"How else do you get bank money into East Austin? Do you brow-beat them? Do you pass an ordinance that they have to lend money there?"

By Alex Avila
Spring/Summer 1994; pages 20-23
Tejas

Gene Watkins, who resigned last year as director of the City of Austin Neighborhood Housing & Conservation Department (NHC), was praised by municipal officials for the programs initiated under his leadership. Watkins also leaves a legacy of controversy, particularly for his alleged "dictatorial" management style of public housing programs in minority East Austin.

Watkins was primarily responsible for $70 million worth of city-sponsored housing and economic development programs scheduled in East Austin in the near future. NHC public housing projects in East Austin include such programs as the following: The Dollar Home Program, a city-sponsored lottery for low-income citizens who do not currently own a home and who can qualify for home improvement loans; Victoria Station, a nearly complete neighborhood renovation program near a drug infested area of sub-standard houses in East Austin; the Scattered Cooperation Infill Housing Project (SCIP), a city-sponsored series of neighborhood developments; the Single-Family Home Program, a deferred home improvement loan program; and more.

Many of the public housing programs are often supplemented with economic development programs such as the Neighborhood Commercial Management Program, a financial assistance program designed to spur economic revitalization of targeted areas; Community Development Block Grants (CDBG), a federal program dispersed through Housing and Urban Development (HUD); city enterprise zones; and similar programs.

"I really think (Watkins') record is excellent in terms of production," says Austin Assistant City Manager Oscar Rodriguez, whose office oversees the NHC. Rodriguez believes that vocal eastside community opposition to NHC programs developed after the city council devised basic regulations to replace previous programs which had been the norm for East Austin economic revitalization.

"The way it is now is that the council passed some basic programs: 'These are programs that we do and these are standards for these programs and if you have an idea it better pass these standards and it better be in these categories. And no more training to do job interviews, no more training to do resumes, no more training to do training,'" Rodriguez explains, simplifying the shift in policy.

"All the stuff that people used to do: soft, non-housing, non-brick-and-mortar sort of services, I don't think you see those out there now. I think that's what a lot of neighborhood, community organizations used to do," Rodriguez adds.

According to City Planning Commissioner Cathy Vasquez, economic revitalization programs in East Austin, including the dispersal of Housing and Urban Development (HUD) funds, in the past needed approval by community based organizations (CBOs) and were overseen by a council-appointed Citizens Advisory Board.

That is, until Watkins' department created its newest programs.

"When the City took over the job of dispersing (HUD) monies themselves instead of going through CBOs, that (citizens) advisory sort of became defunct but has been fighting it all along," says Vasquez who publishes La Prensa, a Mexican-American community newspaper.

"Watkins would make the decisions about what housing would be developed, where, and who would be the builder. He would actually take over the role of the CBO ... It became a dictatorship where one individual was deciding what was best for the community where he, in essence, was a foreigner to," says Vasquez.

Vasquez further contends that the NHC met with developers and determined the look of the housing programs without community input. "This has been a major, major contention in the community. That's the problem. The community feels that it has been cut out of determining what is best for their own community," says Vasquez.

Rodriguez, on the other hand, defends NHC's practice as necessary to secure funding in an area in which banks are traditionally reticent on making investments.

"How else do you get bank money into East Austin? Do you brow-beat them? Do you pass an ordinance that they have to lend money there? I mean, what do you do?" Rodriguez asks. "The basic problem was this, and a lot of people don't understand this. Gene (Watkins) was able to talk the banks into putting mortgage dollars into East Austin.

"The banks said: 'Look, I am not going to give you $40,000 to build a house next to a junk house. I'd just be throwing my money away. It would depreciate my value.' And (Watkins) said, 'Okay, what if I take a whole block and put a bunch of houses there? Will you guys sell mortgages to families who would buy those houses? And the banks said, 'Okay, we can do that.' That way the block protects each house's value," Rodriguez explains.

John Hernández, a member of the Travis Central Appraisal Board and a real estate agent in the Austin firm of Girton & McAllister, does not agree that bank money is difficult to find for East Austin.

"Every one of those banks have taken me over and shown me their programs: NationsBank, Bank of America, BankOne... They all want to do loans for people in targeted areas," says Hernández, who has sold both housing and commercial units in East Austin.

According to Watkins, the City has purchased various tracts of land in three targeted regions in East Austin for SCIP, the city-sponsored neighborhood development program. In total, 200 housing units will be developed through SCIP.

Phase I of SLIP nears completion west of Huston-Tillotson College. Phase II, which will begin in Spring 1994, will take place in the Blackshear Neighborhood between East 11th and 12th Streets, west of Waller Street. The final SCIP phase will develop housing units on an open tract of land across from Brooke Elementary School near East 2nd Street and Tillery.

