Houston Broker Pushes CRE To Think About Human Trafficking

Strip malls. Restaurants. Office buildings. Industrial warehouses. Multifamily apartments. Residential homes. These are just some of the places where human trafficking occurs in Houston, often in plain sight.

“Every different type of commercial venue is being used, whether they’re housing people or they’re using it for the actual acts,” Colliers International Senior Associate Jillian Fredericks said.

Despite this, the commercial real estate industry in Houston has surprisingly few proactive initiatives for professionals in the sector. But that could potentially change, thanks to Fredericks.

It is difficult to place a definitive number on how many people are trafficked in Texas each year. 

A 2016 report from the Statewide Human Trafficking Mapping Project of Texas found there were more than 300,000 victims of human trafficking in Texas, including almost 79,000 minors and youth victims of sex trafficking, and nearly 234,000 adult victims of labor trafficking.

Resources such as the National Human Trafficking Hotline indicated that Texas ranked second in the country for cases reported via the hotline in 2018, only behind California. The majority of those cases were linked to sex trafficking, with illicit massage parlors reported as the most common venue.

Fredericks is involved in volunteering and raising awareness about human trafficking in Houston. Her interest was piqued through involvement with the Junior League of Houston, as well as Arrow Child & Families Ministries, which runs a recovery facility for young sex-trafficking survivors.

As she went through training and became involved with those organizations, Fredericks realized that there was more that could be done within her own industry.

“The more I learned about it, and the more that I learned how real estate is involved, I thought, 'OK, I can make a bigger difference educating my industry than working with victims,'” Fredericks said.

Houston is one of the worst cities in the U.S. for human trafficking, owing largely to its location as a major transportation hub and proximity to Mexico. George Bush Intercontinental Airport, Port Houston and I-10 are all major transit methods for trafficked people to enter the city.

In the last 12 to 15 months, Fredericks has given an internal presentation for the Colliers office in Houston, and has compiled two annual presentations for the Commercial Real Estate Association of Montgomery County. Fredericks said she is also interested in developing presentations that could be made to real estate groups in other Texas cities.

“I presented to Colliers, and if any other brokerage firm asked me to come in and do it just for their brokers, absolutely, I would definitely do that,” Fredericks said.

Her efforts have also prompted internal discussions at Colliers about developing nationwide human trafficking training for new employees at the company. Rescue America founder and President Allison Madrigal said Fredericks is somewhat of a rarity in the Houston real estate community.

“I've heard people talk about, 'OK, we need to get the real estate community rallied around this,' but I have not heard of anyone who has been educating and presenting like Jillian,” Madrigal said.

A common misconception is that trafficking only happens in certain locations, such as lower-income neighborhoods, or areas with limited police presence. The reality is, human trafficking is rampant in wealthy areas, where clientele are more likely to live and work.

“The most profitable areas for human trafficking, and particularly the sex trafficking side, is going to be in your very affluent neighborhoods,” Fredericks said. “It’s hard to hear, but that’s where they are.”

Massage parlors throughout the city and cantina establishments around Port Houston are the most prevalent property types for sex trafficking in Houston, Fredericks said.

Children at Risk Senior Staff Attorney Jamey Caruthers said his organization has been beating the drum about illicit massage businesses, or IMBs, for about five years, with mixed results.

“There are more IMBs than Starbucks in Texas,” Caruthers said.

Madrigal noted that in the last 10 years, attitudes toward trafficking victims have shifted considerably.

“Where it was always thought of as prostitution in prior years, up until about 2010, there's been a whole shift and a whole awareness of 'Hey, actually, these women are victims of trafficking,'” Madrigal said.

Many people don't realize that human trafficking is in the U.S., but Houston tends to have a greater awareness than many other cities, because city, county and state officials have made serious efforts to address the problem, Madrigal added.

