They haven't even been allowing rebuilds from storm damage and are mostly NOT renewing leases. 

I have a friend that lives in Houston, Tx. They have been slowing working on their home for years. It is a 2 Bed 1 Bath cinders. The recent freeze did a lot of damage to their plumbing to their home, and at this point...

However, the houses on the lots seem to be in such awful condition, it would probably be more efficient to demo the houses and re-build on the lots.

The only thing I would say is that if it's going to be a full tear down and re-build, I'd recommend not starting the deal with your own cash. 

Was just quoted $734, he mentioned 164k rebuild value, or should I go for probably lower quote on market value?

Needs to be gutted, needs new roof, new hvac, new windows, new drywall, fix water damage throughout, rebuild an addition, add a garage, add a 2nd bathroom, new flooring, new kitchen, new appliances, paint, landscaping, redo driveway, redo layout (used to be a triplex but is now sfh), remediate sinkhole, replace asbestos shingles with siding, upgrade electric from fuse box, replace cast iron pipes throughout, put in a pool. 

Also, make sure your coverage A is sufficient to rebuild the property if you have a total loss.

They are in the midst of rebuilding their main campus.     

They are rebuilding and coming out with really cool stuff in early May.

We had a 1100 square foot home insured for $210K, quite sufficient to rebuild before the fire.