901 Bagby: Inside The Mayor's Office

Michael C. Nichols: Houston's Housing Challenges & Solutions

• Houston Mayor's Office • Season 1 • Episode 18

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Houston's Housing & Community Development Director opens this episode with a correction most people have never heard: when the federal government approved $314 million in disaster relief, no check arrived. The city earns that money by spending it correctly first — reimbursement is conditional, not guaranteed. That single clarification reframes everything Michael C. Nichols, Director of the City of Houston Housing and Community Development Department, goes on to explain.

Nichols walks Owen through how HCD actually operates — a city department funded almost entirely by federal dollars, distinct from the Housing Authority — and the hard lesson that still shapes the department: after Harvey, the state clawed back nearly half of a $1.2 billion allocation. That experience produced the compliance and finance infrastructure that governs every dollar today. The newly approved DR-24 package includes $41 million for homelessness initiatives and $100 million for permanent backup generators in Houston's water and sewage systems — a gap Nichols calls a genuine surprise. He also reframes affordable housing directly: this isn't a program for people in poverty. It's how teachers, police officers, and firefighters afford to live in the city they serve.

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SPEAKER_02

I think it's interesting to go back in the last two years since the Woodmire administration. 1,437 new multifamily housing units have been constructed, with 1,300 of those being affordable for people below 80% AMI. We expect those numbers to go much, much, much higher in year three of this administration.

SPEAKER_01

From City Hall in downtown Houston, number one bank inside the mayor's office.

SPEAKER_00

So this week, our guest is Mike Nichols, Director of the Houston Housing and Community Development Department. Their mission is to ensure Houston is a city where everyone has a home they can afford and a community where they can thrive. Mike, good to see you. Thanks for coming.

SPEAKER_02

Good to see you, and I'm glad to be here and love talking about the uh Department of Housing and Community Development. I love talking about our great employees. They're really working day and night for the citizens of Houston.

SPEAKER_00

And I want to talk about how you're working on that mission, too, as we move forward in this conversation. Um you did a long run in corporate America before all of this, before your nonprofit work. Can you tell us a little bit about how you got into public service?

SPEAKER_02

Goes back a long way. Uh I grew up in Birmingham, Alabama. And Birmingham, Alabama, during the 1960s was a complete failure. They failed to deal with the civil rights movement in a positive way, and it really hurt the city. Um during my research in college, researched this a lot, compared it to Atlanta and Houston. And what we found is that the business community really never stepped forward to lead the city. And so I've always had an interest in this idea that the business community and public government need to work together. So as a kid, young man, I was in the legislature, spent four years there, and then decided I had to make a living. And I moved to Houston, Texas, because it is the city of opportunity. Moved in 1981 to join a company, small company then called Cisco Foods. S Y S C O, um, Cisco Foods. And it was about 800 million in sales. And when I left in 2010, we had uh across 40 billion in sales. Uh it was a great time and ran another company called Grocery Supply for a couple of years. And um being in private business was wonderful. It was wonderful to be in Texas, wonderful to be in Houston, but I always had a drive to come back and do public service. And so once I retired, I was lucky enough to be asked to run the Houston Parks Board, which is a group that built out the bikeways in Houston. When I left, we had about 150 miles of bikeways, and it was a great learning experience about public-private partnerships. A few years afterwards, um the mayor uh at the time asked me to run the um a homeless coalition, the coalition for the homeless in Houston and Harris County. And I said, I'm not that interested in homelessness, but I will tell you I had a daughter who had moved to Seattle and she had become a homeless outreach worker dealing with elderly homeless women. And she'd call me every night and yell at me about what kind of country we left. I left her. And um, so when the mayor called and said, Why'd I do this? Of course, the answer was yes. And I ran the coalition for five years. Um, and that was a again a public-private um partnership, learned a lot more. And I retired from there, and about a month later, I got a call from John Whitmeyer saying, come join his administration as the head of the Department of Housing and Community Development and keep working on homelessness, but also broaden your work into the affordable housing arena. He wanted to really make that a better department, a department who knows how to spend its federal money wisely. And I thought, yeah, I'll do this one more time. And so I'm back at it. Um it's been about two and a half years uh coming in with the mayor, and um it's been a great learning experience working for the city. It's different than being in a nonprofit, different than being in a corporation, but has enough similarities that, again, the building of this public-private partnerships is so important to the success of government.

