Wednesday, June 19, 2024 Jun 19, 2024
81° F Dallas, TX
Advertisement
News

The Story of a Bridge and the Land Rush It Created

Many homes in West Dallas have quadrupled their value on the tax rolls in the last seven years. The nonprofit Builders of Hope has created a tax relief fund to help keep the residents where they are.
|
Image
Harry Jones

After the Margaret Hunt Hill Bridge was built, it took about five years for the property tax hikes to make it over the Trinity and into West Dallas.

In 2017, the Dallas Central Appraisal District began notifying homeowners in the 75212 ZIP code that their homes were immediately worth a lot more. Suddenly 1940s-era, two-bed, one-bathroom homes no larger than 1,200 square feet had doubled in value. By 2022, many had doubled again.

James Armstrong is the CEO of Builders of Hope, a nonprofit home builder and housing policy advocate that focuses on West Dallas, Pleasant Grove, South Dallas, and southern Dallas. He grew up in this neighborhood, and he has watched longtime residents face difficult decisions to sell or risk being priced out because of these tax increases.

The organization has launched a fund for homeowners to offset the cost of rising property taxes. It will begin as a pilot with $150,000, money provided by an assortment of partners that includes the Dallas Foundation; the Trinity Park Conservancy, which is building the Harold Simmons Park just west of the Trinity River levees; JPMorgan Chase; and the Lukirain Partners Fund, which is managed by the Dallas Foundation.

The Builders of Hope fund will be administered by the Wesley-Rankin Community Center, a nonprofit that has been active in the community for well over a century. The goal is to raise $1 million in the coming years, ideally with funding from the deep-pocketed investors and developers who are building in West Dallas.

“When the middle to upper class feel the pressure, they have options,” Armstrong says. “But the single mother in West Dallas, she has to move away and out. And then she doesn’t come back.”

Perhaps no other neighborhood in the city has seen the wild swing of development like West Dallas has over the last decade. The bridge opened in 2012. But three North Dallas investors and entrepreneurs had spent the prior eight years assembling 80 acres of land that abutted the working-class neighborhoods just over the river from downtown. Their group, called West Dallas Investments, built the Trinity Groves “restaurant incubator” adjacent to the La Bajada neighborhood. Next came a long row of luxury apartment buildings along Singleton Boulevard. The average price of a home went from $75,325 in 2016 to $239,722 in 2023, which was the fifth-highest jump in the state, according to a recent analysis of Zillow data.

The Appraisal District generally takes a few years to catch up to market trends. Stephanie Champion, the organization’s chief community development and policy officer, suspects the 2017 jump was DCAD getting around to all that development. “First it’s the bridge, then it’s the restaurants, then it’s the multi-family across the street, and then it’s the increased interest from the general market, folks who are realizing that maybe they can buy a home in West Dallas,” Champion says. “That’s the progression of it.”

The next hike came in 2022, which reflected the pandemic-era housing boom that flooded the market with new capital and caused significant price spikes across the city as supply shrank. Take Canada Drive, which runs just above the berm of the Trinity River levee. Today, two-story, four-bedroom new builds stand awkwardly next to more modest brick homes built in the 1940s through the early 2000s. According to DCAD, many of those older homes—generally 1,200 square feet, with no more than three bedrooms and two baths—were worth $63,000 to $103,000 in 2017 but have now quadrupled in value. They are on the tax rolls for nearly $400,000 today.

For those who qualify, the relief fund will be calculated to restore their tax bills to the amount they were in 2020, Armstrong says.

“So many people are doing their absolute best to pay those taxes and meet the increased costs of everything these days,” says Natalie Breen, Wesley-Rankin’s chief operating officer. “But they’re really struggling to pay those 2023 taxes.”

Image
James Armstrong, the CEO of Builders of Hope, photographed here in one of the homes his organization built. Builders of Hope

This isn’t unique to Dallas. It’s not even unique to West Dallas. But considering the Texas Legislature has historically failed to pass a law to freeze property tax rates or do much to protect legacy homeowners facing these tax hikes, Armstrong believes the responsibility has fallen to organizations like his. He points to the Westside Futures Fund in Atlanta, which, in addition to being an affordable-housing landlord, has an anti-displacement tax relief fund to help keep people in their homes.

Talking about all this, Armstrong asks: “How do we make sure that vulnerable residents are at the table to shape development decisions?”

The relief fund money is set aside for “cost-burdened households” that spend more than 30 percent of their annual income on property taxes. Households where over half of their annual income go toward property taxes and mortgage payments are also eligible. Applicants must have lived within the 75212 ZIP code for at least 20 years or inherited a home from a two-decade-plus resident. The home must have been built before 2012, when the bridge went up. The U.S. Census estimates that there are about 4,500 owner-occupied homes in the 75212 ZIP code. Builders of Hope believes about 400 of those, almost 9 percent, would qualify for the housing fund under the existing parameters.  

