Wednesday, November 30, 2022 Nov 30, 2022
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Months After a Difficult Debate, Council Quietly Amends the City’s Housing Policy

If a developer wants the biggest tax credits for a low income housing project, they'll likely need to provide amenities for the residents to get to jobs or grocery stores.
By Shawn Shinneman |

The City Council on Wednesday approved amendments to the part of its 1-year-old Comprehensive Housing Policy that deals with how the city evaluates housing projects seeking federal tax credits. The changes aim at striking a balance between new construction and renovations and install tweaks that allow developers to overcome geographic shortcomings by adding on-site services like childcare and exercise classes.

This is not the first time the Council has considered amending the policy. Back in October, residents of the dilapidated Oak Cliff apartment complex Ridgecrest Terrace packed Council chambers in an attempt to spur an amendment that would’ve cleared the way for much-needed renovations to their property just west of Oak Cliff.

But changing the policy so soon after it passed didn’t sit well with some folks around the horseshoe. They felt Denver-based Steele Properties’ plans for Ridgecrest amounted to yet another “Band-Aid” renovation that wouldn’t help address low income housing in the long-term. The housing policy aims to encourage development in areas that have sufficient access to services and jobs. Ridgecrest and other low-income housing apartments that are located in areas of concentrated poverty were not intended to receive public dollars that could be allocated to other projects with better access to healthy food and work. But that doesn’t do anything for the people already living in these dilapidated complexes. The Council had an incredibly difficult decision to make.

Outgoing Councilman Scott Griggs called it a “litmus test” for whether the Council would adhere to the policy’s goals and funnel already limited resources toward areas of opportunity in an effort to stop the concentration of poverty. Others felt turning away a ready developer represented a betrayal of the residents watching their debate. After much contentious and confusing back and forth, a bleary-eyed Council turned down the amendment on the table and directed staff to dig into possible policy tweaks over the next six months. “This whole conversation has been a conversation between the heart and the brain,” North Dallas Councilman Lee Kleinman said then.

Wednesday looked much different. There was no debate. The Housing Policy Taskforce spent those six months hard at work. The amendments were placed on the Council’s consent agenda, the portion where things get passed in bulk. And Council pushed them through without discussion.

At issue was the difficult push and pull between projects that apply for credits worth 4 percent, which generally go toward rehabs of existing housing complexes, and the more robust 9 percent projects. The 9 percenters, doled out by the state, are extremely competitive and particularly valuable for communities. A city’s approval can mean the difference in whether such a project sees the light of day. Federal fair housing requirements say projects funded with tax credits have to be spread out, so cities have to be strategic about which projects earn their go-ahead. If they advocate for a complex that’s too close to an area of concentrated poverty, they might not get the approval from the state. That means the tax credits could go to a different city in the region.

These credits are one of the best tools available to boost a city’s affordable housing stock. But in Dallas, the mechanism has been underused in recent years. They’ve also been ripe for corruption; when Carolyn Davis pleaded guilty to accepting bribes earlier this year, it was because she allegedly accepted money from a Dallas developer to lobby for his project.

In general terms, the amendments passed Wednesday change Dallas’ system for evaluating tax credit projects from a complicated scoring system to one that establishes thresholds. If a certain project meets the given thresholds, staff forwards it along for Council consideration.

For 4 percenters, staff will now ask to see a developer’s cost and plan review as well as a capital needs assessment. It will make its judgments on the proposed construction and challenges of the project from there. Maureen Milligan, an assistant director in the city’s Housing and Neighborhood Revitalization department, says these documents will help the city assess whether the project could “significantly rehabilitate the property.” In other words, whether it’s a Band-Aid or will actually help.

For 9 percenters, projects will have to meet one of several priorities: it’s previously received some form of city funding, it already includes participation from the Dallas Housing Authority, it’s in a census tract where the poverty rate is below 20 percent, it’s in one of the housing policy’s established redevelopment zones, or it’s willing to set aside one in five units for the Metro Dallas Homeless Alliance. Projects that don’t meet one of those criteria can then enter into a simplified scoring system for the Council to analyze.

There is also a requirement aimed to boost services in areas where they’re needed. If the poverty rate in the area is below 40 percent, the developer will have to add extra amenities like on-site childcare, a shuttle to the nearest grocery store, or exercise classes. Milligan says this will encourage developers to consider the overall cost of projects and their impact on Dallas residents who are living in poverty. “This might be a really cheap acquisition for you,” she says. “But look at what the city’s going to require for you to get the city’s support for that tax credit project.”

There was also a change to the timeline for submitting applications. The policy had originally dictated that applications for tax credit projects be submitted just once a year, so the city could consider the full ecosystem of its possible applicants. But developers, particularly those of the 4 percent variety, pushed back. They’ll now be considered quarterly. Milligan says the city felt comfortable with that given the new thresholds.

“The goal of this more robust criteria is we’re still not going to be providing staff recommendations to bad projects,” she said. “That was the real concern.”

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