SPEAKER_00

What was it about the position and working for Mayor Whitmeyer that made you say yes?

SPEAKER_02

I think John Whitmeyer is a man who really cares about the city. He's a man of action and he wants to get things done. And I thought he would be a person with whom I could work and continue to build out the two things. Again, build out this make affordable housing more available in Houston because I see it as a huge need. Um it's now a political um statement that people are saying affordable housing is one of the most important issues facing the country. I I saw that forthcoming. And then, of course, this real focus on ending street homelessness was something that I really I wanted to be a part of.

SPEAKER_00

Uh since the mayor named you director, what has he asked you to focus on in terms of housing and community development?

SPEAKER_02

I'd say three things. One is to, as I said, make sure that we spend our federal dollars carefully, wisely, and make sure we get housing up and running as quickly as possible and make it affordable. Um we do have an affordability crisis in Houston. We're really one of the worst cities in the country with people in very low incomes, 30% and below uh AMI. And although we have a lot of affordable housing for 50 to 80 percent, we need a lot more. So that was one. Um I would say that really that's is about efficiency in the department. Uh the second is homelessness. Um when John was uh campaigning, he spent a lot of time talking to people experiencing homelessness. And when he came in, he said, Mike, y'all have done a good job over the years. You've housed more than 30,000 people uh in housing, but there's still so many people left on the streets, so many people suffering, so many people dying. Um and he did an amazing thing. And and then the third was just to make sure that as part of city government, as a total, we were efficient and spent our money well and really took care of the taxpayers' dollars.

SPEAKER_00

One of the things we've been doing on this podcast is introducing Houstonians to the various departments that exist in the city. And most people, you know, we recognize the big ones, the public works, the parks. But when we get into uh housing and community development, um kind of the overview. What is it that your department is basically in charge of? What are the sort of the central mission to let the people understand what the department does?

SPEAKER_02

First, I'd like to clarify something. We are not the housing authority, now called the Houston Housing Alliance HTX. That's a different organization. Now, the board of the housing authority is approved by the mayor that is appointed by the mayor. However, the department is part of really the federal government's housing programs, and they have two things they work on: housing vouchers and public housing buildings that they own. The housing department is a city department and it has much broader responsibilities. I would say overall, what I want the public to know is we are a department that uses federal funds wisely. Um probably the only other two departments that are run like ours would be the airport, which has a lot of federal funding, and the health department. The housing department's almost fully federal funded. We get almost no city dollars. Um we get some tourist dollars for affordable housing, but mostly it's federal funding. Over the last since 2015, since the hurricanes and storms in 2015, more than $1.1 billion has come through the housing department, federal dollars through the disaster programs. Further, we get about $50 million of federal funding every year through the Housing and Urban Development Department for affordable housing, for public services, and for housing for people with special needs. So, really, what our job is to use these federal dollars that are hard to spend extremely wisely. The second thing I want the public to know is how federal dollars work. We recently got a significant $314 million approval of disaster money called DR24 from the Hurricane Barrel and from the Derecho, $314 million. Um great number. I'm really proud of that. But you don't get a check for $314 million from the federal government. You get the right to use that money. And if you use that money according to their rules, they may and probably will, but may not fully reimburse you. So we our job is to take those dollars, use them wisely, and make sure the city gets reimbursed. And that's what we've done looking at the Winterstorm Ure, where we got $50 million going back to Hurricane Harvey, which we had to learn a lot of lessons from. That was a more difficult process. I was not here during those years, and either was Mayor Whitmire, but that was a much more difficult process. But we've learned a great deal from that.

