Hostname: page-component-cd9895bd7-dzt6s Total loading time: 0 Render date: 2024-12-26T20:59:55.215Z Has data issue: false hasContentIssue false
  • English
  • Français

Protecting Homebuyers in Low‐Income Communities: Evaluating the Success of Texas Legislative Reforms in the Informal Homeownership Market

Published online by Cambridge University Press:  27 December 2018

Peter M. Ward ,
Heather K. Way  and
Lucille Wood
Get access Rights & Permissions [Opens in a new window]

Abstract

Among low‐income homebuyers, a contract for deed (CFD) has been a widely used but risky and informal mechanism for purchasing a home or lot. This article examines a series of major consumer protections adopted by the Texas Legislature from 1995 to 2005 and whether this legislation shaped the behavior of sellers who historically relied on CFDs in Texas colonias. Tracking changes in the use of CFDs between 1990 and 2010, we show that developers responded to the legislative reforms by shifting away from CFDs and into other forms of seller financing. At the same time, developers have adopted a series of workarounds to the legislation (presumably legal), leaving low‐income buyers vulnerable to rapid repossession by the developer. In contrast, the impact of the legislation on low‐income residents selling their homes has been minimal. These consumer‐to‐consumer transactions remain highly informal, with ongoing reliance on the now illegal, unrecorded CFD.

Type
Articles
Information
Law & Social Inquiry , Volume 41 , Issue 1 , Winter 2016 , pp. 152 - 183
Copyright
Copyright © American Bar Foundation, 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

