3 of the Housing and Urban Development Act of 1968 may
help members of protected classes gain economic opportunities necessary to
allow them to exercise fair housing choice.
No list of impediments to Fair Housing would be complete without discussing
the lack of financial resources for providers and families. Despite the fact
that Texas has a lower unemployment rate than the national average, many
Texans are unemployed or underemployed making it difficult to afford
housing, or if they are in housing the relative cost of housing to wages
creates a Housing Burden as discussed it Section 2 (of the State Phase 1
A.I.). In addition the subprime markets and aggressive posture for
homeownership have resulted in foreclosures.
The hurricanes and the economy have also hit hard the economies of the
local communities and the State of Texas through reduced revenues from
property taxes at the local level and sales taxes at both levels, resulting in
less local and state funding available to assist persons needing additional
help. That leaves federal help in the case of Hurricanes Rita, Ike and Dolly
the state received less than 25 percent of its identified need in disaster
recovery funds.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 116
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Recommended Actions — Impediment 12.
1. The state is maximizing its resources in Round 2 of the Ike /Dolly
funding to affirmatively further fair housing in single family and multi-
family developments. As called for in the Conciliation Agreement, the
state is looking to provide more integrated housing options for persons
in racially concentrated or poverty concentrated neighborhood groups.
In single - family programs, the state should require sub recipients to
offer the opportunity to relocate out of floodplain areas, concentrations
of racial minorities, or concentrations of poverty— through the
Homeowner Opportunity Program. Any relocation should be into an
area that does not result in simply relocating the high- concentration
from one area to another.
2. Although general revenue funds are extremely tight and increased
funding by the 83rd Texas Legislature is highly doubtful, TDHCA has
asked for a continued commitment by the legislature to a Housing
Trust Fund appropriation of state dollars to assist in the voucher
relocation program.
3. Jurisdictions receiving federal funds from HUD, directly or indirectly,
should ensure they have a compliant Section 3 program to meet HUD
requirements regarding notification to LMI eligible persons of potential
job creation at the impacted neighborhood level with federal funds.
4. TDHCA and TDRA, using existing resources, should continue to develop
and review best practices for Section 3 within their respective agencies
and should include training on this topic as part of the regular training
it provides or arranges.
5. TDRA and TDHCA should provide training materials to organizations
that typically provide training to elected officials, public officials, any
third party consultants, or subcontractors administering or playing any
role in the administration of CDBG or other HUD federal housing or
community development funds complete a fair housing act training
seminar, including affirmatively furthering fair housing, prior to
application submission.
Impediment #13. Location and lack of housing accessibility and visitability
standards within political jurisdictions limits fair housing choice for persons
with disabilities.
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Often the only housing available for a person with special needs is a facility
specifically designed for them and every unit within that facility is designed
for that function. Where this is not the case it can be difficult to find units
that have the accessibility features. TDHCA has addressed this by adopting
the Integrated Housing Rule at 10 TAC 1.15 that requires that in TDHCA
funded developments not more than 18 percent of units in large
developments and not more than 36 percent of units in small developments
should be occupied by persons with special needs.
The difficulty of commuting to medical facilities especially impacts persons
with special needs to a greater degree than others. The state and
communities should consider the distance between the new residential
communities it builds and proximity of services for persons with special
needs. This would also be convenient for elderly persons.
Recommended Actions — Impediment 13.
1. Local jurisdictions should consider establishing incentives for
affordable housing applicants to create an increased set -aside of
housing units for persons with disabilities or persons who are elderly
without violating the existing TDHCA integrated housing rule.
2. To assist local communities in assisting service - enriched housing as
defined by TDHCA rules, TDHCA should consider language in TDHCA's
Housing Trust Fund Plan which assigns an additional priority to the
development of service - enriched housing apart from the dedicated
programs for special needs.
3. TDHCA should review modifications of the multifamily bond program
rules to support the development of service - enriched housing.
4. To the extent allowed by law, TDHCA should explore collaboration with
the national Disability Opportunity Fund to bring funding opportunities
to Texas to help communities with additional special needs funding.
5. TDHCA and TDRA should explore how state Community Development
Block Grant (CDBG) funding allocations can be used to address the
service - enriched housing needs of rural communities. The TDRA CDBG
Action Plan encourages a portion of the annual federal allocation be
used towards affordable housing development in any region under its
existing programs.
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6. TDHCA and local jurisdictions should consider adding proximity to
medical facilities as a scoring incentive for competitive programs using
federal funds for proximity to medical facilities.
7. TDHCA should require that all federally funded housing construction be
built to accessibility standards found in Texas Government Code
§2306.514.