SPEAKER_00

And how do those lessons uh kind of get passed down? I mean, obviously there's they're still there and there's clearly still more to learn, but but what we learned from that, how have you been able to kind of implement and keep that going?

SPEAKER_02

Aaron Powell One is we've got a great staff, and some of them were here during uh GR 17, the Harvey funding. Uh that was where this the state, federal government was going to give us about $1.2 billion. The state took about half of that away. And we had to learn a lot. We had to learn to be very careful with those dollars. One is not to start new programs. New programs just don't work. You need to have proven programs. And that's what we did with DR-21 and DR-24. We had proven programs. Uh the second is to make sure you have an outstanding compliance team. And our team is outstanding, and we're careful about how we do our bidding, how we do our programming, how we make it transparent, how we choose our contractors, and then we have a great finance team that makes sure they know where every dollar is spent so that it can be reimbursed.

SPEAKER_00

Because the goal, I imagine, is to maximize that money, regardless of what it is, because we don't want a disaster, but when we have one, it's nice to have the DRs and the funding that comes with it.

SPEAKER_02

Absolutely. Absolutely. Again, uh in DR 21, the Hurricane URI, we decided to spend that money on repairing damaged homes. About $40 million went to repairing damaged homes, about 10 went to our generator program to put generators in public facilities. Uh DR24, we did something because we had $314 million. Our commitment is $41 million toward homelessness, $100 million toward generators in our public facilities. And we're talking about not temporary generators, we're talking about permanent generators, natural gas generators in our per in our public facilities, including our surprise was they weren't in the major areas like our sewage system and our water system where they need to be.

SPEAKER_00

It's really all funded. Okay. So we have things like the disaster relief, but then community development block grants as well. So what are some of those tools that that kind of come into your bag that you can work with?

SPEAKER_02

Trevor Burrus, Jr.: So those are annual grants.

SPEAKER_00

Okay.

SPEAKER_02

They're about $50 million in annual grants that come from like uh community block grants, CDBG grants, there's Hopwa grants, which is housing for people with AIDS. Uh there are other public service grants. Um many of those will go toward our housing programs, which is building multifamily housing, making sure with that continues to grow for affordability. And some of those go to public service programs. Again, under this administration, and my focus is homelessness.

SPEAKER_00

How is the city adding affordable housing without changing the feel of the neighborhood?

SPEAKER_02

In Houston, we have great public-private partnerships. So we're doing our departments out there building housing. That's really inefficient. What we do is we partner with developers. What we do and we give them the gap financing that they need to build their affordable units, particularly multifamily affordable units. And with that gap financing, we get guaranteed affordability at certain levels. So many upper units at 30% below AMI, so many at 50% AMI, so many at 80% AMI. We also have mixed housing in the sense that it's not only people who are in poverty that may be living there, it's people who are paying market rent. That really brings everybody up. And the statistics are very clear that where there's a multitude of individuals with different economic backgrounds, the growth, even the lowest level people dealing with poverty, have great successes. How we deal with the neighborhoods is we always go outlook in the neighborhoods and ask what they want. The developers make sure they get the right kind of housing that is approved. We have major meetings with the neighborhoods. Every project is approved by the city council, which means that local councilman has a lot to say about these projects.

SPEAKER_00

So for anybody worried about uh lack of transparency or something, there are many, many public steps along the way going from an idea to completion.

