Last Thursday, some policy wonks got together at SMU to discuss how our city—and how other American cities—can dig out of a shortfall of affordable housing. The George W. Bush Institute-hosted event dug into the role smart policy can play in promoting inclusive urban growth, alternating between specifics and broader philosophical questions. The conversation occurred during a number of panel discussions. Here are some takeaways from the first four of the day.
Bush Institute-SMU Economic Growth Initiative Director Cullum Clark has some ideas on how to improve Dallas’ housing policy. Sitting on the first panel of the morning, Clark laid out the challenges facing our city. No different than most other American cities, Dallas’ middle class increasingly can’t afford thriving neighborhoods and doesn’t want to live in struggling ones. But the city sticks out because of our deep segregation along racial and economic lines (for proof, Clark pointed to the the recent publication of the Opportunity Index). DFW’s economic vibrancy also provides opportunity to get it right here, while Dallas’ exceptional amount of underutilized land presents its own set of opportunities and challenges.
How does this all play into the way Dallas regulates housing? Clark would like to see the city overhaul its zoning code and permitting process, lightening its touch while becoming more targeted. He wants to see greater effort to attract national, high-quality affordable housing builders. He wants to see a focus on preserving and rehabbing existing housing alongside the city’s efforts to close in on its shortage of some 20,000 affordable housing units. On that point, he said during a phone call after the conference, that he was in favor of the city amending its housing policy in the fall when Colorado-based Steele Properties was knocking on the city’s door with a plan to rehab a broken down complex just west of Oak Cliff. The City Council ultimately stayed the policy’s course and shooed Steele away.
As it stands, the city’s housing policy has identified up-and-coming areas for affordable housing investment. But Clark would like to see the housing policy amended so that it adds emphasis on neighborhoods that are geographically close to those areas and other existing pockets of vibrancy. The city’s Market Value Analysis did not peg Fair Park as a reinvestment zone, for instance; in Clark’s telling, that was the most obvious omission. He also pegs Trinity River-adjacent The Bottoms as a potential revival story.
Of course, the city has scarce resources, a point that Clark acknowledges. “If you’re forced to make bets about scarce dollars and pick your locations, in that world, I think you can be a little more forward-thinking in your investment strategy,” he says. “If we were picking stocks, you don’t have to only look at the stocks that have already gone up a lot. Maybe you should look at the stock of companies that are trading at really cheap levels but there’s an underlying business that has bright prospects for the future.”
Home ownership is key. Thursday’s “headliner” event took a broader angle view of the housing landscape, ranging a little philosophical where others had tried to hone in on specific policies. Here, you had former U.S. Secretary of Housing and Urban Development (1993-1997) Henry Cisneros running through the positive impacts of home ownership. At a time when you can’t pick up a business magazine without reading about the way millennials prefer to rent, Cisneros says cities should keep in mind the importance of single-family homes. “For most Americans, the sum total of their net worth is the equity they have in their home,” he said. “Yes, it is a place to live … but it’s also an economic policy to get people to the middle class.”
Home ownership came up on several panels. During the first of the day, Karla Lopez del Rio, a principal at Connexions Consulting in Los Angeles, discussed her city’s reliance on rentals. She flashed a few different photos on the screen. One of them was a massive, modern apartment next to a house that appeared to have long ago fallen into disrepair. She showed a parked van; in LA, “van lords” have started renting out vans for $400 a month, with a mattress in the back. “Nobody will ever own any of that,” she said. “All of that will be rentals. It doesn’t matter where you are on the spectrum these days. And that has huge consequences on the economy that we build.” Clark had also touched on the importance of ownership here in Dallas, calling for a homebuilding boom focused on middle and lower income families in southern Dallas.
Even more than wages, the wealth gap illustrates our country’s deep economic and racial divides. One of the most dynamic speakers of the morning was Dedrick Asante-Muhammad, chief of equity and inclusion at the National Community Reinvestment Coalition. Asante-Muhammad has long studied the wealth gap, with wealth referring to the amount of savings and assets of any individual or family, not necessarily an abundance.
According to Asante-Muhammad, the country’s median household wealth for blacks is $4,000, for Latinos it’s $6,000, and for whites it’s $150,000. He finds that to be a better measure of racial inequality than household income. Someone who has zero wealth can be thrown into peril by a flat tire. “Often times people say, ‘with racial inequality, it’s not where we want to be but we’re headed in the right direction.’ But if you look at the numbers, you look at the economics, no, we’re not headed in the right direction,” he says.
Even people who constantly study this stuff can vehemently disagree. At times during the morning’s third panel, it felt like Wendell Cox, senior fellow at the Center for Opportunity Urbanism, and Rick Cole, city manager in Santa Monica, California, were speaking two different languages. In particular, the two couldn’t find much common ground when it came to land use regulation. “I”m going to take a little different approach here,” Cox said during his introductory comments, and then proceeded to point out what he views as the common denominator among the 29 cities with the most unwieldy ratios of income to housing costs—excessive land use regulation.
“In our polarized society and attention-deficit democracy, regulation is a Republican cuss word and Democratic panacea,” said Cole. “Wendell rails against strong land use regulation. … There’s smart regulation and there’s stupid regulation. But it doesn’t help much to say we should have less regulation or more regulation. We ought to be focusing on what is the smartest form of regulation and that should be data-driven.”
Cox said he was speaking specifically to urban containment land use regulation, which promotes compact development.
“Wendell is right that urban growth boundaries have inhibited traditional ways of housing affordability,” said Cole. “The problem is, what are we doing inside these urban growth boundaries? What are we doing with the underutilized land? What are we doing with the 40 percent of our landscape that’s devoted to the automobile?”
To the latter point, Cole says Santa Monica has stripped city regulations that used to require businesses to build certain numbers of parking spaces—an idea Dallas might want to consider.
