Three Part Series by The County Gin

The Wharton ISD fought hard for almost two years to win this Community Development Block Grant (CDBG), which was competed against other communities where housing was severely impacted by Hurricane Harvey, so the WISD could provide housing for District staff. 

The reason that I’m working so hard to get accurate information out to you, is because on March 24th the WISD Board of Trustees have an opportunity to vote to determine the fate of the Community Development Block Grant and whether to leverage it to bring 34 new homes to Wharton or walk away from the $8.75M grant. If they vote to allow my company A2J Holdings to purchase the 500 Abel Street property and take assignment of the grant, Wharton will be able to harness the economic advantages these homes will provide to not only those who reside in them, but to the entire community. Otherwise, the money will go to Fort Bend County for them to get the housing and associated economic benefits.

Hopefully I have your attention, and I encourage you to continue reading if you have any interest in:

1. Helping local business survive - and grow. I noticed K&D Design Boutique recently closed on Milam Street, just another casualty of the local economy affected by the exodus after Hurricane Harvey. Since 2017 over 250 residents departed Wharton and have not returned. Reversing that trend and bringing residents back to the community will bring revenue to the local economy and benefit local business owners. Specifically, over $1,034,000 in non-housing expenditures will be generated by the 34 units of housing. Each year. Imagine a $10+ million surge to local businesses over the next 10 years. 

2. Helping to improve Wharton ISD. Many of the families living in the 34 units of housing will have children attending WISD. For each student enrolled the State funds $6,140 each year to the District.  Since Hurricane Harvey the WISD enrollment has dropped by 225 students, which is a loss $1,381,500 annually. If this new housing is built, the WISD annual operating budget will increase and help improve its mission of education.

3. Improving the City of Wharton infrastructure. Every resident of Wharton will benefit from the tax dollars the City will receive each year, if the property is developed by a private firm. The tax revenue is estimated to exceed $100,000 each year, paid to the City. Imagine better roads, improved sidewalks, infrastructure, parks and recreation for all citizens to enjoy.

4. Bringing high quality, energy efficient housing to the community. I have been contacted by many interested in the prospect of new housing, all seeking information how to apply. More details on that process follow below. 

I believe we should save the Hopper Elementary School building. 

Me too! I am personally interested in preserving the existing building for adaptive reuse under the terms and budget of the $8.75M grant. 

We agree Wharton needs new housing, but it should be built somewhere else. 

Unfortunately, the rules governing the grant do not allow a site change. This request has been made to the State and they have confirmed that it is absolutely not allowed. If the WISD does not use the $8.75M grant to build homes on this site, the money will go to the next application in line to build housing in Fort Bend County. 

There isn’t enough room on the site to keep the existing building and build houses. 

If the existing school building is able to be retained for adaptive reuse to accommodate residential units, the interior units would logically be apartments. Based on the size of the building, additional houses would need to be built to produce the 34 units required for the $8.75M grant award. The site has been analyzed by a nationally renowned planning firm and is large enough to accommodate both the existing building and a mix of one, two and three-bedroom free standing homes that will blend beautifully with the architecture of the existing neighborhood. The houses A2J would build will look similar to the image in the upper left corner of this page.  (Photo Credit: PlaceMakers, LLC)

The story keeps changing about who gets to live in these houses. First it was for teachers, and now you’re saying it’s for veterans or first responders. 

The WISD submitted the grant application in 2018 with the intention of building housing for district staff. If A2J takes assignment of the grant, A2J will be the owner and will determine what federally allowed “Owner Adopted Preferences” will be used as criteria for ranking/rating how tenants are selected from the pool of submitted applications. Because the WISD’s hard work won the grant, A2J intends to honor the prioritization of District staff. However, as a veteran, I also intend to expand the preferred tenant selection criteria to include active military and veterans, in addition to EMT/first responders, seniors, individuals and families still displaced from Harvey, and the employees of local employers like Wharton County Junior College, HEB, Nan Ya, JM Eagle, and Oak Bend Medical Center.  

But you’re not allowed to reserve these houses, they have to be made available to anyone that wants to live there. 

