(c) Housing Assistance Council, 1998

ISBN 1-58064-084-2

Permission is granted ONLY to nonprofit community-based organizations to reproduce and/or adapt this document, and only for their own use.

VI. HOUSING REHABILITATION AND DEVELOPMENT: PROYECTO AZTECA'S SELF-HELP HOUSING PROGRAM

Introduction

Proyecto Azteca is a small, rural nonprofit housing development organization located in the Lower Rio Grande Valley, Texas. Created in 1991 by the United Farm Workers (UFW) and Texas Rural Legal Aid (TRLA) to improve conditions for low-income people in the Valley, Proyecto Azteca's mission is to build decent, affordable housing for colonia residents in Hidalgo County, especially farmworkers. It provides the materials, tools, training and financing to help low-income families build their own safe, affordable homes. Participation in Proyecto Azteca's self-help housing program has the added benefit of empowering colonia residents and providing them with skills to access new employment opportunities.

As of 1996 Proyecto Azteca has successfully built approximately 70 homes through its own self-help housing program. Its 1997 target is to build 36 single-family homes a year. These homes are all constructed by crews of participating families under the supervision of experienced trainers at the Proyecto Azteca office site. The homes are then transported and secured to the participating families. lots in scattered locations in the numerous colonias of Hidalgo County. The centerpiece of this program is the financial assistance that Proyecto Azteca secures for the families. After paying off any remaining balance on families. colonia lots, the organization arranges for a single low-interest standard mortgage to cover the cost of construction of a new house and the balance paid on the colonia lot. Each family obtains a warranty deed to the property in their name, with the opportunity to build equity in the property previously unavailable under the original contract for deed. The majority of this work has been funded through HUD's HOME program, which is administered at the county level, and the Texas Department of Housing and Community Affairs. Single-Family and Housing Trust Fund programs. More recently, in 1996, the organization has searched for and found additional sources of funding to continue producing affordable homes for colonia residents in Hidalgo County.

Proyecto Azteca's self-help housing program capitalizes on the resourcefulness, determination, and willingness of colonia residents to help themselves in building their homes. At the same time, the program provides important assistance that individual families often lack in building their own homes, which can make the difference between a "shanty" and a safe, decent house.

Overview of Hidalgo County and Proyecto Azteca's Target Area

Hidalgo County borders the Rio Grande near the southern tip of Texas and is located in what is known as the Lower Rio Grande Valley region. According to 1990 Census data, nearly 42 percent of Hidalgo County residents live below the poverty line. Only two other metropolitan counties in the nation have higher poverty levels. Hidalgo is also the seventh poorest county in the state of Texas. It historically has the highest unemployment rate -- over 20 percent -- in the nation among all metropolitan statistical areas.³²

The demand for affordable housing in Hidalgo County is high and far outweighs its supply. Economic speculation since the early 1990s has driven up the cost of land. Inflated land prices have long been a barrier to the availability of affordable homes in the county, making the colonia lots attractive to low-income residents. The short term cost of a low ($100) down payment on a $7,000 lot satisfies the buyers. immediate needs. However, the families often have very little money left over to actually construct their units, resulting in many of them living in severely inadequate housing units. In fact, the 1990 Census reports that nearly a third of the housing units in the county are substandard: 36.8 percent of the homes lack adequate heating; 28.7 percent lack cooling or ventilation; 21.2 percent do not have access to treated water; and 31 percent use unauthorized sewage disposal systems. Many of the homes residents build are made from plywood or particle board and often incorporate "found" materials. These homes also tend to be overcrowded. It is not uncommon to find a family of six living in a single room house with dirt floors. None of this data adequately describes the squalid living conditions colonia residents endure.

Hidalgo County contains over 55 percent of all existing colonias in the state of Texas. In fact, 798 distinct colonias were identified in Hidalgo County in 1996 by the Texas Water Development Board (TWDB), which tracks colonias statistics. In all, 135,770 people, 35.4 percent of the county. s population, live in colonia communities in Hidalgo County. As discussed earlier, Texas has taken a proactive stance in ending the proliferation of new colonia communities by curtailing the sale of unimproved lots. Although laws like the Economically Distressed Areas Program (EDAP) prevent developers from selling lots that lack water and sewer facilities, no laws address the appalling conditions in already existing colonias. Also, no laws prevent the purchasers of colonia lots from building and living in substandard or inadequate homes. In addition, the enforcement of existing laws continues to present difficulties, and new colonia communities do form occasionally.

