Dallas Ushers In Its First Comprehensive Housing Policy

Yesterday morning, the Dallas City Council unanimously approved its first housing policy aimed at addressing affordable housing.  It took a while, but we’ve finally put on our big boy pants.  You may recall back in January the city rolled out a Market Value Analysis that measured housing across Dallas to map the varying levels of housing and costs. There wasn’t a lot of shock on the large scale of Northern Dallas being better off than Southern Dallas. But the block-by-block analysis identified specific areas where an affordable housing policy might do some good.

Armed with that information, the city held many community meetings to discuss the findings and gain input on ways to address affordability in Dallas. Nearly 39,000 people participated on those in-person and call-in meetings.

The results of these efforts identified several issues … (download full policy here)

Despite all the building of the past few years, Dallas has a 20,000 housing unit shortfall in both purchase and rental housing. It’s not hard to see why in 2017 the median home price swelled by 9.1 percent, in part because available housing only grew 3.6 percent. Scarcity increases price.

Meanwhile, 60 percent of Dallas families, regardless of income, are cost burdened by their housing costs. This means they spend more than 30 percent of their net income on housing costs. This forces people to leave Dallas for cheaper suburbs that increase commute times and transportation costs, in effect burdening them in another way.

Adding to unaffordability are developers snatching any postage stamp of land in hot neighborhoods at exorbitant prices while leaving poorer neighborhoods begging for more housing. Cheap land and high building costs in areas with less economic power aren’t as profitable as projects in wealthy neighborhoods that generate top dollar. And so far, the glut of luxury apartment building shows little sign of abatement.

Dallas’ Coffers Can’t Fix it All

They say there isn’t enough money in the city kitty, so they’ve prioritized their activities in the housing plan.  There are Redevelopment areas, Stabilization areas, and Emerging Market areas. Stabilization areas are pockets of affordability within areas of much higher housing stock. The goal here is to shore those properties up so they can withstand developer onslaught. The other two area types are what they say.

Some of the program offerings will be monies and/or financing made available for owner-occupant homes and apartment improvements. The thought being that upgraded properties will help the overall neighborhood while keeping gentrification at bay (in those areas with that problem).

There’s also a provision for teachers, police, fire, and emergency medical providers to qualify for a Targeted Homebuyer Assistance Program. For existing homeowners, there’s an option to waive property tax increases for 10 years provided an investment in their property totaling more than 25 percent of its value is performed.

As you can see from the lead graphic, the policy passed unanimously. City council wanted to do the right thing, but as we know, the devil is in the details and implementation. Many in low-income areas are afraid of the change this policy brings (the devil you know and all), but fingers-crossed this is better than the status quo.

Before the painfully long chatter and vote by council, there were speakers from the public putting a face on low-income housing many equate with addicts, hookers, and the shiftless. Those speaking told of productive careers cut short by illness or injury who are now unable to work. Their meager assistance checks have certainly not kept pace with the rampant increases in living expenses Dallas has “enjoyed” these past few years. Others were working beyond full-time at poorly paid jobs. As I’ve asked repeatedly, how far away should a retail or Amazon warehouse worker have to live from their job?

Texas Ain’t California

One caution came from the city council meeting. Rickey Callahan spoke of Texas or Dallas mirroring California’s proposition 13 initiative dating back to 1978 which freezes assessed values at purchase price. Increases were tied to the rate of inflation and limited to two percent a year. The goal was to enable people not to be priced out of their homes by quickly rising property taxes.

It sounds good, but with 40 years of data on its effects, Dallas might want to tread carefully.  Prop 13 has kept people in their homes longer to avoid the tax bite of a new home. This impacts mobility and stalls the housing ladder. Obviously, Prop 13 reduces municipal tax revenues which in California sends cities to the state for additional funding. Texas, unlike California, has no state income tax that generates revenues that can be tapped at the state level. The result even in California has been the invention of new taxes to try to make up the property tax shortfall.

City council members should know that Dallas already doesn’t generate enough revenue to meet its needs, limiting property taxes would shrink an already deficit situation. I can just see Dallas holding annual billion dollar bond hearings.

Callahan should look at other municipalities faced with runaway property valuations and their resulting property taxes. In Vancouver, Canada, for example, homeowners can freeze their taxes and even stop paying them all together. When they do that, the tax is still owed, it’s just paid (with one percent interest to cover administrative costs) when the home is sold or the owner dies.  Ensuring the city still gets paid from the proceeds of a sale or transfer of property keeps the money in the system and minimizes or eliminates the need to invent more taxes to make up shortfalls.

Otherwise, here’s hoping Dallas has just taken its first step to provide housing to all of its citizens.

Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement. In 2016 and 2017, the National Association of Real Estate Editors recognized my writing with two Bronze (2016, 2017) and two Silver (2016, 2017) awards.  Have a story to tell or a marriage proposal to make?  Shoot me an email sharewithjon@candysdirt.com. Be sure to look for me on Facebook and Twitter. You won’t find me, but you’re welcome to look.

 

9 Comment

  • I have a question I hope someone can help me with. I am currently living in a stabilization area, and we are in the beginning stages of building a modular guest unit in our backyard. This would be a completely separate structure with plumbing and electricity.
    Would this fall under the ‘garage-style’ or ‘granny apartments’ mentioned in our area. Will there be tax incentives to erect these units? Should we put our plans on hold if it will benefit us to wait?
    If we don’t intend to lease it out right away will it even matter? We aren’t anticipating an income stream immediately, but it is something we will definitely consider in the future as our needs change.
    Thank you!

    • mm

      Your best bet is to contact your city council member who can route you to the correct person in city hall who can answer this.