There are limited legal options open to landlords and tenants, when it comes to evicting or policing suspected human trafficking activity on a property in Texas. The main tool used by cities, counties and the state is a civil remedy called the Texas Nuisance Abatement Statute, outlined in Chapter 125 of the Texas Civil Practices and Remedies Code.

If there have been prostitution arrests on a property, the landlord can be sued for common nuisance, and the business can be shut down. This remedy is the most frequent method used to address human trafficking activity, according to Caruthers.

He said it is not particularly effective in combating the problem long term.

“To be honest, when you file a nuisance and abatement, there's a good chance they'll just shut down and move to the next commercial location,” Caruthers said.

Another tool is House Bill 2552, which was written by Children at Risk. That law provides a streamlined eviction process, so that if there is reasonable suspicion of prostitution, human trafficking or unlicensed massage, the landlord can provide just three days’ notice before evicting the business.

“We wanted to give landlords that easy, streamlined path to evict these problem tenants,” Caruthers said.

Though House Bill 2552 was successful, another bill aimed at empowering tenants at properties where human trafficking is taking place did not pass in 2019.

Senate Bill 498 would have allowed tenants to report suspicious activity to the landlord in writing, with evidence such as eyewitness reports or internet advertisements. Landlords would then have 30 days to investigate, and if they chose not to evict the suspicious tenant, the complainant could walk away from their lease without penalties.

“It was very disappointing to see that not pass. We're hoping to try and get past the hurdles we had last session, but we're going to see in 2021,” Caruthers said.

Much of the legislation that Caruthers is focused on places the responsibility on landlords to ensure that they are leasing to legitimate businesses.

“We need to increase, not liability per se for commercial property owners, but at least increasing the amount of due diligence they have to do, which would trigger liability if they don't do it,” Caruthers said. “Because right now, they can turn a blind eye and lease.”

Writing commercial real estate-focused laws to combat human trafficking can be difficult, especially without input from stakeholders. Bills like Senate Bill 498 are hard to get passed in business-friendly Texas, and Caruthers said that while he has argued the impact on surrounding, legitimate small businesses, that message has mostly fallen on deaf ears.

Caruthers said he would like to see more collaboration with the commercial real estate industry, as there are some nuances around the sector that organizations like Children at Risk could be missing when advocating for new legislation.

In the interest of fostering greater collaboration, Fredericks and Caruthers have discussed the possibility of creating a board of commercial real estate professionals in Texas to work on advocacy-related matters. That board could assist Children at Risk with writing more bills, and provide guidance on how the commercial real estate industry operates. A variety of different types of real estate professionals could make future bills more effective for Texas, Fredericks said.

Fredericks said the best way for commercial real estate to combat human trafficking is to become more educated on the subject, including warning signs and legal liabilities. One major problem is that some landlords are not aware of the extent of liabilities they face, when it comes to human trafficking on their properties. Brokers working with landlords could benefit from education, because they can pass on that knowledge to their clients.

“What could make a dent is landlords becoming more strict with their language toward adult service-type companies, and being aware of who they're leasing to,” Fredericks said.

Doing due diligence on potential tenants is also critical, she said. Certain warning signs, like paying only in cash, marketing plans that specifically target adult men and poor credit history are all red flags that should warrant further investigation. But even alert brokers and landlords can be deceived by human trafficking organizations that have plenty of money to spend on elaborate fronts.

“A broker and a landlord could go in and do their due diligence, and somebody could still slide past them,” Fredericks said.

Fredericks told Bisnow she has initiated discussion at Colliers about rolling out training at the national level, which could be designed for new hires. Though discussions are still preliminary, Colliers is also considering offering a webinar on human trafficking during the summer, she said.

Between helping advocates to write bills and promoting better education within the industry on the topic, Fredericks said she believes there is an opportunity for commercial real estate professionals to make a difference.

“I think that our business could help in the long run, we just have to understand what the signs are, when to call law enforcement, using stricter lease language and understanding the laws against landlords,” Fredericks said.