How an ESG-Guided Strategy Transformed a Houston Community
- Apr 22, 2020
Affordable housing can bring meaningful, long-lasting economic benefits to a community in the form of increased spending power, increased hiring, and increased taxes and other revenue for local governments. The creation and preservation of affordable housing can also be part of a successful Environmental, Social and Governance investment strategy.
The NHP Foundation recently completed a report detailing a five-year study of the community and resident impact of the landmark preservation and redevelopment of Cleme Manor Apartments in Houston. The report highlights the importance and potential ROI for opportunities that align with environmental, social and governance or ESG investing principles.
In 2014, Mayor Sylvester Turner and the city of Houston sought a multimillion-dollar grant to redevelop Cleme Manor Apartments, an aging and poorly managed low-income housing project located next to an elementary school and community park in Houston’s Fifth Ward. Local officials suggested conditions at the property were causing higher crime rates and lower academic achievement, resulting in discussions to shutter the local elementary school. The city’s belief was that by transforming the property and renovating the park, crime would decrease, academic scores would rise, and community outcomes would improve.
In 2014, NHPF received $41 million in funding to renovate Cleme Manor. PNC Bank, BBVA Compass, the U.S. Department of Housing and Urban Development, the National Affordable Housing Trust, the Texas Department of Housing and Community Affairs and the City of Houston provided funding.
The project sought to reduce crime and retain neighborhood academic opportunity through NHPF’s ESG. ESG investing focuses on three central factors measuring the sustainability and ethical impact of an investment from a company or business: challenges, solutions and results. These criteria help to better determine the future financial performance of companies and organizations (return and risk).
These were some of the problems that Cleme Manor was facing:
- Resident stress: crime, drug activity, prostitution, violence and deteriorating conditions.
- High crime rates: 206 total security and/or police calls; 37 aggravated assaults and/or assaults calls; three deadly weapons/assaults calls; 14 property crimes calls; 15 drugs or suspicious activity calls.
- In 2014, school district officials were considering closing Nathaniel Q. Henderson Elementary School due to poor student outcomes resulting in lower enrollment. About half of Henderson’s students lived at Cleme Manor. Henderson had lost about 150 students to other campuses during 2014, and was operating at about half capacity.
These were the key solutions that NHPF implemented:
- NHPF renovated housing units, with more efficient HVAC systems, water heaters, windows, drywall, appliances and doors; installation of a new play area; and rehabilitation of the leasing office, community space and laundry facilities.
- Nearby Finnigan Park and its Community Center, where a $35 million renovation was just completed, provided after-school and summer youth programs.
- NHPF’s Asset Management Team partnered with law enforcement to identify factors responsible for increased criminal activity and local police conducted a sting operation to combat and reduce crime in the community.
- NHPF installed a 24/7 video camera surveillance system and routinely placed courtesy patrol officers around the property.
- NHPF hosted a rededication of Cleme Manor, attended by Councilman Jerry Davis, directly following implementation of the aforementioned police crime-reduction strategy. This public display of NHPF’s commitment to reducing crime, combined with the renovation, demonstrated community buy-in and investment convinced the city that Henderson Elementary School would be able to produce better student outcomes. As a result, the school was kept open, despite public skepticism.
These were the measurable results produced for Cleme Manor residents and the surrounding neighborhood:
- Residents feel safer due to a 27 percent drop in overall crime in the last four years and the continued presence of the neighborhood elementary school.
- In 2018, there was a 69 percent decrease from 2014 in security and/or police calls; aggravated assaults dropped by 81 percent; property crimes fell by 72 percent; and drugs or suspicious activities decreased by 40 percent.
- Crimes reported per resident also fell as occupancy increased, from 1 crime for every 8 residents in 2014 to 1 crime for every 27 residents in 2018.
- Henderson Elementary School remains open with an attendance rate up to 95.4 percent.
- There was a 12 percent decrease in economically disadvantaged children and 9 percent decrease in at-risk children.
- Disciplinary actions have dropped by 98 percent.
- The percentage of students approaching grade level in mathematics has increased by 15 percent.
Cleme Manor’s transformation resulted in measurable success. Residents’ quality of life drastically improved and crime continues to decline. These successful efforts helped keep the local elementary school open, providing another linchpin in the revitalization of the community. NHPF also engaged in necessary due diligence, community outreach and meaningful partnerships with residents of Cleme Manor, local law enforcement officials, community leaders such as Congresswoman Sheila Jackson Lee in the Fifth Ward, and other stakeholders involved in this process. These steps were crucial in updating the local neighborhood, an achievement which has transformed the lives of Cleme Manor’s residents and the community. ESG principles will continue to inform NHPF’s development strategy moving forward.