Mendelsohn: Why Should Dallas Taxpayers Pay For City-Issued Debt to Get Affordable Housing? 

Councilwoman Cara Mendelsohn raised an interesting point during a discussion about affordable housing at Friday’s Dallas City Council meeting on the 2024 bond election. Why spend bond dollars — which require issuing debt and paying interest — on affordable housing when there are already more than a dozen mechanisms in place that could accomplish the same thing? 

Mendelsohn’s comment didn’t get much traction with her colleagues, some of whom argued that a dent can’t be made in the affordability crisis without public investment and offered plans of their own on how the bond dollars can be spent to address Dallas housing. 

Council Informally Agrees to Increase Bond Capacity to $1.25 Billion, May Election Date

The council took an informal, nonbinding straw vote Jan. 19 to call a May bond election with an increased capacity of $1.25 billion, but no decisions were made on which projects will appear on the ballot and where the final dollar amounts will land. Another briefing is set for Jan. 31 and a decision must be made by Feb. 14 to call a May election. 

View Friday’s staff presentation here and watch the full meeting here. 

Mendelsohn on Housing Bond 

City staff is proposing $60 million in bond funds be allocated toward housing, representing a compromise between the $200 million requested by advocates with the Dallas Housing Coalition and $15 million proposed by the Community Bond Task Force. 

Mendelsohn pointed out that Dallas has never had a bond proposition related to housing. That’s because, she said, there are more than a dozen programs that already meet the need. 

Mendelsohn has said she’s not against affordable housing but wants to ensure that projects are funded through the appropriate source. 

“We have a $4.6 billion budget annually,” she said during Friday’s special council meeting. “There are a lot of things we should be funding from that, many of the things I bet people sitting here would like to see us fund. But you don’t show up for our budget meeting. You’re not there for that. Instead, you’re here to ask us to take out money and pay interest on it. These are two very different ideas and the question I keep coming back to is, is this something we should take out debt for as opposed to something we should put in our budget and fund every year?” 

The city already uses federal tax credits, grants, state mortgage and bond programs, a land bank, a Housing Finance Corporation, Public Facility Corporation, fee-in-lieu program, and Community Land Trust to provide affordable housing. 

“There are lots of ways to create housing without taking out additional debt,” Mendelsohn said. 

The city could build 1,150 affordable units with $60 million in bond funds or 2,876 units with $150 million, said Interim Director of Housing and Neighborhood Revitalization Cynthia Rogers-Ellickson. 

Suggestions From Other Council Members For Housing Bond 

Since the bond capacity was raised by $150 million, it’s up to the council to determine which departments get a boost from what was originally proposed, officials said. 

District 1 Councilman Chad West addressed the criticism that bond dollars can be allocated when there’s no existing project pipeline for housing. 

“One concern I’ve heard from some colleagues is that there are no dedicated projects in the pipeline to put the housing money into,” he said. “I’ve [also] heard that we’re not going to get those projects unless we know we have the money.”

Ellickson said there’s never been a pipeline because of how development operates. 

“Our developers have to know that money is available before they can shop around for financing, for their subcontractors, for all the things they need for development deals,” she said. “It’s not possible for them to say, ‘I have this project that I don’t need to start for three years, and City, can you put that in your pipeline and I’ll wait for you to get money.’ It doesn’t happen because acquisition has to happen right away and they have to have those available resources as quickly as possible … That’s the typical market process.” 

West suggested that the city could, for example, contribute some bond funds toward a planned project from The Real Estate Council. An assistant city attorney clarified that’s possible through grant funding if the city has control over the fund and a public purpose is met. 

District 6 Councilman Omar Narvaez suggested funneling bond funds through the Housing Finance Corporation and said a benefit of investing in housing is that the federal government sees that and shows up with more dollars.

“We would not be doing the right thing if we don’t put money toward housing,” he said. “If we can get workforce housing and more of it here in the City of Dallas, our residents will be able to stay … or renters like me would be able to purchase a home and set roots in the City of Dallas.” 

Deputy Mayor Pro Tem Carolyn King Arnold said she supports affordable housing but was concerned about the lack of project specificity and existing infrastructure. 

“We need housing in District 4, but the most vocal in our community are asking for quality homes that are not all classified based on a lower income,” she said. “The developers tend to go and put the lower-priced models in our district. We’re continuing to ask for higher price points on these homes … We want opportunities for all levels and all classes, and it shouldn’t just go to one part of town.” 

District 5 Councilman Jaime Resendez said there are potential projects in his district that could benefit from bond funding through Housing or Economic Development. 

“The city recently acquired a property near Bruton and St. Augustine [roads], which is on the borderline of District 5 and District 7, an area that has needed significant attention in terms of infrastructure and quality housing,” he said. “I just wanted to express some support for those funding mechanisms.” 

Public Feedback on Housing Bond

Sixty-six speakers registered to address the Dallas City Council last week about various potential bond projects. 

West Dallas resident and Builders of Hope chief community development and policy officer Stephanie Champion clapped back at the notion that affordable housing can be achieved without “deep and bold public investment.” 

“Other cities in Texas are blowing us out of the water with their affordable housing bond allocations,” she said. “As a Dallas resident, I’m honestly embarrassed to see how little we prioritize housing affordability compared to our sister cities.” 

A member of the Dallas Housing Coalition, Champion said she was disappointed that the current allocation as proposed by city staff is less than half the figure advocates requested. 

“I was hoping that the strength in advocacy of our 180-plus-member coalition would have swayed this body by now to understand the severity of the housing crisis our city is facing and the dire need for bold investment in housing if we are even to make a dent in the affordability gap that exists.”