Hunt Realty, Builders of Hope, And Ojala Partners Outline Barriers to Affordable Housing in Dallas 

The biggest obstacles to developing affordable housing in Dallas are money and bureaucracy, a panel of experts said during an Oct. 20 webinar. 

Builders of Hope president and CEO James Armstrong, Hunt Realty developer KaDarius “KD” Smith, and Ojala Partners LP associate Kirk Presley served as panelists in a discussion hosted by Dallas Housing Coalition. 

“What are the barriers [to building affordable housing in Dallas]?” Armstrong asked. “Do we have enough time? Obviously whenever you have local municipalities involved you add a level of bureaucracy to your development project that sometimes development projects aren’t strong enough to bear.” 

While most builders agree that the city’s residential permitting process is moving more swiftly these days, Armstrong said it’s still not simple.

“We need a dedicated city attorney for the housing department that processes the housing deals,” he said. “Right now we’re working on a multifamily deal. It literally took nine months to get agreements. We’re a nonprofit so we can go out and raise money, but tell me what private developer would wait nine months for an agreement for a development. It speaks to the need for the private sector to lead our affordable housing solutions in our city.”

Dallas Housing Coalition Advocates For $200 Million in Bond Money

Dallas Housing Coalition co-founders Bryan Tony and Ashley Brundage are lobbying for a $200 million housing allocation in the 2024 Dallas bond election. 

The median income in Dallas is $58,200 and the average home price is $405,000, Tony said. 

“To afford that kind of home, you need to earn $135,000 as a household,” he said. 

The housing supply gap is 36,660 units and is expected to grow to over 80,000 units by 2033, according to the Child Poverty Action Lab. 

The Biggest Obstacle to Affordable Housing is Money

Presley, whose firm Ojala Partners secured one of the first Public Facility Corporation projects in Dallas, said money is the biggest obstacle to building affordable housing. 

“When you’re talking about affordable housing, you’re talking about building something and then offering it to people below the cost to build it,” he said. “If we wanted everyone to live in market-rate housing, we wouldn’t have a problem, but we have half of our city that can’t afford market-rate housing with what the cost of construction is. It’s only through city government, federal, local subsidy, that you can create something you’re going to sell below costs.”

Bond funds can leverage private investment for affordable housing, Presley said. 

“A little bit of city money activates an enormous pool of public-private partnership money [for those who want] to build housing and cannot do it at an affordable rate,” he said. 

Smith said it’s far more difficult to create mixed-income developments than 100-percent-affordable projects. 

“You have various income makeup in a project and that poses risk to the market-rate units in the eyes of a lender,” he said. “When you’re focused on creating mixed-income developments in the urban core and you’re mixing these incomes in, it’s something that’s rarely done but this is where public-private partnerships come into play in order to navigate those complexities of mixing market-rate units on top of various income streams.”

Red Tape in Low-Income Housing

The DHC is proposing that about $70 million of the $200 million housing bond funds be dedicated to mixed-income and mixed-use developments. 

Presley said that would create flexibility that doesn’t exist with federal and state funding. 

“Almost all the subsidies for housing are administered by federal and sometimes state-level [entities],” he said. “That comes with federal red tape, federal caps on the annual volume you can use, federal rule books.”

The Low Income Housing Tax Credit program was designed to encourage all the low-income housing tax credit developments in Dallas to be built in the southern sector, he added. 

“You had a 20- or 30-year period where nothing was built north of I-30 in the way of low-income housing,” Presley said. “When you have locally-administered dollars you can administer them in accordance with local preference. If we want to have a brand new high-rise in Oaklawn that is 100 percent affordable, we can do that if we want to. If we want to encourage a market-rate developer to maybe look at a neighborhood that maybe they wouldn’t have looked at in southern Dallas near Fair Park or Oak Cliff or somewhere that a market rate developer sitting in Uptown is not going to previously have thought about, you can do that.”

Dallas has a history of “disruptive development” that has led to displacement, Armstrong said.

“It’s really been a cycle,” he said. “We had disinvestment that leads to disruptive development that leads to displacement. What we’re trying to do is literally break that cycle by producing a toolkit that other cities in Texas already have done.” 

Smith said it’s important for developers to be involved in the community. 

“If not, your deal can crumble and your financing doesn’t make sense anymore,” he said. “I think this is where a nonprofit focused on mission, focused on numbers, focused on the greater good of the community, helps to steer the eyes of public perception from ‘big, bad developers’ and ‘big, bad investors’ to, ‘This is a social good.’ If they make money by doing a social good, everybody wins.”