The provision of basic water and sewer services to the colonias of Hidalgo County has long posed a challenge to the authorities and nonprofit advocacy groups working to improve conditions for residents along the border. According to a survey conducted by the Texas Water Development Board in 1992, Hidalgo County needs $162.9 million to meet current and future water and wastewater needs, and $117.3 million to fund projects for existing colonia homes throughout the Valley. Valley Interfaith, an organization of parishes and congregations, affiliated with the Texas Industrial Areas Foundation, has organized residents and advocated for the provision of water and sewer services for the colonias in the Valley for several years. It has taken the lead in conceiving, writing, and pushing the passage of legislation to finance the building of water and sewer services for the colonias. As a result of its efforts, Texas voters have approved over $150 million in state bond funds for the creation of colonia water and sewer systems. Of this, the Texas Water Development Board expects to spend up to $50 million in the Rio Grande Valley. Despite this, many residents of Hidalgo County colonias will not have access to water and sewer facilities. Numerous other nonprofit and advocacy organizations are also active in the Lower Rio Grande Valley and focus on a variety of other issues affecting colonia residents such as education, health, and housing.

Agriculture has long been part of the economic engine in Hidalgo County. Many farmworkers and migrant farmworkers make their home in the colonias of Hidalgo County. In fact, the Lower Rio Grande Valley is home base for significant numbers of migrant farmworkers. According to the 1990 National Agricultural Workers Survey (NAWS), authorized farmworkers have a median annual income of $5,000-$7,000. The 1990 Census reports the median household income as $16,703 in Hidalgo County. The United Farm Workers' union (UFW) is actively involved in organizing the farmworkers and addressing some of their needs. Proyecto Azteca was born out of UFW's concern for the housing conditions of many of its members, and the belief that tackling farmworkers' housing needs would help begin to solve many of the other problems its members faced including health, child care, and empowerment issues.

The United Farm Workers union in the Lower Rio Grande Valley had a history of organizing farmworkers to participate in the union. Their close relationship with the farmworkers drew the union organizers' attention to the substandard living conditions of the workers and their families. UFW decided to begin dealing with the housing needs of its constituency and, together with Texas Rural Legal Aid (TRLA), developed the concept of a self-help housing program.

In order to be successful, the leadership of UFW felt that their colonia housing program needed to incorporate true community participation and empowerment ideals. The housing program also needed to address the basic land tenure issue facing colonia residents, who purchase their lots under a contract for deed. In addition, the housing program needed to be affordable to the very low-income colonia population, in particular UFW's farmworker constituency. A creative merging of these directives resulted in the creation of Proyecto Azteca, a nonprofit housing development organization, focused on meeting the housing needs of colonia residents in Hidalgo County.

UFW and TRLA initially sought direct community involvement in Proyecto Azteca by appointing colonia residents to the organization's board of directors. The initial board of directors was comprised entirely of colonia residents who were UFW members, ensuring that farmworker concerns were appropriately addressed. In fact, farmworker applicants to Proyecto Azteca. s housing program receive priority consideration. In addition, the design for a Proyecto Azteca home was developed by community residents with assistance from a housing consultant. Adopting a single design also results in lower costs because it takes less time to familiarize participating families with the floor plan. Participants themselves construct their own houses, with supervision and assistance by trained construction supervisors. Participating in the construction of their own home is an empowering experience for colonia residents.

The centerpiece of Proyecto Azteca's housing program involves addressing the complex land tenure issues that plague most colonia residents. The purchase of lots under contracts for deed forces colonia residents to struggle to better their living situation within the framework of an exploitative system that is designed to maintain their powerlessness and poverty. Since the developer legally owns the lot sold under a contract for deed, any improvements on the lot actually benefit the developer, not the colonia resident. In addition, a single missed payment can result in the loss of the resident's home altogether. The developer can also capitalize on any minor infraction to compel the resident to pay large penalties or commence making lot payments from the very beginning by rescinding any previously made payments.