While it is accurate that we can’t “reserve” or “hold” houses for members of a specific group, we do not have to accept tenants on a first-come-first-serve basis. “Owner Adopted Preferences” for tenant selection are absolutely allowed by the federal government.  Owners are also permitted to establish written screening criteria to determine whether applicants will be suitable tenants, and to confirm if the applicant has the ability to pay rent on time and meet the requirements of the lease. As part of the rental application process A2J will require 100% of perspective tenants to show proof of employment and go through an income verification process. A typical standard in establishing income requirements is for rent + utilities < 30% of household income. Using that formula, this table shows the minimum income by unit size for the 18 income-capped homes.  

# Bedrooms     Max Rent        Minimum Income

1 Bedroom           $593             $1,977/Month = $23,720/Annual

2 Bedroom           $690             $2,300/Month = $27,600/Annual

3 Bedroom           $900             $3,000/Month = $36,000/Annual

You can read more about occupancy requirements and procedures governing this grant-funded multifamily housing program in the HUD Handbook 4350.3. 

But don't we have plenty of houses available to rent in Wharton? 

Based on data collected during the City-adopted 2018 Comprehensive Plan, it was documented that “approximately 1/3 of the city’s housing stock is in substandard condition (i.e. deteriorating or dilapidated condition). In addition, nearly all substandard homes are occupied (92%).” According to the most recent US Census data, 51.6% of Wharton residents are renters. Of Wharton’s 3,962 total residential units, only 17 units were available for rent. Additionally, employers submitted documentation that of the 4,921 people working in Wharton, 27.3% drive more than 50 miles from their home to come to work in Wharton. Based on the data, there is unquestionably a massive shortage of high-quality rental units.

Jobs by Distance - Work Census Block to Home Census Block | 2017 Census Data

                                                 Count       Share

Total All Jobs                            4,921        100%

Less than 10 Miles                  1,610         32.7%

10 to 24 Miles                             975         19.8%

25 to 50 Miles                             994         20.2%

Greater than 50 Miles         1,342         27.3%

We don’t want more Section 8 housing. 

This is not Section 8 housing. The State designed this Community Development Block Grant program specifically to fund the construction of rental units to serve working class families struggling in the aftermath of Harvey. MODERATE income earners make up 67% of the people that work in Wharton, as confirmed by the Census data. 

                         Earnings | 2017 Census Data      

                                                        Count       Share

$1,250 per month or less            1,629        33.1%

$1,251 to $3,333 per month       1,675        34.0%

More than $3,333 per month     1,617        32.9%

18 of the 34 units will be reserved for individuals and families that earn less than 80% of the Median Family Income (“MFI”) for Wharton County, which is $58,500. The table below summarizes the Income Limit Cap on these 18 homes:

# of People in Home:             1                  2                  3                  4                  5

Annual Income Cap:      $32,900      $37,600      $42,300      $46,950      $50,750

Monthly Income:              $2,742        $3,133        $3,525         $3,913        $4,229

Wharton would have a greater benefit from the school building being owned by a non-profit organization that will host other non-profits needing space. 

I am a passionate supporter of the critical role that non-profits play in communities, which is why I hope to be able to design the site so there is space for community-centric services within the development.  Following are a few benefits the WISD, the City, and the community will recognize by selling the property to A2J: 

- The WISD will receive significant cash for the sale of a deteriorated building which has been abandoned for over 10 years.

- The WISD will ‘be out of the housing business’ as many in the community seem to prefer. 

- Hopper will be owned by a company with the expertise to assess the feasibility of retaining the existing building and the financial resources to not only restore it, but to operate and maintain it for decades to come. 

- 34 families will get brand new, energy efficient homes.

- More affordable rents for people living a walkable distance to downtown will mean that families spending less of their income on housing, will have more money for entertainment, dining and shopping.

- The City will finally be able to start collecting property taxes estimated at over $100,000 annually which can go towards improving streets, infrastructure, parks, and recreation. 

- New residents will have the ability to move to Wharton and support local businesses.

- New students enrolled in WISD will increase the annual operating revenue for the District, improving services to your children.   

In contrast if WISD opts to award Hopper to a non-profit, there would be no tax revenue generated to the City because a non-profit organization enjoys tax exempt status. Therefore, most of the benefits above would never happen for the community of Wharton. 

Thank you.

David J. Bowlin

A2J Holdings, LLC

A2J Construction, LLC