Impediment #14. Many colonias residents live in developments that have
insufficient infrastructure and protections against flooding and are impacted
by flooding beyond events like Hurricanes Dolly and Ike. There are ongoing
issues of the basic livability in colonias areas. The importance of
infrastructure is exposed during flooding, attempted access by vehicles, the
lack of potable water, and lack of wastewater services. All of these are areas
of critical concern in colonias communities that should be discussed in
greater detail at every level. Although the state had invested almost half a
billion dollars of primarily federal funding into colonias improvements as of
2007, much of which was aimed at providing these basic infrastructure
services necessary for housing development /redevelopment to take place,
more work needs to be done. The state should better coordinate the colonias
programs currently fragmented in numerous state agencies to better
address the issues and more efficiently use tax dollars.
Recommended Action — Impediment 14.
The state, COGs, and local jurisdictions should examine the infrastructure
needs in colonias, in particular the use of CDBG disaster recovery funds to
provide drainage improvements to correct flooding problems in the wake of
Hurricane Dolly, and the historical provision of public infrastructure and
housing assistance to meet those needs in border and non - border colonias.
Impediment #15. Minority neighborhoods in disaster areas are primarily
served by non - regulated insurance companies that do not adhere to
underwriting guidelines and may be discriminated against in the provision of
insurance. Texas has passed aggressive statutes to prevent insurance
redlining. National research indicates that protected classes face
unwarranted disparities in the cost of insurance, the amount of coverage,
and cancellation of policies without notice to the homeowner.
As part of new home construction using federal funds, insurance must be
maintained on the home to be eligible for future federal funds in the event of
another disaster. The cost of the insurance is expensive and due to lack of
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Appendix A
availability and limited funds, homeowners may not maintain insurance after
the compliance period, putting the federal resources in jeopardy.
Recommended Action — Impediment 15.
1. Within the current Homebuyer counseling programs connected with
federally- funded and state - operated programs, TDHCA should include
a component on the types of property insurance and dealing with the
insurance claims process.
Impediment #16. Many jurisdictions do not have adequate Analysis of
Impediments to Fair Housing or Fair Housing Plans, and do not keep
sufficient records of their activities.
There is a need to update AIs when the new guidance from HUD is received
to meet the new expectations for compliance with affirmatively furthering
fair housing. Appendix F (State A.I.) is a collection of data from numerous
entities in the impacted areas that receive and / or use federal funds
(generally only FEMA, HUD and state of Texas funds were requested) to
provide a list of activities where those federal funds were used. It should be
noted that local jurisdictions were asked to provide the data in a specific
format and were given only two weeks to provide seven years of records. In
analyzing the list, it is clear there is not a standard for reporting or recording
this information to be able to determine if the funds were used to
affirmatively further fair housing. This impediment is related to Impediment
5 in this document.
Recommended Action — Impediment 16.
1. TDHCA and TDRA should continue Fair Housing training already
underway to all impacted area sub recipients (regardless of the agency
administering a particular program) regarding their obligations to
affirmatively further fair housing, how to plan for AFFH, and how to
use planning to direct housing, infrastructure, and economic
development activities.
2. TDHCA and TDRA should work together to develop a plan for continued
regular training and to incorporate fair housing into ongoing training
activities in the impacted area.
3. As TDHCA and TDRA have to comply with the Conciliation Agreement,
the agencies should continue to provide a continued fair housing
resource to provide technical assistance with planning to AFFH,
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Appendix A
incorporate the findings of the Disaster -Area and new Statewide AIs,
and combat potential discriminatory practices. This may be of
particular importance for jurisdictions conducting non - housing
activities and it is particularly recommended that TDRA continue to use
the services of an independent fair housing consultant at least until the
obligation of all Round 2 funds has taken place.
4. Recipients of CDBG funds from HUD for housing should maintain
records as required by the Fair Housing Act, HUD regulations, and the
Conciliation Agreement in order to document that they are carrying out
their Fair Housing Action Plans and affirmatively furthering fair
housing.
5. As required under the Conciliation Agreement, the State will conduct a
new Statewide AI after HUD approval of this Phase 1 AI. Entitlement
communities should conduct new AIs or update current AIs to ensure
that they address all recommended data and issues and specifically
address issues related to all protected classes under the Fair Housing
Act. Race and national origin, as well as the other protected classes,
must be identified independent of low and moderate - income categories
in order to understand the impact of actions, practices, regulations,
ordinances, and other factors on them.
