McALLEN, Texas (Border Report) — Myssie Cardenas-Barajas has been a Realtor for two decades and she has watched the housing market go up and down along the South Texas border.
But over the past few years, she says rhetoric about the border, as well as special development laws that apply to areas near the Rio Grande, have adversely affected the construction of affordable homes in the Rio Grande Valley — a low-income region that she says desperately needs it.
“We have more costs incurred to our developers, which hurts our developers. So rather than encouraging them to develop affordable homes here we’re actually discouraging them,” she said.
“Unfortunately, there’s lots of perception, there’s misinformation, as well. The Valley has been rumored to be extremely unsafe the closer you get to the river,” Cardenas-Barajas recently told Border Report. “Yet McAllen is one of the most safest communities in the entire state.”
That’s the kind of information that Cardenas-Barajas says she wants to share with other Realtors at the National Association of Realtors 2023 Leadership Academy Class.
She is among only 20 Realtors nationwide selected for this leadership class, which begins on Sept. 1, according to NAR.
She says that puts her in position to serve on NAR’s executive board in the future.
“I’m hoping to absorb other peoples’ wisdom, knowledge, experience and bring it home. I’m hoping to share some of the experiences that we’ve been able to go through as well in the Valley,” she said.
While ensuring that developers put in proper roads, water access and sewer and other necessary infrastructure when building new subdivisions is absolutely important, she believes some of the so-called colonia prevention laws are overkill and are hurting the South Texas market.
All Texas counties within 50 miles of the border are subject to colonia prevention laws, which require developers to meet certain restrictions and put in certain infrastructure for every new residential subdivision they build. This is to prevent shanty-like border subdivisions that lack water and wastewater and roads from popping up.
“Existing state law effectively makes these properties unsalable, yet property owners are taxed for ad valorem purposes on the property’s full value,” according to the Texas Realtors Association website.
The lobbying organization represents Texas Realtors and says the fines of $10,000 per lot for violators discourage developers from investing in lands closer to the border, which lose value the closer they are to Mexico.
Jose Peña is a South McAllen builder whose company has owned property about a mile from the Rio Grande for nearly 20 years.
They want to subdivide the property and build 80 to 90 single-family “affordable homes,” but he says with the land worth less because of its proximity to Mexico and the state-required infrastructure costs, it’s just not worth the time and investments.
Each lot would be worth $45,000 to $50,000, he said, rather than the $70,000 he could get for the same-sized lot in North McAllen.
“It just hasn’t been right. The numbers don’t add up to develop it,” Peña said. “A lot of people, if they’re going to spend that kind of money they’d rather be farther north than here in South McAllen.”
That’s partly due to the perception of the dangers of living closer to the Mexican border.
“We’re very close to the border,” Peña said as he recently surveyed the track of land with overgrown grass and lilting cedar trees. “Being close to a border, the closer you get, it’s mentally bothering to people to be close to a border that they really don’t want to buy properties further south.”
Cimarron Country Club, in nearby Mission, Texas, recently declared bankruptcy, and Cardenas-Barajas says that will affect and lower area home prices on the border.
Peña grew up in South McAllen and says the area is dear to his heart.
He and Cardenas-Barajas were classmates at McAllen High School, and they’ve worked on development projects together before.
She says the low-income border region needs more affordable homes.
“The need for affordable homes is tremendous — more down here than any other area because of our poverty levels,” she said. “We don’t make the payrolls that San Antonio makes. We don’t make the payrolls that Dallas makes.”
As part of her leadership training class, she hopes to bring up potential solutions, such as tax abatements and incentives that could better spur development on the local and state levels, and to limit appraisal waivers that are causing price spikes that she says are unaffordable to many border residents.
An appraisal waiver allows qualified home buyers to skip the in-person appraisal process when buying a home. Lenders use data generated by an automated underwriting system to determine the value of the home based on the information collected from other recent home sales in the area. But Cardenas-Barajas says that hurts some buyers, like veterans, who are on fixed incomes.
Both also said they’d like to find a way to entice more buyers to consider properties near the border wall, with its 30-foot-tall presence, which they say, send many looking to buy further north.
A study this year by Texas A&M University found the average home price in the McAllen-Mission-Edinburg area spiked in 2020 during the pandemic and then decreased in 2021.
However, home sales have been up with 2021 levels spiking in June 2021 to over 400 sales in one month. This past June, home sales dipped below that mark but still remained above 2020 levels.