Low Rent Housing in Eagle Pass Shortage forecasted due to Eagle Ford Shale Boom
By: Jose G. Landa, Copyright 2014, Eagle Pass Business Journal, Inc.
A shortage of low rent housing in Eagle Pass is forecasted due to the Eagle Ford Shale oil and gas boom, announced Mary Velasquez, Executive Director of the Eagle Pass Housing Authority. Velasquez had just attended the Eagle Ford Shale Consortium annual conference in San Antonio, Texas.
Velasquez noted the growing trend in the community at a recent Eagle Pass Housing Authority (EPHA) Board of Commissioners regular meeting held on Tuesday, April 24, 2014.
Confirming Velasquez’s forecast was EPHA’s Section 8 Low Rent Director Criselda Salazar.
Velasquez and Salazar made it known publicly that Section 8 families in Eagle Pass are having a harder time finding housing low rent units to accommodate their housing needs.
Velasquez stated that due to an increase demand of housing units by workers in the Eagle Ford Shale oil and gas play in and around Maverick County, the EPHA is seeing a trend in which families in the low rent housing Section 8 voucher program are having a difficult time finding and securing housing units in Eagle Pass. “We are having problems where our Section 8 applicants are having problems finding homes. We are basically competing, primarily with people who are working in the oil and gas industries,” said Velasquez.
Velasquez noted that families are paying higher rents and that many landlords are opting to rent out their housing units to oil and gas workers who are willing to pay higher rents than the lower Section 8 voucher rents paid by the EPHA. Velasquez added that it has become a challenge for low rent Section 8 voucher program families finding affordable housing rents in Eagle Pass.
The housing dilemna being experienced by Eagle Pass families is nothing new to other Eagle Ford Shale oil and gas communities such as Carrizo Springs, Cotulla, Pearsall, and Karnes City. These communities have reported that the supply and demand of housing units has driven prices of monthly rents for housing to increase significantly, causing many property owners to withdraw their rental properties from public housing Section 8 voucher programs and rent them to oil and gas workers or their companies for a much higher monthly rents. The consequences of this housing dilemna is that low rent Section 8 families are being forced to relocate to other communities because they can not find affordable housing rents in their original communities, creating a shortage of affordable housing units for low and middle income people.
In Carrizo Springs, this increased demand for housing units has dealt a blow to the availability of affordable housing units for such programs as the Section 8 program, forcing some families to have to move out of town because the monthly rents have skyrocketed and become unaffordable to low and middle income families. the process it has also began an upswing of higher rental and lease fees for all dwellings in general across the board.
“We had to move away from the hustle and bustle that is Carrizo Springs,” said a man who relocated his family to Eagle Pass due to the increased costs of living being there as a result of the Eagle Ford Shale boom. “We can’t all be Eagle Ford workers. I was paying $450 per month in rent and from one month to the next they increased my rent to $1,000, something I couldn’t afford on my pay. We looked for other housing but it seems that everything (prices) went up,” said the man. “We packed up and left like many others in those areas, driven away from what many of us knew and called home, not anymore,” added the man.
Low and middle income families as well as non-Eagle Ford working families are unable to afford the exorbitant rental increases now being charged by rental property owners throughout the Winter Garden Area and the Eagle Ford Shale region in South Texas.
Eagle Pass and Maverick County are no exception to this growing housing dilemna being experienced throughout the Eagle Ford Shale in South Texas. Local apartment owners have increased their monthly rents during the past two years due to several factors including an increased demand by Eagle Ford Shale workers and companies, the increased ad valorem property tax appraisal values assigned by the Maverick County Appraisal District last year, and a decrease of federal funding for low rent Section 8 vouchers for low and middle income families.
An Eagle Pass family living in a low rent housing unit reported to the Eagle Pass Business Journal that their monthly rent was increased by their landlord from the previous $400 per month to $600 per month effective January 1, 2014. When the family asked the landlord how come he had increased the rent so much, the landlord replied that he was having to pay higher ad valorem taxes due to the Appraisal District’s raising the market value of his property. Another family reported their landlord told them they were raising the monthly rent from $550 to $800 because they had just rented other similar rental properties to Eagle Ford Shale companies for $800 to $1,000 per month. Eagle Ford Shale companies are leasing rental properties for their workers near their work sites to avoid them from having to travel from far distances and having them readily available.
Another factor causing a low rent housing shortage is the federal government’s decrease of funding the U.S. Department of Housing and Urban Development (HUD) low rent housing programs such as the Section 8 voucher program.
Criselda Salazar, Section 8 Director at the EPHA, advised the Commissioners that their Section 8 voucher program had been decreased from the previous 488 vouchers to 409 vouchers. Salazar noted that the EPHA has 307 families on their Section 8 waiting list. Salazar stated that in order to comply with HUD’s decreased funding of Section 8 voucher program, the EPHA is not renewing some of the rental properties whose leases expire to satisfy the 409 units authorized.
“We continue encountering problems with families finding suitable housing as there is hardly any units available, especially the three (3) and four (4) bedroom houses,” said Salazar.
“The rents have increased significantly and the landlords rather rent it to a market renter for more money than to work with Section 8 and have to negotiate a lower rent. As we anticipated, some landlords are asking for rent increases on their lease renewals. We are running the comparability studies to determine if the requested rent is comparable to other units in the area to determine if we will allow the rent increase,” added Salazar.
Salazar cited for example one landlord who built six (6) new one bedroom apartments and they were leased up within one week.
The EPHA Section 8 voucher program has provided affordable low-rent housing to low and middle class families in Eagle Pass and Maverick County for many years and has been an important economic boost to the local economy. Salazar cited that a total of $148,792 was spent by EPHA in housing assistance Section 8 voucher program payments to local landlords during the month of March 2014 plus an additional $4,085 in utility allowance payments, totaling $152,877 for March 2014.
Both Velasquez and Salazar forecast a shortage of low rent and affordable housing units for low and middle income families in Eagle Pass in the immediate future as the Eagle Ford Shale play moves westward to Maverick County and into northern Mexico, market supply and demand, and decreased federal government funding for affordable housing take effect in the Maverick County economy.