SPEAKER_02

Absolutely. And I do want to say something that affordable housing is important. I think some people get a little confused when they think of affordable housing, they think of older housing that may belong to the housing authority, where it's really all people in deep poverty living there. Affordable housing is for everybody. It's our teachers, it's our policemen. And when we have a significant issue in Houston, we want our teachers and we want our policemen, we want our firemen to live within the city limits. It's very difficult to find affordable housing in the city. Whether you're again poor, 30% below AMI, or you know, a um somebody who's an 80 to 100% AMI, like policemen and teachers. So this housing is very important and we need much, much more. Um, Houston's been very successful in the past compared to other cities. We build about 35,000 units a year. We need to keep about building about 30,000 a year with our statutory rules, with the zoning rules, with the planning department. We want to make it easier and easier for people to build great multi-unit housing. That's the one thing. Single family housing is also very important. Again, the in the funding that we've gotten from the disaster relief, $40 million went to improve housing under DR 21, $50 million more under DR24, that's $90 million that would be spent improving housing. Some of those houses simply need roofs and other repairs, but many need to be completely rebuilt. Again, that's good for the people who are living there, but it's also good for our overall housing stock. The average house in a single-family home in Houston was built in 1974. We have to continue to build great single-family homes. We have to continue to allow them for all economic areas, particularly for people who need that higher affordability.

SPEAKER_00

And let's stay with that topic, the single-family homes and families and individuals. There are a lot of programs available. There's a lot of help available too. I mean, just go into your website. There are links for people, whether it's down payment assistance if they've had certain issues or repair assistance.

SPEAKER_02

Can we talk about some of that? Sure. I wish there was a lot more money in that. Sure. But I am very, very proud of our down payment assistance programs. They came out of disaster funding for the most part. Some of them are TERS funding, some of them came from bond funding, but most of them came from disaster funding. And what it is, it allows people who are in that 60% below AMI, who need a little help with their down payment assistance to get that help after, after they have found a home, after they've gotten a mortgage, after they've gone through special classes to make sure they know how to keep their home, to make sure they know what the expenses to expect, and not to be surprised with that. Then we had this down payment assistance, and that has been very successful, and people have have really thrived under that. Of course, I wish it was much, much more. I mean the need certainly outstrips the amount of money available, but it is a great program, and we've tried to find every dollar we can to put in those programs.

SPEAKER_00

How much ability do you have as a department to be creative to go find those sources of funding, or is it a lot of times just waiting for a federal government body to act, or unfortunately a disaster comes along?

SPEAKER_02

I've been to Washington either two or three times, at least three times since I joined the administration. Tom Whitmar has chosen top people in his intergovernmental affairs department. They know people in Washington. We have been to visit Hood, we've been to the White House. In fact, we're very excited about some potential programs coming out of the White House, Department of Justice programs, health and human services programs focused on homelessness that really were brought to the departments by the City of Houston talking about our successes. So we're very excited about the potential of those programs. We'll have to wait and wait and see, make sure we win those grants. They're highly competitive, but we feel good about putting in for those grants.

SPEAKER_00

And then in some cases, when that happens, um, right, we get some funding and then we get a chance to be a model for the rest of the country, for other places. Trevor Burrus, Jr.

SPEAKER_02

That's correct. In fact, the Department of Justice grants called the Model Cities Grant. And about half of those programs are items that we introduced to uh the department saying this is what you really need to fix homelessness. Yeah.

SPEAKER_00

For people listening to this show, to this podcast, they would need some help. Maybe their home is in need of repair. Is there a place they can go, someone they can call, a way they can get some of that help and find those resources?

SPEAKER_02

I would jump to our website. I think it's a very excellent website where it goes through that. I think it's very citizen-friendly to do that. Uh I'm looking at a uh uh report here. Uh Saturday, August 22nd, from 10 to 1, we're having the Houston Disaster and Recovery Expo. Uh the Houston, our department is partnering with ACB, Frostbank, and others on an event focused on disaster preparedness, recovery resources, and long-term resilience. And at that time, I think you'll get a chance to hear what grants are possible out there, what programs are possible, and also learn something about how to protect ourselves in the forthcoming hurricane season. You know, we don't want to have any more hurricanes, but what we do want to make sure is people are prepared and if they if the homes are damaged, we can move forward, although I wish it was much faster with that recovery.

SPEAKER_00

How important is outreach like that, these kinds of events for for the public?

