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The Villages of Galveston!
by David Stanowski
03 November 2010

Tom Cousins is an Atlanta developer and philanthropist who set up a foundation that partnered with the local housing authority to tear down a 650 unit housing project and replace it with a 542 unit mixed-income development, known as the Villages of East Lake, which is producing many indicators of success: crime is down, employment is up, property values surrounding the complex have increased, and children’s reading scores have improved! The Villages has become the model for the Purpose Built Communities movement.

What does it take to create this kind of success?

One half of the units were set aside for public housing residents, and the other half were available to anyone who could pay the market-rate rents. In addition, public housing residents were strictly screened to eliminate the worst criminal offenders, and all of them, except the elderly or disabled, must either hold a job or actively participate in the self-sufficiency program, or they will be evicted.

This development is managed very efficiently by a private company that provides enhanced services such as 24-hour maintenance.

East Lake includes an on-site charter school, child development center, YMCA, public golf course, and security, PLUS it offers the following social services:

•    self-sufficiency program
•    after-school programs
•    junior golf academy
•    caddie program
•    college scholarship program
•    home ownership program
•    "strategic neighbors" program

“…the Foundation offers partial rent reductions to "strategic neighbors" who run special programs designed to bring public housing and middle-income neighbors into healthy relationship.

Twelve current strategic neighbors run recreation-oriented after-school programs, publish a community newsletter, hold senior tea-times, and run informal mentoring programs and other activities.”

What does it cost?

$128 million for the housing and all of the facilities and amenities. That’s $236,162 per unit. Cousin’s foundation paid about 25% of the initial cost. The school and day-care facilities cost $20 million. The after school program runs $400,000/year and security costs $196,000/year, however, it is unclear what the total additional operational costs are for the facilities and amenities, but they are being heavily subsidized by the foundation.  

Are there any problems?

East Lake has found that the 50-50 mix doesn’t really work. “A 30% mix would make our development truly viable and compensate for the risks involved.” “At a 50-50 mix we have found that the problems inherent in a low-income environment can easily overpower the strengths of a middle-income community.”

“… public housing can present difficult challenges with respect to security. Market rate residents simply will not move into a community with perceived security issues, especially drug dealing.”

“Even though this cost is 100% a result of the public housing component of our community, under the current HUD program the Atlanta Housing Authority only pays 50% of the cost.”

“… we have also found, unfortunately, that a small number of people simply are unwilling to put forth the effort to seek employment or stay employed. These families tend to be the ones that create the most problems in the community. For mixed-income housing to work, management must be able to terminate the leases of people who choose not to participate in the self-sufficiency program.

Therefore, not only must mixed-income developments provide funding for effective self-sufficiency programs, the rules must be changed to make it easier to remove those families who choose not to participate.”

All quotations above are from Tom Cousins.

What would motivate the middle class to live in a mixed-income development?

In Atlanta, it offers the opportunity to live within five miles of downtown; no such advantage will exist in Galveston. Local mixed-income developments will simply have to be more attractive than other alternatives.

Mixed-income developments; pros and cons:

Mixed-income developments do seem to be the least objectionable public housing model, and the one that offers the greatest chance of “success”, so if the GHA is going to bring “first-class” public housing to this city, there is no reason for them to use anything but this approach.

However, public housing of any type is fraught with pitfalls, and mixed-income developments are no exception. They rely on large subsidies from philanthropists and non-profits to provide many of the facilities and amenities that hold the community together. If the subsidies dry up, or if trouble develops amongst the public housing tenants, such developments can reach a tipping point and fail; and the middle class will flee.

What happened to the plans for mixed-income developments in Galveston?

At last week’s joint workshop, the GHA outlined a plan for 48 family public housing units plus 72 senior public housing units plus 150-200 student housing units at the Magnolia site. This is not a mixed-income development as envisioned by the Eastlake model. It is three separate projects that may or may not be built near each other; not a seamless integrated community! There was also no commitment to develop authentic mixed-income communities at Cedar Terrace or Oleander or at any other location in the City!

If mixed-income is the best public housing model available, and the one that will deliver “first-class” public housing to this city, why are the Mayor and the GHA backing away from it? Why is there no firm plan or commitment to build it? They are being forced to rebuild 569 public housing units, so using their preferred 25% public housing component; the GHA needs to build a total of 2,276 new housing units to make this concept work.

Mixed-income developments must be built as large complexes that can afford to include facilities and amenities like charter schools and community centers. In a 2001 ULI forum, the panel reviewed mixed-income communities containing between 308 and 1,433 housing units.

They also “… found that the services and activities that community facilities offer provide residents with a conceptual and physical space in which to gather. Whether they contain recreational centers, educational offerings, meeting spaces, or family support services, these facilities are also a catalyst for opportunities to improve the individual, the family, the neighborhood, and the larger community.”

It should be absolutely clear to every citizen of this city that scattered sites cannot possibly offer the facilities and amenities that mixed-income developments claim are essential to building a sense of community, and offering the upward mobility that produces superior results. Scattered sites are no different than Section 8 except for the ownership, and are no substitute for mixed-income developments. There is no evidence that scattered sites consistently perform better than the traditional housing projects that we are replacing, and in some cities Section 8 scattering lead to rising crime.

The comments by the GHA Board last week that if they can’t find the partners to build mixed-income developments, they will simply build all scattered-site units is totally unacceptable, and not what was promised as recently as the 23 October guest column by GHA Chair, Paula Neff.

Learn Purchase Real Estate for Cents on the Dollar!

For the Mayor and the GHA Board to deliver on their promise of first-class public housing using the mixed-income model; they are going to have to take the following steps:

1.)  Sell the former Magnolia, Oleander, and Cedar Terrace sites at public auction. These sites violate the current guidelines on acceptable locations for public housing, because they will continue to concentrate low-income minorities, in those census tracts, and leave the City, the Councilmembers, the GHA, and the Commissioners vulnerable to a Civil-Rights lawsuit.

2.)  Acquire the land to build 2-4 large mixed-income developments in census tracts that do not violate the current guidelines on acceptable locations for public housing, because they will de-concentrate low-income minorities.

3.)  Draft detailed plans of these developments for review.

Miracle at East Lake: Video

A Civic Hole-in-One: An Atlanta donor uses the Ancient Game to turn around the city's worst neighborhood

Creating Communities of Hope and Opportunity: The Revitalization of East Lake

How golf transformed a blighted neighborhood

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