Some eastside activists have questioned the City's role in this housing development. While Watkins maintains that the city has not used its power of eminent domain in order to acquire undervalued East Austin land, he draw the ire of some East Austin activists who question NHC's tactics.

Eminent domain is the power whereby governmental agencies acquire right of way property at "fair market value." Through eminent domain, school districts can acquire property to build schools, the state can acquire the land to build a highway, or the city can acquire property to be used in the greater public interest. Any land seized by an agency wielding eminent domain powers must be paid for at fair market values. In the case of a minority neighborhood where land values are often deflated, homeowners can lose their houses and may be unable to afford to buy another homestead with what little money they received at fair market value in a deflated market.

"Building housing units where no neighborhoods exist is one thing, but physically moving out residents and property owners in order to improve the value of the property and then to sell at a higher rate is not a normal function of city government," said Susana Almanza, Co-Chair of PODER (People Organized in Defense of Earth & her Resources), an East Austin community organization who along with EAST (East Austin Strategy Team) was instrumental in closing the East Austin Tank Farm, an aggregation of above ground oil and gas storage facilities responsible for a rash of health problems in the minority neighborhood in which it was located.

Both East Austin organizations have alleged "threatening" tactics by NHC in acquiring property on the eastside. An allegation that the NHC claims is false and unsubstantiated. In fact, eastside community organizations have been ineffectual in affecting NHC projects. Some have taken their complaints to the City Council's Housing Subcommittee.

Community activists aren't the only ones complaining about NHC activities in East Austin. Area real estate agents, particularly the few agents who sell in East Austin, complain of being left out of a process they say should be opened to a free market. Hernández says that attempts were made by a number of agents to work with NHC but to no avail.

"Everyone that I spoke to in the [real estate] industry felt that by Gene Watkins doing 'everything,' it was costing more money and taking longer to do than if they had left it to a free market," says Hernández.

According to Hernández, Watkins refused to work with real estate agents because he did not want program participants to pay agency commissions. Hernández adds that many agents were willing to lower their commission percentage in exchange for participation in the city-sponsored programs, particularly SCIP. Hernández notes that most agents have a core of clients looking to buy who are pre-screened to make housing purchases.

"Gene Watkins wanted to be the developer, he wanted to find the clients, he wanted to do the loan applications. So, people like myself and all the other agents, he cut us out of the market. And we're the ones that have the clients," says Hernández. "It doesn't make sense."

Hernández notes that even the Federal HUD Homes Program works through real estate agents who bring qualified, pre-screened clients to the program.

City officials are not ignorant about East Austin community concerns in regards to the public housing programs being developed there.

"We have had several, very lengthy discussions about (community complaints with the NHC)," said City Council Member Gus García, who also sits on the Council's Housing Subcommittee. "There were substantial disagreements about what to do with the neighborhood development corporations."

García says that the Housing Subcommittee has sought to reestablish the significance of the role between NHC and the community development commission comprised of Austin residents. García says that in the past, Watkins has worked around the community development commission, against the desires of the Housing Subcommittee.

"There have been disagreements between the Housing Subcommittee and the Neighborhood Housing and Conservation Services Department," adds García. "We have had our discussions about that."

During an interview with Watkins, NHC maps indicated that the City acquired existing housing units in the Blackshear area at prices ranging from $8,000 to $29,000 in the SCIP II area. Open lots scattered throughout the area were purchased for even less. When the improvements are completed and all three SCIP phases are complete, the city plans to parcel out and sell 100 units at $50,000 each.

According to NHC housing program literature, 100 SCIP units will be dispersed on a rent-to-own basis, allowing residents who pay the city rent for 15 years to negotiate a purchase of their units.

As of August 1993 (the last time such statistics were available) at least 723 family units were either under construction or planned for East Austin through various NHC public housing programs. Council Member García admits that the City Council Housing Subcommittee has received complaints from the eastside community about the NHC, and Watkins in particular.

"Gene [Watkins] is very private sector oriented. He wants to make decisions himself and move with them," explains García. "What we're saying is that's not the way we conduct business here. Here, at the City, we have to participate. The reason I think Gene is leaving is because the private sector economy is good. This is a good time for him to leave. He is very talented in technical areas; extremely talented."

Rumors have surfaced among City workers that Watkins is leaving the NHC because of the change in the make-up of the council's Housing Subcommittee membership. García says that when the subcommittee was comprised of himself, Dr. Charles Urdy and former Council Member Bob Larson, Urdy and Larson often gave blanket support to Watkins' methods of directing the NHC.

With the resignation of Dr. Urdy from the council, the appointment of Council Member Brigid Shea to the housing subcommittee and García's impending chairmanship, the Housing Subcommittee will hold the NHC more accountable to community concerns, says García.

