When development costs began to rise in Northern California in 2005, where entrepreneur Tom Miller had focused on buying and fixing up multifamily apartment buildings, he searched outside his state. “I was buying C class properties, upgrading, and flipping them, but the market went crazy,” he says. “Everything went up so much it no longer made sense to invest.”

Searching through the commercial real estate listing site Loopnet, Miller hunted for three criteria: a destination reachable with one nonstop flight; an area whose population was growing; and a cost per unit less than in California, where it had climbed to $100,000 to $150,000.

Texas kept showing up on his radar. After targeting 20 properties, he zeroed in on Hollyview Apartments in Houston’s Antoine/Desoto neighborhood, five miles from downtown. Built in 1982, the 328-unit complex of 22 two-story buildings occupied 10 acres. Once considered a prime neighborhood, the area gradually declined as more families moved beyond city limits.

Hollyview offered Miller the kind of challenge he loved. The units, community center, pools, and tennis courts all showed signs of deferred maintenance; many units had been vandalized. Miller bought Hollyview for $5.28 million and planned to invest $800,000.

Then, reality hit. As he spent more time in the area, he learned that Houston had been overbuilt. “It had the highest vacancy rate, and units brought in the lowest rents,” he says. He also had no way of knowing what would transpire next. Just a few months after his purchase, Hurricane Katrina pounded New Orleans, and the first wave of evacuees moved to Houston, followed by a second wave six months later.

“FEMA paid rents but didn’t check credit or criminal records of many moving into buildings like Hollyview,” Miller says. By 2007, the area was a disaster. “It was one of the city’s most dangerous, with murders and drugs,” says Stedman Grigsby, relationship manager at the Department of Housing and Community Development. After someone stole the wheels off Miller’s car, even he moved to a hotel.

But Miller didn’t give up. He hired security staff, installed cameras, and joined with other business owners, homeowners, residents, and the Near Northwest Management District, which was started to promote growth and safety. “We became a super-block coalition,” Miller says. Community activist Debbie Harlow credits Miller with making a difference. “He went to every meeting rather than disappear as many owners did,” she says.

The biggest catalyst for change happened after Hurricane Ike hit in 2008. HUD awarded the area a $33 million grant through the Texas Department of Housing and Community Affairs; more than $8 million went to Hollyview. The grant required Miller to lease the majority of the units to those earning no more than 80 percent of the area median income, or $65,000 for a family of four. It also helped that the city razed two blighted nearby multifamily complexes.

Architects Mucasey & Associates transformed the complex, starting with the leasing center, which was created from four apartments to become a welcoming, visible landmark from the street. Park space replaced one of the dated pools and both tennis courts; the other pool was remodeled. The community center was refurbished with a fitness center, computer lab, and kitchen. Modern windows, roofs, copper piping, and HVAC systems were added, and sidewalks were made ADA-compliant. Interior layouts were upgraded.

Seventy-five percent of the units are occupied, Miller is breaking even, and he’s been able to reduce his security patrol. But his greatest joy comes from having helped transform the neighborhood; 1,600 area units have been remodeled within a block.

“There’s been a ripple effect, with everyone benefiting,” says Grigsby. Adds ­Miller: “This type of community revitalization has been more satisfying than doing a typical re­development. Every developer should take on something like this. I no longer think, ‘What was I thinking?’?”