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The Forgotten Americans

Focus: Las Colonias

 

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How Colonias Developed

"There was a window of opportunity that created a loophole for many property owners to be able to subdivide their property without actually platting them," said Saul Ramirez, deputy director of the U.S. Department of Housing and Urban Development (HUD). "It created a situation for unscrupulous developers and landowners to take advantage of some of the poorest residents that we have in (Texas) simply because they were looking for an affordable housing opportunity."

  • Colonias were developed outside city limits because land was cheap and there was little zoning enforcement from county officials.
  • Developers purchased land, divided it into small parcels without calling it a subdivision and without putting in roads, water or electricity.
  • Lots are financed under a contract for deed, which is a rent-to-own form of ownership, but because the land wasn’t legally subdivided the deed to the property has no legal value.
  • Most residents cannot qualify for bank loans so developers charged $100 down and $50 per month and told prospective buyers that services were coming, but never built them.

 

Action Against Developers

In the past 10 years, the Texas Attorney General has filed nearly 45 lawsuits against colonia developers for deceptive trade practices, illegal subdividing and health nuisances.

Penalties assessed against colonia developers: damages=$11.5 million, civil penalties=$14.7 million, attorney's fees=$246,000,  restitution=$14,000, collected=$50,000.

The litigation has curbed substandard practices but fines against developers have gone unpaid because they had no assets that could be seized.

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