HUD Archives: News Releases

HUD No. 04-088
Brian Sullivan
(202) 708-0685 ext. 7527
For Release
September 14, 2004

Pharr and the state of Texas recognized for accomplishments in the Colonias

WASHINGTON - The Department of Housing and Urban Development today announced 14 communities are receiving HUD's Community Development Excellence Award for their outstanding work in using Community Development Block Grant funding to create better communities and to improve the lives of their lower income residents. HUD presented the awards during a two-day national conference in Washington to celebrate the 30th anniversary of the Community Development Block Grant Program.

Pharr was honored for its accomplishments in addressing the needs of colonias residents in Las Milpas. A summary
of its achievements is at the end of the release.

The State of Texas' Office of Rural Community Affairs, Dept. of Housing, also received a HUD Community
Development Excellence Award for its funding of more than 300 projects to improve living conditions in the colonias and to assist residents in becoming homeowners. It was one of only two awards presented to States.

"These 14 communities are outstanding examples of how CDBG works," said HUD Secretary Alphonso Jackson. "In a climate where results and performance count, these communities, and many others like them, are doing wonderful work building better neighborhoods and creating greater opportunities for their lower income residents."

In selecting these communities, HUD's Office of Community Planning and Development solicited recommendations
from the Department's field offices around the country. Each winning nominee represents a CDBG-funded project or initiative that has been completed, has completed a major phase, or has a proven track record of improving communities and benefiting the people who live in them, specifically lower income residents.

Background on CDBG

When President Gerald Ford signed the Housing and Community Development Act of 1974 into law, state and local leaders around the country got a powerful new tool to help stimulate community development and job growth - the Community Development Block Grant Program. Thirty years later, CDBG continues to help more than a thousand communities to do what they could not accomplish themselves.

For the past 30 years, CDBG has awarded over $108 billion to state and local governments to target their own community development priorities. While, the rehabilitation of affordable housing has traditionally been the largest single use of the grants, CDBG is also an important catalyst for job growth and business opportunities. CDBG funds
are distributed by formula around the country based on a community's population, poverty levels, growth rate, housing overcrowding and the age of its housing stock.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as
enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet

Pharr, Texas

Las Milpas

In 1986 and 1988, the City of Pharr annexed the two sections of an area known as Las Milpas, one of the first "colonia" subdivisions in south Pharr. The Las Milpas area was known as the largest Colonia in South Texas with a population of 9,564 and more than 2,000 homes. At that time, Las Milpas was a substandard subdivision that lacked many of the essential infrastructure improvements such as drainage, sewer, water and street paving. The area's
high poverty heightened the need for social, health and economic services, all sorely lacking. The majority of the
Las Milpas residents (84 percent) earn less than 30 percent of the area's median income.

Colonias originated in the early 1940's in rural areas of the county because of the lack of adequate housing and development standards. During the 1970's and 80's, the number of colonias grew rapidly as developers took
advantage of this. They knew there was a high demand for residential lots with affordable payment terms. While the downpayment might have been considered affordable at $10-to-$50, the financing terms and land the families were buying were not. The interest rates were extremely high, with the majority of these transactions on a "Contract for Deed" basis with no underwriting criteria. Most of the housing was developed in low-lying areas with no flood

Since its annexation, the City of Pharr began to make significant infrastructure improvements to upgrade the area with more $37 million dollars of CDBG funds directed to this ongoing project. Potable water and sewer services were provided to more than 4,450 families in the area, and as utility infrastructure improvements utilizing CDBG monies
were put in place, the City began funding paving and drainage for six neighborhoods. At the same time, the City provided various facilities in the area including a fire department substation, a Boys and Girls Club, a community center, and a police substation.

In 2000, the City of Pharr received approval of a Section 108 Guaranteed Loan to provide improvements to the Las Milpas/Pharr Industrial Park that has provided for the economic and infrastructure development needed to stimulate the local economy. Combined with other federal funding, the Industrial Park and the designation as a Free Trade
Zone serves as a catalyst to attract private enterprise both north and south of the border, thereby boosting the incentives for employment in Las Milpas and surrounding South Texas communities.

Today, the Las Milpas/South Pharr area is no longer considered a Colonia, as it has now become a growing
community with pride. Latest Census figures show a population of more than 17,000 with 3,300 housing units. With this increase in population, the needed infrastructure in place, ongoing economic development and social services available, many new businesses have opened in the area, thereby creating even more jobs and providing goods and services. In August 2004 the area welcomed its first Jack in the Box Restaurant. All it took was one national chain
to open its doors in Las Milpas, and now others are following in its footsteps.


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