Proyecto Azteca steps in to break this cycle by offering to refinance colonia lots and convert the contract for deed into a more standard warranty deed. The organization selects colonia residents who owe no more than $5,000 or $6,000 on their lots and are interested in participating in Proyecto Azteca's self-help housing program. Once the family has gone through the process of constructing their own home, Proyecto Azteca combines the lot payment with the cost of the new home and provides the participating family with a single, low-interest mortgage payment. The single mortgage usually totals approximately $22,000. The house itself costs the participating family $16,000, including the cost of materials and the construction trainer's fees. Each family is required to contribute 100 percent of the labor towards constructing the house. This contribution of sweat equity significantly lowers the cost of the unit. The other $6,000 (or less) goes toward refinancing the colonia lot and converting the contract for deed into a warranty deed. Ultimately, the participating family makes payments on a single mortgage of $22,000 (or slightly less) with 3 percent interest over a 20-year term. The maximum monthly payment rarely exceeds $125. Ideally, Proyecto Azteca would like to offer colonia residents the same mortgage at zero interest, as they have done in the past, but limited funding and their own operational expenses do not permit this.

Proyecto Azteca built its first home³³  with $15,000 in philanthropic grants and a team of seven people, led by Jesús Limón (now Proyecto's Executive Director) as the construction specialist paid for by Motivational Education and Training (MET). Subsequently, McAuley Institute (a national nonprofit intermediary organization) loaned the group $30,000 to begin construction of four more houses. Today, Proyecto Azteca raises funds primarily through HUD's HOME program (through Hidalgo County as well as directly from the state) and the state's Housing Trust Fund, administered by the Texas Department of Housing and Community Affairs (TDHCA). Since Proyecto Azteca is a designated Community Housing Development Organization (CHDO), some of the HOME funds have been pass-through funds provided by the Housing Assistance Council under a CHDO Technical Assistance contract. Proyecto Azteca also successfully obtained an Affordable Housing Program (AHP) grant from the Federal Home Loan Bank of Dallas in 1996. In addition, the Rural Housing Service of the U.S. Department of Agriculture has awarded Proyecto Azteca a Section 523 Technical Assistance grant for planning self-help housing projects.

More recently, the organization has also been funded by the State of Texas to operate a self-help center.³⁴  These multiple sources of funding contribute to the overall stability of the organization and allow Proyecto Azteca to explore the development of new and innovative approaches for addressing the needs of colonia residents in the Rio Grande Valley.

The most important part of the program, from the perspective of the participants, is building the houses. According to Proyecto Azteca staff, the three critical ingredients responsible for the success of the construction program are: an efficient, well designed, modest house plan; construction training and professional supervision of organized groups of families working on building the units; and the sharing of resources and team work of participating families. In addition, the provision of adequate tools to construct houses properly, and the provision of funds to purchase quality materials, ensure that the homes built are decent and well constructed.

The house plan currently utilized by Proyecto Azteca was developed by colonia residents themselves with assistance from a qualified architect. The Proyecto house is a wood-frame unit occupying about 816 square feet with three bedrooms and one bathroom. The house is designed in increments of 2 feet for ease of construction. The simple, standardized floor plan makes it easy for participants to familiarize themselves with the design and leads to efficiency during construction. The unit is equipped with energy efficient devices like ceiling fans to help homeowners reduce heating and cooling costs. Participants customize their dwellings by picking the colors for the internal and external paint and choosing their own fixtures. Proyecto Azteca has devised a set of eligibility criteria to select participating families:³⁵

• Eligible families must have a household size of 4-7 persons.
• Household income should be a minimum of $4,500 per year and should not exceed a maximum of $13,500 per year.
• An adult member of the household must participate in the construction of homes for at least the three-month period required to complete a set of units.
• The applicant family must be living in substandard or overcrowded housing. (This is evaluated by making a home visit and inspecting living conditions.)
• The applicant family must be able to afford a house payment of $100 per month.
• The family should constitute a good credit risk. (This is principally defined as the family being current on their existing house or lot payments.)
• Unless the existing house or lot is located in a colonia within a "qualified census tract" as defined by the Department of Treasury for the mortgage revenue bond program, the applicant must certify that his or her family has not resided on the property longer than five years, and that the housing structure was not intended as a permanent residence but merely as a temporary shelter.

Once the families are selected, they are organized into groups of three with a construction trainer and supervisor. (The trainers employed by Proyecto are often graduates of the organization's program and have previously constructed their own homes through Proyecto Azteca. This brings a certain level of comfort to new participating families. The trainers are able to relate their own experiences to participating families and supply encouragement and counseling when needed.) One member from each family is provided with preliminary training in all aspects of construction work, including plumbing and electrical wiring. Each group then works on constructing three units together. They work in cycles, completing all the frames first, followed by the skin, and then the rest of the unit, under the supervision of Proyecto's construction trainers.