SPEAKER_02

It's very important. We've um uh most recently we had an outreach out in the A-leaf community at their new um um community center. It's a beautiful community center. I had not been out there, really gorgeous. And we had several hundred people there, um some political leaders, but citizens, some who just needed help, some who were very interested in getting other folks' help, um, and some who were in great need. So it was a great meeting. People, when we put we did some work, we said, what if you had these disaster dollars, how would you spend them? Uh so we spent time on items like that, getting community input, but mainly saying, what can we do to help the citizens, many of whom who have been uh waiting for help for many, for many months.

SPEAKER_00

We talked about multifamily, single family, anything for renters that should be we should be aware of.

SPEAKER_02

Well, obviously, when we talk about multifamily, it is that's the runners. That is the runners. And again, Houston has um uh programs, and we have programs in many, many developments around the city that are focused on those renters. So people who are renters who have low income, um, we want to help you and we can get you to the right apartments. Um there it's again difficult, but we can get you to the right apartments if you need that and if you have those services.

SPEAKER_00

Um let me ask you, what's coming? This next year that's got you excited? Maybe an action plan or anything you want to share with us?

SPEAKER_02

I think the biggest thing that happens the next year, beyond the work on homelessness, which I'm really very excited about, is the implementation of the funding for DR21 and DR24. We'll see many more houses built. We'll see many more apartments planned and multifamily. I think it's interesting to go back in the last two years since the Whitmeyer administration. 1,437 new multifamily housing units have been constructed, with 1,300 of those being affordable for people below 80% AMI. 197 multifamily housing units are constructed, with 159 of those units being affordable to 80% and below AMI. 185, I'm sorry, have been reconstructed. 185 multifamily housing units have been rehabilitated with 144 units being affordable to those in 80% below AMI. 611 new family homes have been constructed for low-income families. 192 low-income and moderate income households were assisted with down payment assistance to purchase a new single-family home, and 62 low-income households assisted with single-family home and repair reconstruction. Obviously, with DR24 and DR21, we expect those numbers to go much, much, much higher in year three of this administration. It's a good start. If you go back 15, if you go back to 2015, it's even more. But again, it's very effective use of this federal funding, this hard-to-use federal funding.

SPEAKER_00

Yeah, we see that DR uh 21, 24, that money's going to be put to use. If we look a little uh further into the future, five years, ten years, what do you see on the horizon in terms of reaching that goal of affordable housing?

SPEAKER_02

Um one big project that we're working on, partnering with Harris County, is a Harris County-Houston affordable housing strategy. Um important philanthropic groups have given us funding for that strategy study. It will be released sometime in the fall. We expect it to have a significant impact on our future affordable housing. It's still about dollars. We're learning every day how to use those public-private dollars more efficiently and effectively. I want to go on and just say to the listeners you have representatives not only on the city council and in the mayor, but in Austin, your state legislators, and in Washington, your Congresspeople. You need to demand from them funding, real dollar funding for affordable housing, for people experiencing homelessness, and for mental health support. It has not been a priority of either Austin or the federal government, and we need to change that. It will only change if the voters demand that that's done. The city is the one who has to implement these with this work. We're we're the boots on the ground. But every day the look is to Austin and to Washington to say, where are you putting this funding? And are you wasting it on things you shouldn't be wasting on, or should you be making sure more of it goes to major metropolitan areas, particularly the city of Houston, to make our cities greater? Without great cities, Texas fails. Without great cities, the federal government and w and the United States fails. We need to work with our great cities, and Houston has the great potential to continue to be America's really model city. Uh as one per one writer said, the prophetic city. Prophetic not just in our commitment to diversity, but prophetic in our way we've handled serious problems like homelessness, affordable housing, and education.

SPEAKER_00

And being that model city. What's been your proudest moment so far in the last couple of years is your tenure as director?

