The Real Estate Crime of the Century

Over the past 30-40 years, real estate developers in Houston have planned and built entire neighborhoods that were destined to flood.  There are two giant reservoirs located on what used to be the far western edge of the Houston metropolitan area.  These are the Addicks and Barker reservoirs which were built in the 1940’s after severe floods almost wiped out central Houston in 1929 and 1935.  Two miles-long earthen dams on the eastern edge of the reservoirs contain rain water that would otherwise flow into Buffalo Bayou which snakes through some of the priciest real estate in Houston and its suburbs before dumping into the Houston Ship Channel.  The HSC itself was once the easternmost part of the Bayou until it was dredged and channelized to allow massive cargo ships to dock close to downtown Houston – almost 40 miles inland from the Gulf of Mexico.  The map below shows a much smaller Houston and the plan for the Addicks and Barker reservoirs as well as a White Oak reservoir and two canals that were never built.

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Most of the time the Addicks and Barker reservoirs are empty and house golf courses, soccer and baseball fields, shooting ranges, hiking trails, model aircraft runways, dog parks and host of other wonderful recreational uses.  Major streets even run through them. But they are designed to flood in a big storm.  When the Army Corps of Engineers designed and built them, the government only bought land behind the dams up to the then-existing 100 year flood plain.  However, if water ever reached the spillway elevation on the dams, it would flood areas far beyond the government owned land.  So, probably because it was cheap and relatively close-in, several developers snapped up the land outside the 100 year flood plain and built neighborhoods, shopping centers and commercial buildings in an area that would flood if water in the reservoirs went above the 100 year flood plain.  These neighborhoods include parts of such high-profile areas as Cinco (make that Sinko) Ranch and Kelliwood.  The map below shows areas that were built in the basin of the Addicks reservoir that will flood at various elevations.  The purple area is government-owned land.  But every area that is colored will flood if the water reaches the spillway.

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Red doesn’t know what kjnd of disclosures were given to purchasers, but plenty of homeowners have come forward claiming that they never knew that their homes would flood if the reservoirs filled up.  Red does kind of suspect that might just be the case.  He also suspects that if a prospective home buyer had been told, “By the way, if that there reservoir ever fills up, you’re gonna be under 6 feet of water.  Just thought you’d like to know”, many buyers might just have considered other options.

Then along comes a Hurricane Harvey and the worst possible scenario plays out.  The masters of the dam are faced with a dilemma.  Do we flood more houses and businesses behind the dam – where stuff never should have been built anyway – or do we flood homes and businesses along Buffalo Bayou – where stuff probably should not have been built either?  Hands were tied to some degree as the reservoirs filled up.  Uncontrolled releases downstream were unacceptable and the prospect of the dams failing was just too dire.  The folks below the dams were flooded – but so were the homes built where they never should have been in the first place.

And that folks, is the real estate crime of the century.

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