Proyecto Azteca provides all the tools required to construct the homes and purchases all the materials together for all the units under construction, which proves economical for the families. All homes are constructed on the site next to Proyecto Azteca's office, minimizing loss of materials. While the homes are being built, families develop a relationship with each other and with Proyecto staff. They are also provided with counseling on maintaining their homes and on managing finances to ensure timely payments to Proyecto Azteca.

The houses take approximately three months to complete. Completed homes are then transported to the participants. lots and anchored onto piers.³⁶  The final water, sewer, and electrical connections are completed on site by professionals. The occasion of transporting a completed unit lends itself to a fiesta celebration, reinforcing the sense of accomplishment felt by participating families. Then the cycle begins again.

At the time of this study, Proyecto Azteca was working with two groups of three families simultaneously. It hopes to expand to working with three or four such groups. Proyecto has succeeded in constructing about 30 homes a year. Despite not having a special outreach program, Proyecto Azteca's reputation has been responsible for its waiting list swelling to over 300 applicants. Completed units and participating families have proved to be adequate advertising. The "factory site" approach enables Proyecto to provide homes to families in any colonia within Hidalgo County. In addition, this scattered site development approach has allowed Proyecto to steer clear of subdivision-type developments and their accompanying costs and risks.

Figure 4a: Proyecto Azteca Homes Under Construction

Lessons Learned and Replicability

Since its beginning in 1991 through 1996 Proyecto Azteca has successfully developed over 70 homes. It has succeeded in overcoming the land tenure problems faced by colonia residents and providing very low-income families the opportunity to acquire decent housing. Its self-help housing program has a number of lessons to offer other groups interested in serving colonia residents.

Proyecto Azteca attributes its success to strong community-based support for its mission and its close relationship with program participants. Directed and controlled by a thirteen-member Board of Directors comprised of farmworkers and colonia residents, the organization ensures that the priorities of the people it exists to serve are always at the forefront of its agenda. In addition, Proyecto Azteca's self-help program works primarily because of the determination and resourcefulness of colonia residents who are committed to improving conditions for themselves and their families. Selected families often work tirelessly to complete their units ahead of schedule. They are also Proyecto's best emissaries within the colonia communities, recruiting other colonia residents who may qualify for the program, and exerting pressure on their peers to comply with Proyecto's loan repayment schedule.

Much of the success is also dependent upon the personal relationships cultivated by Proyecto staff and construction trainers with participating families. Careful counseling prevents delinquencies and helps families maintain their houses in good condition. Personal relationships help families trust Proyecto staff and facilitate early intervention in the event of a crisis. As mentioned earlier, the construction trainers are often former participants, and are able to relate their own experiences to the families and provide needed encouragement.

Another key lesson Proyecto offers is seen in its approach of solving the existing problems of land tenure in order to provide decent housing units. Assisting families to convert their lots from contracts for deed to actual ownership enables families to escape the exploitative system instituted by private developers, and begin to build equity in their homes. In addition, by starting small and staying focused on its goal of providing decent housing, and then expanding the scale of production of units, Proyecto was able to avoid the possible pitfalls of overextending itself or its resources.

In the process of developing a self-help housing program for colonia residents, Proyecto Azteca identified the critical gaps that prevent families constructing their own units from ensuring their homes are of good quality. While colonia residents often undertake the construction of their own units, they lack the resources to purchase the appropriate tools and materials required for standard construction. Proyecto provides these resources. In fact, the success of this approach has resulted in Proyecto Azteca being chosen as one of the five self-help centers designated by the Texas Department of Housing and Community Affairs. As a state-designated self-help center, Proyecto has plans to create a tool lending library by the end of 1996, and provide homeownership and construction classes to colonia residents. It also plans to expand its activities to the development of a model subdivision located in the Rio Grande Valley Empowerment Zone prior to completing its state self-help center contract in 1997.

Proyecto Azteca's approach is clearly replicable. In fact, other nonprofit organizations working in the border colonias, particularly those designated as self-help centers, have visited Proyecto Azteca to study its program for possible replication in their own areas.

Next section

Table of contents