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Dallas Lines Up Developers To Help Create Affordable Housing, But It Will Still Be A Tough Slog

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Dallas has a steep shortage of affordable and workforce housing, and there is no consensus about whether the city’s latest efforts — including this week tapping 12 private developers as potential partners in the creation of affordable housing — will put a dent in the problem.

According to the city, there is a 20,000-unit shortage of affordable homes and apartments, and market-rate housing is being built twice as fast as housing for low-income residents.

"Every unit of housing that came online in Dallas in 2017, for instance, was upscale and luxury," CitySquare CEO Larry James said. "The combination of increasing production, material and labor costs has resulted in a market that isn’t friendly to affordable and workforce housing."

The adverse economics of affordable housing helps account for the fact that such housing is in short supply even in a nonunion, business-friendly place like Texas, just as much as in California or New York.

"While there’s a huge demand for affordable and workforce housing in the city, I suspect that whatever is being produced is outside the city limits of Dallas," James said. "It’s a real challenge for us all."

City of Dallas Assistant Director of Housing & Neighborhood Revitalization Maureen Milligan is more optimistic about the outlook for affordable and workforce housing in Dallas.

"We’re cautiously optimistic," Milligan said. "The comprehensive housing policy represents a great stride. It removes a lot [of] uncertainty about the city’s affordable housing policy."

The city is in the process of awarding $20M in federal and city funds to create housing, some of which will target workforce housing, Milligan said.

The partnership program is also intended to boost housing stock. When (and if) selected for a particular project, one of the 12 partner companies will work with the Dallas Housing Authority to redevelop one of seven of its properties that encompass 650 housing units, or on another affordable housing project.

"The Dallas Housing Authority is seeking proposals from private sector partners to redevelop affordable housing, which is a very positive step forward," The Michaels Organization Regional Vice President of Development Joe Weatherly said.

"Between the low-income housing tax credit and HUD’s Rental Assistance Demonstration program, now is a good time for the authority to be working with private sector partners to transform their vision for affordable housing into reality."

The Michaels Organization is one of the 12 developers named as a potential partner. The selection process began last summer, when the city kicked off efforts to expand its existing affordable housing stock after the Dallas City Council’s enactment of a comprehensive housing policy.

The other developers are Amtex Multi-Housing, Carleton Development, Fairfield Residential, Matthews Southwest, McCormack Baron Salazar, Ojala Partners, Steele Properties, The NRP Group, Trammell Crow, Volunteers of America National Services and the combined team of DFW Advisors, KRR Construction and Michael R. Coker Co.

The first project DHA is redeveloping will be the former Brooks Manor site in Oak Cliff/District 1, a former assisted living property. The agency is seeking to redevelop the property to include both market-rate and subsidized rental housing. As yet, none of the developers has been selected for the project.

The developer selected for Brooks Manor will also have an opportunity to redevelop the Cliff Manor site, which is also in Oak Cliff/District 1. Cliff Manor is fully occupied, meaning the residents (seniors and persons with disabilities) will be relocated prior to redevelopment.

Opportunity zones might also eventually be a tool to create affordable housing.

"There are 17 such zones in Dallas County, and this program can be used to create housing as well as other needed infrastructure," Weatherly said.

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