Bureaucratic deadwood
Jan. 29, 2006,
A state commission to curb homebuilder abuses proves to be a deck stacked in favor of the industry it is supposed to regulate.

Copyright 2006 Houston Chronicle

When Texas Comptroller Carole Keeton Strayhorn issued a report last week criticizing the Texas Residential Construction Commission as a shield for politically-connected homebuilders, she could have been reading from a column the Chronicle's Clay Robison wrote last March.

Headlined "No place like home for this cuddly Austin lapdog," Robison's piece characterized the creation of the TRCC as a boon for homebuilders who had contributed millions of dollars to state lawmakers. In return, the law creating the commission required aggrieved homeowners to go through a costly, time-consuming arbitration before they could take legal action against contractors. It also limited damages that plaintiffs could receive.

The commission itself has no enforcement powers to discipline industry violators. Law requires the nine-member body to include four industry representatives and two "public" gubernatorial appointees. Gov. Rick Perry chose to appoint as a public member an executive of Perry Homes, owned by Houston megabuilder Bob Perry. He's not related to Gov. Perry by blood but linked through a $100,000 campaign contribution he gave the state's top executive less than a month before the TRCC appointment.

After announcing her decision to run against Perry as an independent, Strayhorn has toured the state in person and on TV firing one critical salvo after another at the incumbent. Her TRCC survey followed a request last August by Rep. Todd Smith, R-Euless, for analysis of the agency's impact on Texas homeowners. Although the report does not attack Perry, it fits in with her campaign promise to crack down on he control of state government by wealthy special interests.

According to Strayhorn, a survey of homeowners who brought complaints to the TRCC revealed that in 86 percent of the cases homebuilders failed to repair construction defects, despite the fact the problems were verified by mediators. "If our standard is giving all Texans a fair shake, then this agency falls far short of that goal," Strayhorn declared. Although the rationale for creating the TRCC was to eliminate costly and lengthy litigation, the comptroller blamed the commission's lack of enforcement power for forcing homeowners to do just that.

Strayhorn's recommendations parallel those of the consumer group Texas Watch: give the TRCC enforcement teeth, appoint unbiased public commissioners and stop imposing mediation fees on complainants instead of builders. The comptroller's report indicates that by 2008, the TRCC will have spent $12 million on operations while returning $14 million to the state general fund, all leveraged from homeowners rather than builders.

According to Strayhorn, "If it were up to me, I would blast this ... builder protection agency off the bureaucratic books."

Given the TRCC's pathetic record of protecting homeowners, Strayhorn's criticism is long overdue. Both Democratic and Republican legislators attempted to push legislation correcting some of the defects in the previous session but were outmuscled by the homebuilder lobby.

Since one party controls all statewide offices, officials in recent elections have been loath to criticize each other and point out deficiencies so glaringly apparent to media and citizens. No matter how Strayhorn's gubernatorial charge turns out, it is already producing a healthy airing of issues long ignored by the lobby-dominated state political leadership.