Fort Worth City Council Mandates Affordable Housing in City’s Distressed Neighborhood Empowerment Zones
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More and more cities are recognizing that the best way to bring affordable housing to the neighborhoods that need it most is to make their own rules. That’s just what the Fort Worth City Council did when they adopted a resolution prohibiting local developers from opting out of building affordable housing in Neighborhood Empowerment Zones. The resolution was approved unanimously without discussion on Jan. 23.
What is a Neighborhood Empowerment Zone?
The City of Fort Worth defines Neighborhood Empowerment Zones as areas that “promote housing, economic development, and quality services in central Fort Worth.”
“Now there are more reasons than ever to build in Fort Worth thanks to an incentives package recently approved by the City Council for any NEZs designated in the city,” the site states.
Dallas’ Fee-in-Lieu Program
An “opt-out” program for affordable housing isn’t unique, even in Dallas, where the subject of how to build more homes for the lower bracket of area median income is debated almost weekly.
CandysDirt.com reported about a year ago that more than $4 million had been collected for a “little-known [Dallas] housing incentive program known as the Mixed Income Housing Development Bonus.”
The MIHDB fund was created by the Dallas City Council in 2022 to provide incentives like changes in height, floor area ratio, density, or parking reduction in exchange for on-site affordable units.
Developers can also pay a “fee in lieu” instead of providing those affordable units — so some of the developers getting the incentives aren’t providing affordable housing, but they are paying into the fund, which is designated for affordable units.
“We’ve had four developers take advantage of the fee in lieu, but we’re still seeing the majority take advantage of the on-site bonus,” said Assistant Director of Housing and Neighborhood Revitalization Thor Erickson during a March 2023 Dallas City Council meeting. “It’s important to note that both are still viable options to the development community and we’re not seeing it skewed one way or another.”
Fort Worth’s ‘Opt Out’ Program
A January Fort Worth Report article warned Cowtown developers that the change was coming.
“Fort Worth is looking to amend its code to remove the opt-out option for developers and encourage the construction of more affordable housing in Neighborhood Empowerment Zones, distressed areas where the city works to promote economic development and social services in the city core,” Sandra Sadek wrote in the Jan. 3 article.
Prior to the resolution passed last month, city ordinance allowed developers to build in Neighborhood Empowerment Zones if they either set aside 20 percent of the units for low-income tenants or paid $200 per unit for five years to the Fort Worth Housing Finance Corp. to opt out.
Unlike Dallas, Fort Worth has seen more developers choose the “meager fee” rather than designate affordable units. City officials told the Fort Worth Report that the change would not discourage development and would “help prevent the segregation of neighborhoods by income.”
Councilwoman Elizabeth Beck said during an October meeting that residents were concerned about gentrification.
“By ensuring there’s an affordable component, it’s a protective measure in that we’re not going to allow developers to come in and buy out the affordable component of that and erect something that prices the rest of the neighborhood out,” Beck said.
The January decision to amend the ordinance was proposed by Councilmember Gyna Bivens, seconded by Jeanette Martinez, and approved 11-0.