6. To assist them in meeting their requirements to certify that it is
affirmatively furthering fair housing, TDHCA and TDRA should include
as part of its regular training, information on record keeping needed to
meet the terms of the Conciliation Agreement and analysis of
programs to identify impediments to fair housing.
7. Agencies using federal CDBG or other federal housing and community
development funds should adopt a FHAST Form for use by sub
recipients that offers a standardized method for analyzing, monitoring
and ensuring compliance with obligations to affirmatively further fair
housing.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 121
Appendix B
Appendix B
Texas Fair Housing Act
The Fair Housing Act /Texas Fair Housing Act (TFHA) prohibits discrimination
in housing because of:
• Race
• Religion
• Color
• Sex
• National Origin
• Disability
• Familial status (including children under the age of 18 living with
parents or legal custodians; pregnant women and people securing
custody of children under 18).
WHAT HOUSING IS COVERED?
The Fair Housing /TFHA covers most housing. In some circumstances, the Act
exempts owner - occupied buildings with no more than four units, single -
family housing sold or rented without the use of a broker and housing
operated by organizations and private clubs that limit occupancy to
members. 19
WHAT IS PROHIBITED?
In the Sale and Rental of Housing.
No one may take any of the following actions based on race, religion, color,
sex, national origin, disability or familial status:
• Refuse to rent or sell housing
• Refuse to negotiate for housing
• Make housing unavailable
• Deny a dwelling
• Set different terms, conditions or privileges for sale or rental of a
dwelling
19 TWCCRD Web Page
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 122
Appendix B
• Provide different housing services or facilities
• Falsely deny that housing is available for inspection, sale or rental
• For profit, persuade owners to sell or rent (blockbusting) or
• Deny anyone access to or membership in a facility or service (such as
a multiple listing service) related to the sale or rental of housing
In Mortgage Lending:
No one may take any of the following actions based on race, religion, color,
sex, national origin, disability or familial status:
• Refuse to make a mortgage loan
• Refuse to provide information regarding loans
• Impose different terms or conditions on a loan, such as different
interest rates, points, or fees.
• Discriminate in appraising property
• Refuse to purchase a loan or
• Set different terms of conditions for purchasing a loan
It is illegal for anyone to:
• Threaten, coerce, intimidate or interfere with anyone exercising a fair
housing right or assisting others who exercise that right.
• Advertise or make any statement that indicates a limitation or
preference based on race, religion, color, sex, national origin,
disability, or familial status. This prohibition against discriminatory
advertising applies to single - family and owner - occupied housing that is
otherwise exempt from the Fair Housing Act.
Do You HAVE A DISABILITY?
If you or someone associated with you:
• Have a physical or mental disability that substantially limits one or
more major life activities
• Have a record of such a disability or
• Are regarded as having such a disability
Your landlord may not:
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Appendix B
• Refuse to let you make reasonable modifications to your dwelling or
common use areas, at your expense, if necessary for the disabled
person to use the housing. (Where reasonable, the landlord may
permit changes only if you agree to restore the property to its original
condition when you move).
Example: An apartment complex that offers tenants ample,
unassigned parking must honor a request from a mobility- impaired
tenant for a reserved space near their apartment if necessary to
assure that they can have access to the unit.
• Refuse to make reasonable accommodations in rules, policies,
practices or services if necessary for the disabled person to use the
housing
Example: A building with a no pets" policy must allow a visually
impaired tenant to keep a guide dog.
Requirements for New Buildings:
In buildings that were ready for first occupancy after March 13, 1991, and
have an elevator or four or more units:
• Public and common areas must be accessible to persons with
disabilities
• Doors and hallways must be wide enough for wheelchairs
All units must have:
• An accessible route into and through the unit
• Accessible light switches, electrical outlets, thermostats and other
environmental controls
• Reinforced bathroom walls to allow later installation of grab bars and
• Kitchen and bathrooms that can be used by people in wheelchairs.
In buildings with four or more units and no elevator, that were ready for first
occupancy after March 13, 1991, these standards apply to ground floor
units.
HOUSING OPPORTUNITIES FOR FAMILIES:
Unless a building or community qualifies as housing for older persons, it may
not discriminate based on familial status. That is, it may not discriminate
against families in which one or more children under 18 live with:
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 124
Appendix B
• A parent
• A person who has legal custody of the child or children or
• The designees of the parent or legal custodian, with parent or
custodians written permission.
Familial status protection also applies to pregnant women and anyone
securing legal custody of a child under 18.
Exemption: Housing for older persons is exempt from the prohibition
against familial status discrimination if:
• It has been determined that it is specifically designed for and occupied
by elderly persons under a Federal, State or local government program
or
• It is occupied solely by persons who are 62 or older or
• It houses at least one person who is 55 or older in at least 80 percent
of the occupied units, and adheres to a policy that demonstrates intent
to house persons who are 55 or older.
