In 2013, 4,557 people in the College Station-Bryan Metropolitan Statistical Area visited a Credit Access Business (CAB) and used payday and auto title loans to meet their need for emergency funds. They borrowed $6 million and paid $4 million in fees, according to the Texas Office of Consumer Credit Commissioner.
Payday loans are small cash advances with two-week terms — with interest and fees applied. Payday and auto title loans offered by CABs are made by non-affiliated third-party lenders with the CAB acting as a loan broker guaranteeing the loan. Profit is derived from fees charged for their services. In 2013, the average amount Texans borrowed per loan was $463.
The City of College Station is experiencing almost unprecedented growth stemming largely from the expansion of enrollment and research and development budgets at our institutions of higher education. These changes bring many opportunities for business development, employment, new retail experiences, and expanded regional and national recognition.
They also bring many challenges. We live with, and try to adapt to, the pressures of increasing traffic congestion and the transition of many commercial and residential neighborhoods.
The rapid expansion of rental properties into neighborhoods zoned for “single families” and long thought to be designed mainly for traditional owner-occupancy is the focus of intense current discussion by many residents and rental property owners. In College Station, the definition of permitted occupancy in what are designated as “Suburban Residential” and related similar zones is “no more than four unrelated individuals.”
A retiree on a fixed income, who cares for her elderly disabled mother, lives in an older home built in 1950. Vibrant colors and the smell of fragrant roses fill the lush yard — evidence of years of hard work. However, the signs of structural decay and failure inside the tidy home are evident. A deteriorating foundation has caused the floors to be uneven, creating unsafe conditions for the elderly resident.
What can this family do to fix these problems and make their home a safe place to live? Are repairs even possible? Is any help available?
After months of searching, John and Jane Smith found their dream house, quickly made an offer and signed a contract. Then, after spending considerable cash on inspections and buying an option period, the Smiths realized that for their dream to become a reality, they needed a loan. Unfortunately, their potential lenders told them the monthly payments would be beyond their income. The lenders all repeated the same thing:
“We’ll approve you for a loan but not one big enough to buy the house you have under contract.”
The Smiths’ hearts sank. They spent $550 on an option period and inspections — for nothing. Although John and Jane are fictional, the scenario is familiar to countless people every day. Fortunately, those mistakes can be avoided.
The Center for Housing Policy recently released an eye-opening report indicating that about 10 million working households in the United States spent more than half their income on housing. This “severe housing cost burden” affects nearly 25 percent of all rental households. Although Texas enjoys relatively low housing costs, its working households experienced one of the nation’s most significant increases in this cost burden from 2008 to 2009.
In College Station, only about 35 percent of total households are estimated to be owner-occupied, which is significantly less than the 68 percent across the state. Obviously, this is due in part to our large student population, but it’s also related to local incomes and the availability of affordable housing. Nearly 15 percent of area families live below the poverty line, and for these families, even houses that sell for $100,000 or less — which represent only 6 percent of sales in recent years — can be unattainable.