Dallas Handed Out Subsidies in Exchange for Affordable Housing. Developers Got Around It.

Luxury apartments overlooking the DART station in Vickery Meadow.
Lucas Manfield
Luxury apartments overlooking the DART station in Vickery Meadow.
In certain places in Dallas, tax dollars generated from new malls, high-rise condos and upscale restaurants don't go back to the public. Instead, new revenue is put into special funds and used to promote more nearby development.

The names of many of these places, known as districts, are instantly recognizable — Deep Ellum, Farmers Market, the Design District — and represent areas of the city that have been rapidly transformed by an influx of public and private investment.

But to avoid creating playgrounds for the rich at the expense of taxpayers, the policy comes with a caveat: 20% of new residential units funded by the money must be affordable.

But in at least four of these districts, few — if any — affordable units were built, according to a memo released by the city Friday. This comes as little surprise to housing advocates.

"There's really no strings attached," said Sandy Rollins, executive director of the Texas Tenants Union. "It's basically city subsidies for market rate and luxury units that should be satisfied by a bank loan."

"It's basically city subsidies for market rate and luxury units that should be satisfied by a bank loan." — Sandy Rollins, Texas Tenants Union

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The memo came at the request of City Council member Chad West after annual reports detailing expenditures on new developments within each Tax Increment Financing district, or TIF, were released late last month. West asked how many of those developments included affordable units.

The answer, in some districts, is not many. In Vickery Meadow, for example, developers used city subsidies to create 325 new housing units. None were affordable.

Other districts were also far below the 20% requirement. Only 11% of the more than 500 subsidized units in the Design District were affordable, as were 7% in the Skillman Corridor.

Across all of the TIF districts, which include some created before the 20% rule was established in 2005, only 13.5% of subsidized units were affordable. Including projects "in the pipeline" increases that number to 15.1%.

To get around the rule, developers apparently paid a fee to the city. A $500,000 "Affordable Housing Buyout" appeared on the balance sheet of the Design District TIF sometime prior to 2015.

At some point, the city appears to have ended that practice as it began more wholehearted promoting of mixed-income developments. "No ‘Buy-outs’ allowed in Mixed Income Housing Policy," reads a 2016 slide describing the city's "Existing TIF/PPP Policy."

The city did not respond to questions about the policy.

Vickery Meadow is a more egregious example. The TIF district was created in 2006 "to serve as a catalyst model for mixed-use development by redeveloping a functionally and structurally obsolete commercial and rental residential area to take full advantage of the DART light rail system," according to the city's Office of Economic Development.

In practice, this meant subsidizing a new mega development, The Shops at Park Lane, to the tune of $33 million. In exchange, it got a new $323 million complex that included 585 apartments and more than a million square feet of retail and office space.

And no affordable housing. Financiers pulled that feat by paying the city $1 million "in lieu of the developer constructing affording housing units," according to the TIF's annual report.

That money, "to support the development of affordable housing within the District," then evaporated. First, nearly half of it was spent kick-starting plans for a new development that "ultimately did not move forward," according to a 2018 council memo. Then the remainder was shuffled into a city-controlled trust fund "to be used to make loans" to build more housing across the city.

Vickery Meadow is one of the poorest neighborhoods in the city, where 37% of people are below the poverty line. But stepping into the mall, you'd never know. The Whole Foods, a "luxury apartment community" and a gated playground are all physically separated from the surrounding neighborhood by DART tracks on one side and U.S. Highway 75 on the other. Corwyn Davis, a supervising attorney at Legal Aid of Northwest Texas, wondered whether the development was really serving people who lived in the neighborhood.

"Are the people that reside two blocks over, off of Greenville Avenue, off of Park Lane — people that live in all-bills-paid apartments or subsidized housing — are those places actually helping those people?" Davis asked. "I probably venture to say the answer's no, because I bet those people can't afford to shop at the Whole Foods."

Davis emphasized that the TIF program is a powerful tool to create new housing in Dallas, but only when everyone is held accountable.

"The idea of a TIF district is to take taxpayer money and get some greater good out of it," he said. "But if there's no greater good coming from it, then why are you even spending taxpayer money?"