Affordable Housing and Entrepreneurship in the Lower Rio Grande Valley
October 7, 2011
Weslaco, Texas

Valerie Piper from the Department of Housing and Urban Development and Bobby Calvillo of Affordable Homes of South Texas discuss successful government programs that have enabled broader access to lower-cost capital for home buyers.
Lisa Prieto of the University of Texas-Pan American suggests a task force organized by the university to facilitate greater collaboration among valley stakeholders.
The lower Rio Grande valley of Texas, encompassing four counties on the U.S.-Mexican border, is plagued by high unemployment, low wages and limited access to decent housing. The region's 1.3 million people face poverty and limited opportunities for entrepreneurship. Banks and other financial institutions have traditionally been reluctant to lend to the valley's residents, many of whom lack real assets and have poor credit scores. Whether they are looking to purchase a new home, retrofit an existing structure or start a small business, residents of these underbanked communities face a significant hurdle in trying to tap the capital markets.

To address the region's access to capital, the Milken Institute, in conjunction with the Ford Foundation, convened a group of community development organizations, investors, government leaders, academics and private-sector practitioners. Other participants included the U.S. Department of Housing and Urban Development, the Community Development Corporation of Brownsville, the University of Texas Pan American, Homewise, EDCO Ventures, the U.S. Department of Agriculture and many other engaged organizations. Their representatives discussed incentives and models to re-engage the capital markets in lending to valley residents, promoting economic growth and job creation.

The Ford Foundation, which has a strong history of investment in social development, gave an overview of its long-term goals for the region: creating living-wage jobs and developing housing, transportation and land-use opportunities. They hope to achieve these aims by bringing together regional stakeholders to work together to remove barriers to development.

Because Lab participants represented a diverse set of interests in the lower Rio Grande valley, much of the conversation focused on how development efforts could become less fragmented and more unified. Currently, most of the innovative community development projects operate in independent silos; there is no comprehensive valley-wide initiative in place to coordinate the key stakeholders.

The Lab served as a useful platform for launching a more holistic development plan. Tangible next steps were identified, including the creation of a new valley council that will coordinate various group efforts, as well as other related policy and economic recommendations to leverage public incentives to create more attractive lending policies.

Results from the Lab, including recommended next steps for implementation, can be found here. For more information, contact Caitlin MacLean, manager of Financial Innovations Labs, at