  • Yes – Texas ain’t California. So why (on earth) would we want to implement their failed policies, like “affordable housing?” Rent control has never been proven to work (witness: CA), and “building affordable housing” is french for “building slums.” The proposal simply repeats ideas as Section 8 Federal housing support – and we know what great results that has produced… not…

    How about Dallas focusing on improving the DISD, reducing our astronomical residential property taxes, and fixing our police force? There are plenty of neighborhoods (and residents) in Dallas that would benefit greatly from fixing these problems, and thus create more affordable housing without government intervention. Instead, we have the City Council burying the city in debt by funding Fair Park at taxpayers expense, for use by private for-profit corporations, and not charging The State Fair of TX Corporation for police services.

    It’s how Capitalism works – and succeeds – vs. more failed government experiments. This is EXACTLY how we turn TX into CA…

    • mm

      Not sure where to begin unpacking that mess.
      .
      Ahh, the rubric of Capitalism’s survival of the fittest and screw everyone else. True capitalists know that if they can expand the market for whatever crap they’re selling, they’ll sell more. So capitalists should be all about raising the standard of living so more people can afford to buy their crap. Poor people spend, rich people park it. The less-rich are the key to getting more money into the system…the capitalist system. Criminalizing poverty is spite, not capitalism.
      .
      As I said, Prop 13 didn’t work as intended, but there are other ways to ensure people aren’t priced out of their home because of the taxes (Vancouver example, Chicago too). I’m not sure how fixing DISD and the police while lowering property taxes (the revenue needed to fix those problems) works? I’m doubly unsure how less tax revenue creates more affordable housing. But you know what works? Housing first. Getting people into housing stabilizes their lives and gets them back on track in society and into market-rate housing. Look around the world and this one program works and it’s less money than what cities are paying to sweep people under the carpet.

      • “unpacking that mess?” Sorry you felt it necessary to respond with an insult.

        Capitalism has served TX and the US, and the world, quite well, for quite some time now. What system is better? Venezuela? Cuba? The US and our strongly capitalist economy is the #1 destination for immigrants worldwide, even those at the bottom of the socio-economic ladder, so it’s clearly the leading system. Your “review” of capitalism is a bit surprising, for someone who makes a living in Real Estate?

        Who said anything, even remotely, about “criminalizing poverty??”

        You indeed said Prop 13 in CA “didn’t work” – according to whom? You? Prop 13 did EXACTLY what voters intended, when it was voted in 1978. Prior to Prop 13, property taxes were 3% of assessed value, with no cap; after Prop 13, they were held at 1% of the purchase price (or appraised value in 1978), and increases were limited to 2%/yr, regardless. No more county appraisal district evaluations either.

        DISD keeps floating $billions in tax assessments, and is now the most indebted school district in the state. We spend over the national average per student, and yet they still can’t keep up with building maintenance? Yet the city council is still funding the Fair Park albatross, instead of charging private corporations for its use.

        I’m not sure Chicago or Vancouver are models for which Dallas should aspire… but perhaps they have better tax coordination? “Getting people into stable housing” is a noble cause, but not at the expense of the already stabilized people, and making a mess out of their finances, to enable social engineering.

        Dallas needed “affordable housing” right after WW2 – and the city council authorized up to 8 unrelated people living in the same household. And they all happened to own rental property. It destroyed Swiss Avenue, and is the reason we now have group drug rehab homes in neighborhoods. Perhaps dig a little deeper into who really benefits from this?

        • mm

          Did I say capitalism didn’t work? No, I said the current brand of enriching the rich at the poor’s expense is a long-term fool’s game. The end of every “gilded age” proves that.
          .
          Read about the workhouses of the 1800s, how is poverty today different except the poor can leave the house? Underfunded schools in poor neighborhoods coupled with generational poverty and low-pay result is almost no upward mobility. Wouldn’t you say it’s criminal to work 40+ hours per week and still qualify for food stamps or subsidized housing? We love our cheap Amazon junk but never stop to think the underpaid warehouse worker qualifies for food stamps allowing Amazon to profit and taxpayers to make up the rest.
          .
          Housing First programs cost less then the municipality was spending on their homeless problem and has a high rate of returning people to market-rate housing and society.
          .
          Google Prop 13 and any number of experts will explain in gritty detail of how it failed by emptying city coffers of needed property tax revenue. Unlike Prop 13, both Vancouver and Chicago still get paid in full, they just wait to collect so people don’t lose their home because of property taxes.
          .
          Swiss Avenue eroded because the white people living there ran away to the burbs – as happened to most urban neighborhoods in every major city during that time.
          .
          One thing we can seem to agree on is the State Fair of Texas and it’s opaque treatment of Fair Park, abetted by the City of Dallas. Fair Park could be great if State Fair would leave.

          • The US has the best record of eliminating generational poverty than anywhere else in the world – bar none – and still does. We don’t have a caste system. The average wage for an Amazon warehouse worker is $13+/hr.

            We currently have:

            – Food Stamps
            – Low income parent assistance
            – Free healthcare
            – Free meal programs at all public schools
            – Free education
            – Community colleges
            – Reduced or free utility programs
            – Supplemented rent programs
            – Reduced/free public transportation rates
            – and on and on.

            This article shows that in 34 states, welfare pays more than the minimum wage – so your illustration of the underpaid warehouse worker is a myth:

            https://www.cheatsheet.com/culture/states-welfare-recipients-paid-more-minimum-wage.html/?a=viewall

            In fact, CA pays $7.37/hour more in welfare benefits than their minimum wage.

            And you are in favor of taxpayer subsidized mortgage programs? Where does it stop?

            And isn’t mortgages for people who couldn’t really afford them what led to the 2008 real estate meltdown?

  • I am interested in what the plan entails. Can you tell me about that?