• A transition period permits residents on or before September 13, 1988
to continue living in the housing, regardless of their age, without
interfering with the exemption.
IF You THINK YOUR RIGHTS HAVE BEEN VIOLATED:
The Texas Workforce Commission Civil Rights Division (TWCCRD) is ready to
help with any problem of housing discrimination. If you think your rights
have been violated, you may write a letter or telephone the TWCCRD. You
have one year after an alleged violation to file a complaint but you should
file it as soon as possible.
What to Tell TWCCRD
• Your name and address
• The name and address of the person your complaint is against (the
Respondent)
• The address or other identification of the housing involved
• A short description of the alleged violation (the event that caused you
to believe your rights were violated)
• The date(s) of the alleged violation
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 125
Appendix B
If You Are Disabled:
TWCCRD also provides:
• A TTY phone for the deaf /hearing impaired users; 1 (512) 371 -7473
• Assistance in reading and completing forms
What Happens When You File A Complaint?
TWCCRD will notify you when it receives your complaint. TWCCRD will also:
• Notify the alleged violator of your complaint and permit that person to
submit a response
• Investigate your complaint and determine whether there is reasonable
cause to believe the law had been violated
Conciliation: The TWCCRD will try to reach an agreement with the person
your complaint is against (the Respondent). A conciliation agreement must
protect both you and the public interest. If an agreement is signed the
TWCCRD will take no further action on your complaint unless the TWCCRD
has reasonable cause to believe that the conciliation agreement has been
breached. The TWCCRD may then recommend that the Texas Attorney
General file suit.
What Happens After A Complaint Investigation 2
If, after investigating your complaint, the TWCCRD finds reasonable cause to
believe that discrimination occurred, it will inform you. Additionally your
complaint will be referred to the TWCCRD's office of General Council for
additional action(s).
If, after investigating your complaint, the TWCCRD finds no reasonable
cause to believe the law had been violated you will be notified in writing.
Additionally, you will be informed of your right to file suit at your expense, in
Federal or State District Court within two years of the alleged violation.
"Disclaimer" for Fair Housing Initiatives Program (FHIP) Agencies
"The work t provi t b asis f or t publication was supported by
funding under a Grant with the U.S. Department of Housing and Urban
Development. The substance and findings of the work are dedicated to the
public. The author and publisher are solely responsible for the accuracy of
the statements and interpretations contained in this publication. Such
interpretations do not necessarily reflect the views of the Federal
Government."
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 126
Appendix B
In order to ensure the prevention and elimination of housing discrimination,
HUD requires all governing authorities directly receiving Consolidated Plan
Program funds to certify that the community, consortium or state will
"affirmatively further Fair Housing" within their jurisdictions. This
requirement is codified in the Consolidated Plan requirements under 24 CFR
91.225. Public agency obligations under the Act may be grouped into three
categories:
Intent: The obligation to avoid policies, customs, practices, or processes
whose intent or purpose is to impede, infringe, or deny the exercise of fair
housing rights by persons protected under the Act.
Effect: The obligation to avoid policies, customs, practices, or processes
whose effect or impact is to impede, infringe, or deny the exercise of Fair
Housing rights by persons protected under the Act.
Affirmative Duties: The Act imposes a fiduciary responsibility upon public
agencies to anticipate policies, customs, practices, or processes that
previously, currently, or may potentially impede, infringe, or deny the
exercise of Fair Housing rights by persons protected under the Act.
The first two obligations pertain to public agency operations and
administration, including those of employees and agents, while the third
obligation extends to private as well as public sector activity. In light of the
recent, ground breaking Court decision regarding a class action Suit (United
States Southern District Court of New York, USA ex rel. Anti - Discrimination
Center of Metro New York, Inc., Plaintiffs against Westchester County, New
York, Defendant) where basically the County's A.I. Certification and other
actions, or lack thereof, were called to task and failed to show any anti -
discriminatory results. In addition, a similar action has occurred with the
State here in Texas where a Conciliation Agreement has been executed
regarding the Disaster Community Development Projects, including Port
Arthur. This A.I. includes the Phase 1 State A.I. actions that cover Port
Arthur Disaster Projects.
The Port Arthur Fair Housing Analysis of Impediments discusses the results
of earlier analyses of impediments and the steps the City intends to take to
implement policies that will prevent and eliminate housing discrimination in
the City.
City of Port Arthur, Texas: Analysis of Impediments to Fair Housing Page 127