Although SCIP is the housing program which has drawn the most community opposition, it is not the only major city project in East Austin. In addition to SCIP, one of NHC's most visible projects in the eastside was Don Limon Restaurant, which the City helped to finance through its Neighborhood Commercial Management Program (NCMP). According to Don Limon's owner Jesse Limon, the City financed 45 percent of the two million dollar commercial project.

In an interview, Watkins himself has stated that the (NCMP) received national acclaim for the success of the Don Limon project, which employs 120 individuals. Most are from East Austin.

---

"We are in a sensitive area and we face problems in East Austin that, I think, other areas of town don't have to face."

---

NHC participated in the Don Limon's project in order to bring economic dollars into East Austin and create employment which would otherwise not be generated, which is the purpose of the NCMP. The Limons took advantage of the program, designed to spur economic development in city-targeted areas. The restaurant's location at 1121 E.7th Street falls in one such area.

In an interview dated February 28, 1992 in ARRIBA Arts & Business News, another Mexican-American community newspaper, Jesse Limon said: "The general perception is that (the new restaurant) is going to create more business in the area, not take away from competitors."

While the City held high hopes for economic growth through the new Don Limon's Restaurant and the NCMP in general, older, more established East Austin restaurants have seen a decline in business. Many East Austin restaurateurs fear that Limon's is usurping the East Austin restaurant market instead of enhancing it.

Recently, a consortium of East Austin restaurateurs, some of whom have been long-time competitors, have organized the "Little Mexico Restaurant Association" to promote dining in East Austin.

"We originally organized about seven months ago when some of our restaurants were experiencing a decline in sales," says Mexico Tipico Restaurant owner Diana Valera, spokesperson for the East Austin Restaurant Association.. "What has come out of it is the 'Ole Mexico' project."

Valera says that the restaurant association has been working with the Capital Metro Transportation Authority and City of Austin staff in order to improve the image of shopping and dining in East Austin through Ole Mexico.

According to Valera, Texas Department of Transportation funds may be made available in the near future in order to help plan Capital Metro's light rail project. The light rail's proposed route would connect the downtown business district and the Austin Convention Center with many East Austin businesses and restaurants.

In October of 1993, Carmen's La Tapatia Restaurant closed its doors after 43 years of business as an East Austin restaurant. Restaurant Co-Manager Rick Gonzales indicated that the nearby Don Limon's Restaurant and the subsequent loss of regular customers "was a factor" in the restaurant's on-going economic problems which led to its closure. Gonzales admitted that other, unspecified factors were also present.

ARRIBA Art & Business News quoted La Tapatia President Albert Gonzales as saying that the family restaurant was "taxed out of business." In view of conflicting quotes from different sources, it is difficult at best to ascertain what role, if any, nearby Limon's Restaurant had in La Tapatia's closure, say analysts. (Recently, reports have emerged that Don Limon's has filed for bankruptcy.)

While the movement for an East Austin Restaurant Association began prior to the closure of La Tapatia, the recent failure of a long-time East Austin restaurant sent a signal to other area businesses.

"One of the things you learn when a business of forty years closes is that nobody's safe," says Valera. "It reminds us that yes we are in a sensitive area and we face problems in East Austin that, I think, other areas of town don't have to face."

Another community concern involves the creation of public housing units which would concentrate low-income populations and compromise the integrity of the neighborhoods. While many areas of East Austin are targeted low-income areas, these areas can also boast generations of loyalty to certain neighborhoods.

According to a city report which monitored Austin neighborhood housing patterns based upon the 1990 U.S. Census, the largest regions of growth for minority neighborhoods are far North Austin and far Southeast Austin. No public housing units are planned for South Austin's barrio, which is almost as old as the East Austin barrio. Despite existing housing patterns and other trends, the city is currently planning to build public housing units only in East Austin.

"If you say that (they are concentrating low income housing in East Austin), they'll reply, 'Well, hey I thought you wanted the help,'" explains Planning Commissioner Vasquez. "They can't see beyond, they can't see the broader picture that, in essence, what they are creating is a segregated society."

Council Member García says that this is an area of concern for him and the Housing Subcommittee.

"We will look at that. This is one of the agenda items that I had which is to look at where the Latinos are going. In the northern part of the city, there is a very heavy Latino population and it is a Latino population that is also needy," he adds.

García says that when a successor to Watkins is found, these and other concerns, particularly community accountability, will be brought up with the new director. When a new NHC director is found, he or she is expected to continue many of the programs Watkins has initiated.

Watkins remains in Austin working for a private company and helps the NHC in its transition to a new director.

"People can criticize Gene Watkins and I have myself, but that does not take away from his skills as a housing coordinator," García admits. "He has done very well."