Former City Planner Says Tax Credit Programs Are Turning Dallas Into a ‘Welfare Dormitory’ For Prosperous Suburbs

Southern Dallas homeowner Darryl Baker says Dallas is concentrating a lot of tax credit rental projects in the area where he lives, and it’s a misguided approach to an affordable housing crisis that doesn’t exist — at least in that particular area. 

Similar to Dallas shouldering the burden of housing the homeless for the entire North Texas region, the southern sector has become a hub for affordable housing, Baker said. Developers aren’t building it in the suburbs because they can get easy approval for a tax credit project in Dallas.

“Dallas has become a welfare dormitory for these other cities to prosper and not have to build affordable housing,” Baker said. “We’ve built too much. If we stop building it, the suburbs are going to be forced to start doing it.” 

Baker, 73,  served as a City of Dallas employee from 1979 to 2005, working as a city planner, a parks planner, and contract administrator for the water department. 

He filed a federal complaint in 2021 with the U.S. Department of Housing and Urban Development about the City’s Low Income Housing Tax Credit in Southern Dallas. The complaint alleges discrimination in the terms and conditions of housing, residential real estate transactions, and the perpetuation of racial segregation, among other things. 

HUD has not responded to the complaint. 

“We haven’t gotten a report yet,” Baker said. “They say it’s open and active.” 

The Low Income Housing Tax Credit (LIHTC) program is the largest affordable rental housing program in Texas. Close to 260,000 families live in over 2,500 LIHTC properties across the state. These properties are owned by private investors who receive tax reductions to provide housing for low-income families and individuals earning less than 60 percent of the Area Median Income.

Source: Inclusive Communities Project

Tax Credit And Public Facility Corporation Projects

There really is no affordable housing crisis in District 3, Baker explained. 

“There’s wild speculation in the marketplace and the City is reacting to it rather than responding to it,” Baker said. 

Of the 27 cities in the North Central Texas Council of Government region, Dallas is the only city that is building affordable housing “in any way that moves the needle,” Baker added. 

District 3 has 28 Low Income Housing Tax Credit (LIHTC) projects, two of which are Public Facility Corporation projects. Many of the projects are concentrated within the borders of Kiest Boulevard, Illinois Avenue, Hampton Road, and Knoxville Street. 

The Dallas City Council approved in September the HiLine Illinois LIHTC apartment project at Knoxville Street and Illinois Avenue. In February, the Council approved the Public Facility Corporation’s Coombs Creek apartment project at Illinois Avenue and Coombs Creek.

The projects were approved without any community engagement, Baker said in an email to Dallas ISD trustee Joyce Foreman. 

“As you know, DISD receives no property tax revenues from these projects that would have a taxable value of around $120 million or more,” the email states. “As you also know, the City is under no legal obligation to inform DISD or any other taxing entities that these projects are under consideration … Giveaways like this are not smart and they are not sustainable, yet this has been the weapon of choice used by the former councilman and the outgoing city manager to rob District 3 and DISD of the tax base needed to pay for and invest in both our current residents and future leaders.”

Developers and numerous elected officials have said that tax-credited projects and PFCs — which are taken off the tax rolls for 75 years — are necessary because no one is building affordable housing without incentives. So how do we get the housing we need without incentives?

“You have to build it in the right place,” Baker said. “We don’t need apartments and we certainly don’t need rentals where we are. We need home ownership at any price point.” 

The southern sector composes 65 percent of the land mass in Dallas but only contributes 10 percent to the property tax base, Baker said. 

“That’s because in District 3, District 8, and District 4, we have … property that pays no property tax,” he said. 

District 3 Councilman Zarin Gracey’s Approach to Housing

District 3 Councilman Zarin Gracey was elected in 2023 and previously served as the District 3 plan commissioner and the first president of the Dallas PFC Board. 

District 3 Candidate Q&A With Zarin Gracey And Denise Benavides

Gracey inherited a district that has been underserved for many years and is working to engage the public on big potential projects like the former hospital at 2929 Hampton Road. He is the only Dallas City Council member who pledged a portion of his $5 million in discretionary bond funds directly to the Housing proposition. 

“It is the role of the developer to provide quality housing for all residents,” Gracey told CandysDirt.com about a year ago. “It is the role of the City to encourage and incentivize (where it is feasible and equitable) developers to provide affordable housing of all types utilizing all tools the City and State have to offer.”

Gracey could not be reached for comment on this report. 

Baker said although he doesn’t agree with all of Gracey’s choices, he supports his council member. 

“He’s been very agreeable and very open to working with us as a community,” Baker said. 

A Dallas City Council workshop on Public Facility Corporation projects — what they are, where they are, and how many have been approved to date — is tentatively scheduled for June.