References

Burby, Raymond, May, Peter, and Patterson, Robert. 1998. Improving Compliance with Regulations: Choice and Outcomes for Local Government. Journal of the American Planning Association 64 (3): 324–34.Google Scholar
Clemmer, Shelayne. 2007. Texas's Attempt to Mitigate the Risks of Contracts for Deed—Too Much for Sellers—Too Little for Buyers. St. Mary's Law Journal 38:755–808.Google Scholar
Davies, Christopher S., and Holz, Robert. 1992. Settlement Evolution of the “Colonias” Along the US‐Mexico Border: The Case of the Lower Rio Grande Valley of Texas. Habitat International 16 (4): 119–42.Google Scholar
Donelson, Angela, and Holguin, Esperanza. 2010. Sustainable, Affordable Homeownership in Arizona and New Mexico Colonias. In The Colonias Reader, ed. Donelson, A. J. and Esparza, A. X., 115–32. Tucson, AZ: University of Arizona Press.Google Scholar
Durst, Noah J. 2014a. The Rise of Renters and Renting in Texas Colonias. Habitat International 43:72–78.Google Scholar
Durst, Noah J. 2014b. Municipal Annexation and the Selective Underbounding of Colonias in Texas’ Lower Rio Grande Valley. Environment and Planning A 46:1699–1715.Google Scholar
Durst, Noah J. 2014c. Second‐Generation Policy Priorities for Colonias and Informal Settlements in Texas. Housing Policy Debate. doi:10.1080/10511482.2013.879603.Google Scholar
Durst, Noah J., and Ward, Peter M. 2014. Measuring Self‐Help Home Improvements in Texas Colonias: A Ten Year “Snapshot” Study. Urban Studies 51 (10): 2143–59.Google Scholar
Durst, Noah J., and Ward, Peter M. Forthcoming. Lot Vacancy and Property Abandonment: Colonias and Informal Subdivisions in Texas. Manuscript under review.Google Scholar
Ellickson, Robert C. 1991. Order Without Law: How Neighbors Settle Disputes. Cambridge, MA: Harvard University Press.Google Scholar
Ellickson, Robert C. 2012. The Costs of Complex Land Titles: Two Examples from China. Faculty Scholarship Series, Paper 3604. http://digitalcommons.law.yale.edu/fss_papers/3604 (accessed January 30, 2015).Google Scholar
Federal Reserve Bank of Dallas, Office of Community Affairs. n.d. Texas Colonias: A Thumbnail Sketch of Conditions, Issues, Challenges, and Opportunities. http://www.dallasfed.org/assets/documents/cd/pubs/colonias.pdf (accessed January 30, 2015).Google Scholar
Giusti, C., and Estévez, L. 2011. Micro‐Lending for Housing in the United States: A Case Study in Colonias in Texas. Habitat International 35 (2): 307–15.Google Scholar
Jensen, Jerryl Ann. 1996. Regulation of Residential Contracts for Deed in Texas: Senate Bill 336 and Beyond. MA Professional Report, the LBJ School of Public Affairs, University of Texas at Austin.Google Scholar
Larson, Jane. 1995. Free Markets in the Heart of Texas. Georgetown Law Journal 84 (December): 179–260.Google Scholar
Larson, Jane. 2002. Informality, Illegality, and Inequality. Yale Law and Policy Review 20:137–82.Google Scholar
Lee, Michael C. 2005. Contracts for Deeds: Extinction Long Overdue. http://www.munsch.com/content/newsroom/documents/mikeleesarticle.pdf (accessed through Lexus Web January 30, 2015).Google Scholar
Lyndon B. Johnson School of Public Affairs. 2000. Residential Land Market Dynamics, Absentee Lot Owners, and Densification Policies for Texas Colonias. Report prepared by P. M. Ward in collaboration with Robert Stevenson and Angela Stuesse.Google Scholar
Olmedo, Carlos and Ward, Peter M. Forthcoming. Model Subdivisions: The New Face of Developer Lot Sales for Low‐income Colonia‐type Housing in Texas. Manuscript under review.Google Scholar
Report to the 61st Legislature by the Senate Interim Committee Studying Poverty in Texas. 1969. http://www.lrl.state.tx.us/scanned/interim/60/p869.pdf (accessed January 30, 2015).Google Scholar
Texas Senate Committee on International Relations, Trade and Technology. 1996. Interim Report to the 75th Legislature. http://www.lrl.state.tx.us/scanned/interim/74/in9.pdf (accessed January 30, 2015).Google Scholar
Texas Water Development Board. 1992. Water and Wastewater Needs for Colonias in Texas. Austin, TX: Texas Water Development Board Google Scholar
Texas Water Development Board. 1995. Water and Wastewater Needs for Colonias in Texas. Austin, TX: Texas Water Development Board Google Scholar
Ward, Peter M. 1999. Colonias and Public Policy in Texas and Mexico: Urbanization by Stealth. Austin, TX: University of Texas Press.Google Scholar
Ward, Peter M. 2003. Informality of Housing Production at the Urban‐Rural Interface: The Not‐So‐Strange Case of Colonias in the US: Texas, the Border and Beyond. In Urban Informality, ed. Roy, Annanya and Sayyad, Nezar Al, 243–70. Berkeley, CA: Lexington/Center for Middle Eastern Studies, University of California, Berkeley.Google Scholar
Ward, Peter M. 2014. The Reproduction of Informality in Low‐Income Self‐Help Housing Communities in the USA. In The Informal City in the USA, ed. Mukhija, Vinit and Loukaitou‐Sideris, Anastasia, 59–77. Cambridge, MA: MIT Press.Google Scholar
Ward, Peter M., Giusti, Cecilia, Larson, Jane, and de Souza, Flavio. 2011. Con el título en la mano: The Meaning of Full Property Titles, and the Impact of Titling Programs upon Low Income Housing Improvements in Texas Colonias. Law & Social Inquiry 36 (1): 1–82.Google Scholar
Ward, Peter M., Guisti, Cecilia, and de Souza, Flavio. 2004 Colonia Land and Housing Market Performance and the Impact of Lot Title Regularization in Texas. Urban Studies 41 (13): 2621–46.Google Scholar
Ward, Peter M, Olmedo, Carlos, Rojas, Danielle, and Sullivan, Esther, 2010. Housing Conditions, Sustainability and Self Help in Rancho Vista and Redwood Informal Subdivisions in Central Texas. Austin, TX: LBJ School of Public Affairs, University of Texas at Austin. http://www.lahn.utexas.org/Texas%20Colonias/TexasColonias2.html (accessed January 30, 2015).Google Scholar
Ward, Peter M., and Peters, Paul. 2007. Self‐Help Housing and Informal Homesteading in Peri‐Urban America: Settlement Identification Using Digital Imagery and GIS. Habitat International 31 (2) :141–64.Google Scholar
Ward, Peter M., Way, Heather, and Wood, Lucille. 2012. The Contract for Deed Prevalence Project: A Final Report Prepared by the Authors at The University of Texas at Austin on Behalf of the Texas Department of Housing and Community Affairs. http://www.lahn.utexas.org/Texaspercent%20Colonias/TDHCA.html (accessed January 30, 2015).Google Scholar
Way, Heather K. 2009. Informal Homeownership in the United States and the Law. St. Louis University Public Law Review 29 (1): 113–92.Google Scholar
Way, Heather K., and Wood, Lucille. 2013. Contracts for Deed: Charting Risks and New Paths for Advocacy. Clearinghouse Review 47:286–94.Google Scholar
Willis, David J. 2014. Real Estate Law & Asset Protection: For Texas Real Estate Investors. Houston, TX: Design.Google Scholar
Willis, David J. n.d. Executory Contract in Texas Real Estate. http://www.lonestarlandlaw.com/Executory.html (accessed January 30, 2015).Google Scholar
Wilson, Robert, and Menzies, Peter. 1997. The Colonias Water Bill: Communities Demanding Change. In Public Policy and Community: Activism and Governance in Texas, ed. Wilson, Robert, 229–74. Austin, TX: University of Texas Press.Google Scholar

Statutes Cited

Colonia Fair Land Sales Act, S.B. 336, 74th Reg. Sess. (enrolled) (Tex. 1995).Google Scholar
House Committee Bill Analysis for Committee Substitute Senate Bill 336, 74th Tex. Legislature, Regular Session, May 10, 1995.Google Scholar
Texas Business & Commerce Code (2012).Google Scholar
Texas Local Government Property Code, Chapter 212, H.B. 1823, 79th Reg. Sess. (enrolled) (Tex. 2005).Google Scholar
Texas Property Code (2012).Google Scholar
Texas Property Code, Chapter, 5. S.B. 198, 77th Reg. Sess. (enrolled) (Tex. 2001).Google Scholar