Dream Homes in East Austin?

Come here. I want you to see this view," beckons Gene Watkins, climbing the plywood stairs of a half-constructed home to a window which perfectly frames the state Capitol building beyond a neighborhood park and a hillside of trees. This could be any three bedroom, two bath home in Tarrytown or Clarksville, except that the Capitol view is all wrong. This view is of the Capitol's East wing, and the home is on Olive Street in one of the most blighted sections of East Austin. Part of the federally funded Scattered Cooperative Infill Project (SCIP II) of which Watkins is developer, the home is one of 52 which will be sold to low-income home buyers for a price between $59,000 and $75,000. The second phase of the project will include the construction of 48 rental homes. Despite seven years of delay and political resistance, the construction of SCIP II finally began two months ago, and Watkins says there are already 500 interested applicants. And why not? With crime on the decline in this shady neighborhood next door to downtown, who wouldn't want a brand new home on the cheap?

SCIP II is the last of three SCIP projects in East Austin, the other two being long since completed and the homes inhabited. The first SCIP, in the early Nineties, also had Watkins at the helm, but back then he was the head of the city's Neighborhood Housing department. Much of the protest to SCIP II springs from Watkins' involvement this time around on the profit-making side of the deal. In 1990, Watkins got the ball rolling on SCIP II from the city's end and then later left his position with the city to become the project's developer, personally earning $6,000 per constructed home. The lucrative switcheroo left many suspicious of Watkins' dealings, and cautious about the project's cost, which has already reached $6.4 million.

Watkins, who is African American, chalks up critics' suspicions to racism. "It's not because my fee is exorbitant. In fact, it's rather modest. The issue is just that I'm making a fee," Watkins explains, saying that undue attention is focused on the few African Americans who are successful in business. It did not help matters much that SCIP II's biggest proponent on city council was the ousted Eric Mitchell, never known for his diplomacy. Mitchell did not make many friends for the project and alienated, in particular, surrounding neighborhood groups. Watkins thinks these concerns are trivial when measured against SCIP's mission. "Why condemn a whole community to another 80 years of disinvestment because of some political or personal vendetta?" Watkins asks.

The Guadalupe Neighborhood Development Corporation (GNDC), a resident-run nonprofit property developer, was initially excited about SCIP II - until the project's state funding became contingent on making the 100 homes into rental property. "It was going to create a slum, plain and simple," explains Mark Rogers of GNDC. GNDC fought against funding the project through state tax credits, and succeeded in assuring the current rental-ownership mix which is funded by federal Community Development Block Grants (CDBG). "Now they're doing it in a way that we like," says Rogers, who still has concerns about the high cost of SCIP homes. GNDC is refurbishing and reselling homes that Rogers says are more accessible to low income residents. The least expensive sold for $7,900; the most expensive for $42,500. A four-bedroom GNDC home costs almost 40% less than a SCIP II home. "The difference is we're not for-profit," Rogers says. "I do it because I love the neighborhood. [Watkins] does it so he can shop at Neiman Marcus."

Watkins counters that the issue is not whether he makes money, but that his project exists to provide low-income families with decent homes, and that's just what it's doing. Indeed, back at the SCIP II site, homes are going up - and fast. As Watkins proudly takes a visitor on a tour, he points out that 11 applicants have already been pre-approved for home loans, and explains that the homes will be sold on a first-come, first-serve basis to those who meet income criteria issued by Housing and Urban Development (HUD). Under the guidelines, a family of four in Austin must make less than $38,000 to apply for a SCIP home; a single person must make less than $27,250.


A SCIP Convert

"Are these houses for lease or for sale?" calls out passerby William Brown to Watkins, who is standing in front of a half-completed house. Watkins replies that they're for sale, and Brown immediately asks for more information. "It's pretty hard to find an affordable house in Austin," says Brown, 72, explaining that housing for the elderly is particularly hard to come by.