SPEAKER_02

A couple of them. Okay. One is um on my desk I have a a uh uh piece of plastic wood that says the ambassador of quine. That comes from the Jerry Maglara movie. Um and the reason it's on my desk is I want to be the ambassador of Quine for the employees who work for me. I want to bring them to the best they can be. And I guess maybe the first thing I'd say that's been my proudest moment when I see my my people who work for me do great things and make a difference. Um that's been very important. I think the second moment came um after we made a commitment to buy uh 419 emancipation, that the mayor and his staff and a number of other people came forward to find city funding for that building and for the um uh um improvements in that building. That was very important to me. And what it said was that people understood good ideas are important. Funding, funding, funding, funding is the key. And I see that every day uh in people in the city of Houston saying, how do we get this funding and how do we make sure it's used wisely and not waste it one dime?

unknown

Yeah.

SPEAKER_00

Uh let me ask you, you know, we're in the summertime. It's a kind of an easy time for the city of Houston, but I know for you the work doesn't stop. What do you do in your spare time to enjoy yourself? You still swimming? I read somewhere that you love to swim. I read you like to write short stories. You still doing that stuff?

SPEAKER_02

I hadn't done as much writing as I'd like to do. The swimming I have to do every day because that keeps me sane. Uh, we have a wonderful cabin on Lake Livingston. Uh, those of you who don't know, Lake Livingston is Houston's third water source after Lake Conroe and Lake Houston. Lake Livingston is a beautiful place, and I'm able to go out and swim a mile every day in that lake with very little trouble. And that that's my happiest moment. I'm a big reader. Uh I have a book group that has lasted 25 years. I just finished a wonderful book called Um Um Culpability about AI, and that was fascinating. Um, I still like to write, but I haven't done as much. And probably my biggest time is spent, I had six grandchildren, wow, aged 15 to four months, and they uh live all over the country. I'd like them to come to Houston to live. Um, but they so far live all over the country. It's very funny. One of the things that they are most disappointed about Houston is not adequate affordable housing. And so a little like we did with the uh bikeways when people complain about not enough uh parks. We brought a lot of parks online with Houston with that. With this, maybe we'll bring enough affordable housing to bring my children or grandchildren back to Houston.

SPEAKER_00

I love it. Yeah, the little ones will run you around for sure.

SPEAKER_02

In September, I'll celebrate 50 years of marriage to um to a woman I met and married within 10 weeks. And uh she's really uh uh the greatest piece of my life that has allowed me to do this work, that has allowed me to do the work I did corporately. Um she's the brains behind me. Um she's the uh foundation on which I'm built, which our family has built, and which this work is built. Um The only bad decisions I've ever made are the ones where she hasn't been around to see these. So in September we celebrate that 50th anniversary. Uh, I would be remiss not to say nothing happens without Marsha Nichols.

SPEAKER_00

Congratulations. That is beautiful. Fifty years is quite a feat. Yes. At any time, but especially this day and age. Yes. All right, last question for you. We've talked about so much. If there was one thing that you want the people of Houston to remember from our conversation, what would that be?

SPEAKER_02

When you go walk around Houston, you can see many of the problems. Uh you can see the beauty too, but you also see the problems. You see people who are having mental health breakdowns on the street, you see trash on the street. It's uh it's disappointing. I want you to know that the employees in City Hall, the employees who work for and with John Whitmire really want to make a difference. Really want to work hard to make that difference. There's nobody loafing. Maybe that's what I learned from these two and a half years in city government that I didn't know in private in the private sector. These people are working hard. They're working day and night, they're working to be to make this city successful, to make your experience in the city as a citizen better, to make it economically viable for our children. And I think it's very important people know that, and maybe give a shout out to the city employees who are picking up your trash, who are fixing the potholes, who are directing traffic, who are stopping crime. Give them a shout-out and say thank you.

SPEAKER_00

They're all public servants, aren't they?

SPEAKER_02

Truly public servants are doing it for because of that. It's not for the accolades, it's not for the dollars, they're truly public servants. Without them, our society would not succeed.

SPEAKER_00

Well said. Mike, thanks for your time today. I'm really hoping. I've really enjoyed the conversation. Thank you.