5 takeaways from Dallas’ new plan to add 20,000 homes and bring back the middle class

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Dallas City Hall’s affordable housing strategies would be overhauled under a new proposal unveiled Monday after months of anticipation from the City Council.

The new comprehensive housing policy, a top priority for the council and major undertaking for City Hall, is based on a recent market-value analysis of Dallas neighborhoods. In a city of both great wealth and large concentrations of poverty, the goals include a huge boost to housing development and attempts to bring back middle-class residents who have been priced out of Dallas.

Economic Development and Neighborhood Services Chief Raquel Favela said a dearth of housing for the middle class is "an economic problem that the city cannot afford to ignore."

Here are five takeaways from the policy.

1. It sounds astoundingly expensive

The city has a shortage of 20,000 homes, which is causing spikes in housing costs, officials said. Favela said the city can help build that many homes in about three years. But it won’t be easy or cheap.

Favela’s math, presented to the council’s Economic Development and Housing Committee, pegs for-sale home developers’ subsidies at $489 million annually for three years to build 3,733 homes a year. That’s more than the annual cost of the police department, the city’s single most expensive single service from the general fund. On the homebuyer side, officials estimated offering "soft second mortgages" at about $49.7 million a year for people at different income levels.

Another $251 million — more of a ballpark figure than the others — would be needed to help fund 2,933 new rental units a year at various levels of affordability, Favela said.

Rather than subsidizing housing with grants, which haven’t produced the amount of housing the city wanted in the past, City Hall primarily would structure the subsidies as loans to help fill in the gaps not covered by other sources. Long term, the city would conceivably reap millions every year in new property tax revenues, loan interest and other economic spillover effects.

It was unclear exactly how city leaders would find all the upfront money for the loans. Favela said the city can’t do it all alone, but some could be pieced together from several sources already available, including federal money, bond funds and revenue from tax increment financing districts.

Private foundations have also shown interest in chipping in to help finance developments, Favela said.

Favela doesn’t foresee a need to raise property taxes to fund the loans. But the council will have to make choices. If the City Council tries to piecemeal its approach to housing, Favela said, "then it’s not comprehensive."

2. The city has 3 types of target areas

City officials proposed three types of areas they’ll target: redevelopment, stabilization and emerging market.

Redevelopment areas are those that contain a transformational project. That could include the areas near the proposed Dallas-to-Houston high-speed rail station, Red Bird Mall, Wynnewood shopping center in Oak Cliff and the Valley View Mall site.

Stabilization areas are the neighborhoods that appear primed for gentrification because they’re close to much stronger markets. The areas around the LBJ Freeway and Skillman Avenue, Casa View, the Bottoms and the east side of downtown are among the stabilization areas. The strategy there would be to freeze property taxes and give fee rebates for homeowners who want to improve their properties. Officials also want to reward density, allow garage-style or "granny" apartments and reconsider zoning in those areas.

Emerging market area is a euphemistic name for the most distressed areas. Before the city starts throwing housing development at those areas, officials want to build up neighborhood groups, make infrastructure improvements and focus on code enforcement. Some examples include the area near UNT-Dallas, Oak Cliff near the Dallas Zoo and part of Pleasant Grove.

3. Landlords will get some help

Dallas officials, including the mayor, in recent years have targeted so-called high-impact landlords who own large amounts of low-quality, low-income rental properties in the city.

In 2016, the council approved new minimum housing standards that required landlords to register their single-family rental homes and receive proactive code inspections.

One of high-impact landlords, Khraish Khraish of HMK, rebelled and announced he was closing down his rental homes in West Dallas because of the cost to comply.

Now, one proposed program would provide low-interest loans to help landlords fix up their homes as long as they continue to rent them out to low-income families. Khraish said Monday that he’s surprised "the city is making this approach after they came at a landlord with a club and now they’re coming with a carrot."

But he’s skeptical that the city will be able to provide for any affordable housing. Housing plans from City Hall in the past "all seem to fail to materialize into real action on the ground," he said.

4. Call in cops and teachers

Police officers, teachers and firefighters could get some special incentives for living in the city.

Currently, few Dallas police and firefighters live in city limits. A 2015 analysis by The Dallas Morning News showed only about a fifth of the first responders claimed addresses in the city. Most preferred the suburbs.

Mayor Mike Rawlings has previously said he wants more of them to live in the city limits. But some officers said in interviews then that they preferred suburban schools for their kids or didn’t want to live in the city because they didn’t want to run into people they had previously arrested around town.

5. Expect some tweaks

The full council was set for a vote on the housing policy next week. Committee Chairman Tennell Atkins started Monday’s meeting by announcing that wasn’t going to happen.

"We’re not going to rush this policy because it’s very important to get it right," Atkins said.

Council members offered some compliments but also had plenty of complaints. Lee Kleinman was concerned about the subsidies. Adam McGough wanted more public input. Kevin Felder chastised Favela for not believing in the area near Fair Park. Omar Narvaez pointed out that the latest map doesn’t target West Dallas, which Favela said was an error.

And Mayor Pro Tem Dwaine Caraway took issue with the premise of the policy — to build from areas of market strength — even though two of the target areas will fall partially in his deeply distressed Oak Cliff district.

Caraway said to his constituents, "it appears that we don’t matter, period."

"I’m not fussing, but I am fussing," Caraway said. "I want to make sure we understand that the most oppressed area in the city of Dallas is Oak Cliff."

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