Brown leaves with Watkins' phone number in his pocket just as SCIP homebuyer Louis Ramirez stops his truck to greet the developer. Ramirez's situation is a special case and a success story. Ramirez's SCIP home will be built on the lot his current dilapidated home occupies at a cost to him of between $5,000 and $8,000. "Now that's what you call affordable," says Ramirez. If Ramirez had not taken the deal, SCIP would have had to pay his family $62,000 to relocate. Ramirez says he preferred to stay, especially since the project has already changed the area for the better. "Even these few houses transform the neighborhood. The [criminal] element has really stopped and as a consequence I've seen a lot of kids playing here," he says.



Louis Ramirez (pictured above in front of his home on Olive street), says that although he never trusted Eric Mitchell or Gene Watkins, he's seen the light on SCIPII.

photograph by Kayte VanScoy

Ramirez was not always a fan of SCIP, however. From his yard, decorated with "Willie Lewis" signs leftover from the May election, he explains that he always had the feeling that Eric Mitchell and Gene Watkins were in a mutual back-scratching mode. "Eric Mitchell had an agenda that he, of course, wouldn't reveal. I thought I was being targeted here and I know a lot of people, renters, who panicked and moved away," says Ramirez. As a homeowner, Ramirez ended up having first pick on SCIP deals, but he is still cautious. "I have to be very careful doing business with Mr. Watkins," he explains, pointing out some items in his contract - such as the two-year window the developer will have to build his new home, which Ramirez plans to shorten before signing.

Watkins can definitely be a smooth operator. In touring the SCIP area, he decries the federally mandated historic preservation which SCIP II is reluctantly undertaking along Juniper Street. Receiving CDBG funds obligates SCIP to mitigate the removal of historic homes from the construction zone. Watkins points out to this reporter three remarkably miserable homes along Juniper and wonders aloud how on earth he could be expected to restore them. The houses, which currently rent for $200 each, could by no means be considered historical or worth salvaging.

But for all of Watkins' "poor me, look what they are making me salvage" scenarios, a phone call to the Texas Historical Commission (THC) revealed that none of the three houses were slated for restoration. When confronted with the truth, Watkins admits that the crummy rent homes are not even in SCIP's jurisdiction, but fall under the Austin Revitalization Authority. "To protect the integrity of the SCIP district we may have to attempt to purchase them," suggests Watkins in his own defense.

He still takes issue, though, with the high cost of rehabilitating old homes, taking particular exception to two "shotgun shacks" which the THC has designated as salvageable. The shacks have become a lightning rod for preservation naysayers, such as Eric Mitchell, who say the abandoned shacks only stand as bad memories of slavery. But wait - isn't that historically inaccurate? "Contrary to rumors, it is chronologically impossible that these are slave quarters," rebuts Tere O'Connell of THC, pointing out that the shacks were built between 1910 and 1920.


Gentrification Catalyst?

It seems that issues of race are never far away from discussions involving SCIP II. "SCIP II housing will assure that the community is not gentrified the way Clarksville was," states Watkins. However, it is illegal to sell the homes on the basis of race. When asked what would keep white families from buying the lovely homes overlooking downtown, Watkins merely shrugs. "I don't even know the racial mix of the applicants," he admits, though he is careful to point out that neighborhood residents are given preference in the screening process.

Rogers fears that SCIP will actually be a catalyst for gentrification. "At the cost of those homes, we're skeptical. We see it as students and upwardly mobile types," he says, pointing out that with the $550 per month rental cost and the area's proximity to the universities, the SCIP rentals will be a mecca for students.

Even as the project is coming into fruition, SCIP II could not escape controversy. At last week's council work session, during the approval of 1997-1998 CDBG funding, which accounts for most of the $6.4 million that SCIP II has already spent, the city manager recommended that $217,000 be redirected away from a voucher program for renters to a developer assistance fund for SCIP II. The revelation that the city was planning to slight the voucher program in favor of SCIP didn't sit well with council members, especially after they heard from Kathy Ridings of the Salvation Army,who announced that her group had to turn away 125 families over the last three months because of a lack of space - families that could have immediately benefitted from rental vouchers. The council immediately restored voucher funding. Don't cry for Watkins, however. $1,490,914 in newly awarded CDBG funds will still go to developer assistance - and SCIP II is busy pouring foundations this very minute.

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