It is an aggressive attempt to help people stay in their homes, an element of an anti-displacement plan that Builders of Hope believes can help stabilize neighborhoods like West Dallas that are being pressured by significant new development. Among other things, the organization acquires properties through the city’s land bank and partners with public and private entities to build homes for lower-income individuals who otherwise couldn’t afford it. It has built about 500 homes since its founding in 1998. Armstrong took over in 2018, guiding the organization out of bankruptcy and establishing a new community development arm. After getting its house in order, Builders of Hope is responsible for about 50 new homes for income-restricted residents and just submitted its permits to build a new 36-unit affordable apartment just west of Hampton Road in West Dallas, its first foray into multifamily.

Image
Stephanie Champion, the chief community development and policy officer at Builders of Hope. Builders of Hope

Both Armstrong and Champion have done this work for years in West Dallas before joining Builders of Hope. Most notably, in 2016, they were on the ground after the city passed stricter housing code guidelines, which prompted inspectors to come down hard on the holdings of a landlord named Khraish Khraish. He rented more than 300 homes to low-income folks in West Dallas. The city deemed the home conditions to be substandard and ordered Khraish to either update the residences to meet the new code or have them vacated and demolished. Instead, Khraish sold 130 of the homes to the tenants. Armstrong says he helped secure over $200,000 in relocation and repair aid for the tenants while Champion, then working for Legal Aid of Northwest Texas, made sure the agreements were not predatory. The city had no plan for what to do with these low-income residents. The plans came from the people who were working on the ground.

“It speaks to the fact that we’re not novice to this work,” Armstrong says today. “You really don’t have a lot of that in Dallas, as much as we should, at least. … We want what we’re doing to be duplicated.”

The two know that they won’t be able to stem the tide through building alone. This tax relief fund is an element of the organization’s broader toolkit, which includes home repair resources, education around protesting property taxes and filing for homestead exemptions, and advising the city on policy changes to encourage additional housing without displacing residents. They are trying to answer the question facing most major cities: how can longtime residents and new development coexist?

They hope to scale by influencing organizations that are active in other neighborhoods vulnerable to abrupt spikes in tax value. They know the limitations of their own resources, and they’re also aware of the need. Builders of Hope analyzed data from the U.S. Census, DCAD, and real estate listings to try to quantify how the average family is being priced out of the city. In 2012, a Dallas family that earned the median income of $42,000 per year could afford 44 percent of the homes sold in that market. In 2022, a Dallas family earning $64,000 per year could afford just 12 percent. By 2032, the current trend indicates that less than 2 percent of families earning the median income will be able to afford a home.

“When the middle to upper class feel the pressure, they have options. But the single mother in West Dallas, she has to move away and out. And then she doesn’t come back.”

James Armstrong, CEO of Builders of Hope

“The idea is, how do you preserve, protect, and promote homeowners in the city of Dallas, the most vulnerable homeowners in the city of Dallas?” Armstrong asks. “Well, things like property tax relief, things like home repair, both the [Builders of Hope] program and the city’s [housing] programs, things like protesting your valuation.”

Eventually, Builders of Hope would like to have a housing center that could provide these things. Wesley-Rankin, the community center administering the rent relief fund, had success partnering with tax consultants at the Dallas-based Toler Company to help residents get homestead exemptions and protest their taxes. Looking through Appraisal District listings, many homes in West Dallas first registered for homestead exemptions in 2017 and 2018, right when Wesley-Rankin and Toler were helping educate residents about the resources available to them.

“It’s getting to a point where lower income families won’t have a place or won’t be able to afford a place in the urban core,” Armstrong says. “They’ll be pushed out to the Forest-Audelia area [in North Dallas] or pushed out to other southern parts of the city. But we know the urban core is where jobs are, where transportation is, where services are, hospitals, all of those things.

“It’s important that we fight—and I use the word fight strongly—to be intentional about protecting spaces and places for vulnerable residents near the urban core.”

They’ll need to move fast. Last year, the Nebraska-based Goldenrod Cos. purchased 35 acres from West Dallas Investments, a total of about 90 properties. Last week, Goldenrod presented its plans to a city of Dallas design panel, an early step to pursue city incentives. Over the next two decades, it hopes to add 5,000 residential units along with 745,000 square feet of office space and more than 200,000 square feet of retail across an array of mid- and high-rises, further transforming this pocket of town.

More change is coming to West Dallas, and Armstrong and Champion want legacy residents to be able to choose for themselves whether it’s something they want to share in—not be forced into a decision because they can no longer afford their homes.

Author

Matt Goodman

Matt Goodman

View Profile
Matt Goodman is the online editorial director for D Magazine. He's written about a surgeon who killed, a man who…
Advertisement