By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
So, in a way I almost admire the people doing the big new Greenleaf Village residential development in West Dallas. It's former HUD Secretary Henry Cisneros, a private developer in the deal; it's the people on the board of the Dallas Housing Authority (DHA), most of whom were appointed by former Mayor Ron Kirk (whom Cisneros is now backing in his Senate bid); and it's our old friends, the Dallas City Council, who have pledged upwards of a million bucks to the deal. High rollers.
I could be wrong, but I think these high rollers may be playing fast and loose with U.S. District Judge Jerry Buchmeyer, who told them they had to build 210 low-income houses in order to get their hands on some 40 acres of land owned by the Dallas Housing Authority.
Judge Buchmeyer presides over the ancient and huge "Walker" case, in which the courts are trying to undo half a century of racism in Dallas public housing. I'm not going to tell you the whole history. But here's the skinny: The judge told the DHA it could sell off three parcels of land in West Dallas for development as a brand-new mixed low- and moderate-income single-family residential development.
In his order, he specified how many of the homes in the new development had to be low-income and how many did not.
Let's all count on our fingers. He approved the sale of three separate parcels of DHA land, one to Habitat for Humanity "for the development of 100 single-family homes for sale to low-income families"; a second parcel to a private developer "for the development of 100 market-rate single-family homes"; and a third to the private developer "for the development of 110 single-family homes for sale to low-income families."
By my reading of what the judge said, Habitat has to build 100 low-income houses, and the private developer has to build 110 low-income houses and 100 market-rate houses. I count that as 210 homes for low-income families and 100 "market-rate" houses, meaning the developer can run them up as big and as high in cost as the market will bear for that area.
But every time I read about this deal, and even when I call people up and ask them about it, I keep coming up with the wrong numbers. Just last month I saw a story in The Dallas Morning News, talking about what a great deal the whole Greenleaf Village development is going to be, in which the reporter said, "Habitat [for Humanity] plans to build 100 homes for low-income residents alongside 210 higher-end houses constructed by a private developer on land that was once part of the city's dilapidated public housing stock in West Dallas."
Umm, let me stretch my fingers out here again, limber them up a tad, and I'm going to try this math one more time: 100 low-income homes plus 210 "higher-end" homes equals what? I think it equals somebody slipped 110 low-income homes up his sleeve.
There are two things I need to say. First, when I called and talked to the private developer and to the Dallas Housing Authority and told them I was concerned about the judge's order, they both told me they intend to obey the order and that they will provide the required number of low-income houses.
I would never say "sort of" to a judge. But that's what they said to me when I asked. David Christian, president of KB Home, the private developer, told me that all of the 210 houses he plans to develop will be "market" houses. "But keep in mind," he said, "that the price points there that we're talking about are still in the low- to median-income range in Dallas."
Christian said he hoped as many as half of the houses he will deliver will come in at prices under $90,000, which will be within his definition, he said, of a low-income house.
Here's one nit I would pick, perhaps. There is already a working definition of a low-income house in Greenleaf Village, and that's the Habitat house, which will have a price tag of about $65,000. The city of Dallas is subsidizing these to the tune of about $8,000 each. The city is not subsidizing KB Home. So let's say you took the Habitat price of $65,000 as your benchmark for a low-income house, and you allowed KB Home to charge an additional eight grand, because it's not getting a subsidy from the city. You would still only get to a price of $73,000 for the KB Home low-income house, not $90,000.
And Christian told me that KB Home really isn't required by its deal with the housing authority to produce a fixed number of low-income homes anyway.
"I don't have any contractual limit," Christian said. "The market's going to tell me what that's going to be."
All right. If DHA didn't bind him to produce X number of low-income houses, then he ain't bound. But the court order sure makes it look as if DHA promised the judge that 210 of these houses would be genuine low-income.
Ann Lott, the president and CEO of DHA, said to me, "Everybody you talk to is going to have a different definition of what low-income is and what affordable housing is. It just depends on who you speak to. I have people on my program who will tell you $60,000 is too high. They can't reach it at that rate. So you're getting into semantics. What do you want to call low-income?"
But two definitions in the same deal? With the same judge? See, from my way of looking at it, semantics is all over the place naturally, but there are two things that are never semantics. The money. And the dirt. A dollar is a dollar. A square foot is a square foot.
And there's some of this money that I just have trouble following. For example, DHA says it is donating all of the "development costs"--streets, sewers, other infrastructure--as its own gift to the deal, a way of helping keep prices down.
"We're doing the infrastructure," Lott said. "That's costing us money. It's approximately $4.6 to $5 million. That's a direct cost. We're paying for that. I'm not getting any grant from the federal government. We've taken out a loan. That's our contribution to the effort."
At $5 million for 310 lots, that comes out to about $16,000 per lot that DHA is putting in.
Ms. Lott also told me that Habitat for Humanity is paying about $14,000 to DHA for each lot it will build a house on, and KB Home is paying $18,500. For the area, that's extremely stout. A perusal of tax appraisals on surrounding streets, which already have residential infrastructure, shows average lot values to be in the $3,000 to $4,500 range.
It's conceivable that you could tag a little bit higher value on the DHA lots, because they will be in a brand-new neighborhood instead of a run-down one. But that's kind of speculative, isn't it? Since not a house has been sold yet in this new area? Can the lots be worth six times what other lots are worth nearby? And isn't it funny that the lot prices Habitat and KB Home are paying DHA are so close to the money DHA is spending to develop the lots?
Look at it this way: Habitat and KB Home don't have to pay to develop the lots, because DHA is doing it for them. But Habitat and KB Home are paying DHA approximately the same thing as the development costs for the lots. And the ground itself, the land, the dirt: That comes out somewhere in the wash between free and a couple of thousand dollars, which is about half the market rate in the area.
For some people, there is no wash. Graciela Aleman is a Latina real estate broker who tried for several years to get the city to tell her how she could develop new homes on DHA property in West Dallas. She says the city just kept telling her it didn't do deals like that.
"I was ignored. I was put aside. I was disrespected, and finally I was not allowed to compete," Aleman told me.
Maybe you're thinking there's always someone who feels left out.
And maybe you're wondering why this is such a bad deal, if it turns a bunch of dismal public housing land into an attractive new single-family neighborhood. I don't disagree. I do wonder why Aleman had such a tough time getting in on this and Henry Cisneros did not. For a process involving public land, this deal feels awfully private. But let's grant that Greenleaf Village, however it gets done, will be a good thing for the area. I understand all of that. But I still say it's a simple question. You told the judge 210 low-income houses. You have defined a low-income house as $65,000. Say we cut you slack and let you ooch the price up to $73,000 without the city subsidy.
How many of those are you going to do?
And it's possible, after all, that I am taking this judge thing way too seriously on account of my lack of coolness. I'm just concerned for everyone involved in this fine venture. I feel a little like Fagin, in Charles Dickens' Oliver Twist:
"Mr. Fagin concluded by drawing a rather disagreeable picture of the discomforts of hanging; and, with great friendliness and politeness of manner, expressed his anxious hopes that he might never be obliged to submit Oliver Twist to that unpleasant operation."