John S. Moody, Parkside Capital
My family has been part of the Houston real estate community for four generations starting with my grandparents developing rental homes in the Irvington and Ryan Additions and continuing to the current next generation of my children and nephews. I think we collectively have a pretty good understanding of what makes our local economy special and allows us to offer the most affordable and most diverse set of housing options of any major metro in the United States.
The key lynch pin of affordability is our use of Municipal Utility Districts (MUDs) which are unique to Texas. This vehicle allows a significant amount of the cost of a developed lot to be financed at a very affordable rate of interest over extended periods of time. Therefore, homebuilders can purchase a lot substantially below cost and by passing that savings on to the homebuyer, deliver housing that is more affordable. MUD’s only reimburse actual costs incurred as certified by the MUD engineer. All projects are bid and costs are tightly controlled. The total tax rate inside MUDs is typically lower than the municipal areas so homeowners are achieving good value. Ask your staff to explain why our city has the highest growth rate and lowest cost housing in the U.S. MUDs also allow development in unincorporated areas where there’s no municipal service. Your newspaper suggests that the alternative to MUDs would be MUDs also allow development in unincorporated areas where there’s no municipal service. Your newspaper suggests that the alternative to MUDs would be incorporation of the land into a city or other municipality. This is completely unrealistic. Neither our counties nor cities are equipped to fund the massive infrastructure required to accommodate the 20 year historical growth rate of 100,000 new residents per year. I will guarantee you, if you ask, 100% of the mayors of Houston, Katy, Sugarland, Conroe, Pearland etc. will tell you they have no way to provide the infrastructure. I’ll guarantee you that you will you get the same response from all of our County Judges and Commissioners.
The Chronicle seems to suggest that the MUD structure is a major concern to residents and homeowners. You fail to note that 50% of all area wide sales for the past 15 years are within these very MUDs. People are voting with their feet and checkbooks every day and opting to live within these districts. Why? The large Master Planned Communities (Sienna, Riverstone, Cinco Ranch, First Colony, Aliana, Cross Creek to name a few) are all financed in part by MUD bond sales. The bond sales reimburse actual costs expended by the developers to install state of the art landscaping, hiking trails, bike paths, recreation centers, etc. Again ask your staff why the highest quality of life communities are almost exclusively located in the MUD financed developments. Why does Houston have six of the top 10 Master Planned Communities (all using MUDs) in the United States? How would we begin to accommodate 100,000 new people per year without MUDs?
I really believe the Chronicle has created a phantom issue where none actually exist.
I think they had a story in mind before they attempted to actually study the issues. MUDs are the backbone of our entire local economy as they provide affordability and options for a rapidly growing city. They are widely popular and consistently attract 50% market share. Affordable housing is the most significant ingredient to our Houston success story. Job creation, business relocation to Houston, and our overall competitive advantage starts with affordable housing. MUDs are transparent, regulated by the TCEQ and work. They are under local homeowner control and run for the benefit of its residents. They are the key part of Houston’s exceptional energy and growth.
I would really ask of the Chronicle carefully review this entire issue.