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Vacant lots in the Bottom, one of the neighborhoods targeted for affordable housing development by a new city program that is now under fire.
Vacant lots in the Bottom, one of the neighborhoods targeted for affordable housing development by a new city program that is now under fire.
Lucas Manfield

Council Members Request Review of Controversial Affordable Housing Contract

The Dallas City Council is requesting a review of a city contract to develop nearly 100 units of affordable housing in southern Dallas after a member accused the developer of having a conflict of interest.

Notre Dame Place, the nonprofit that submitted a bid for the project, is led by Bill Hall. At the time, Hall was also the chairman of the city's Housing Policy Task Force, a 400-member advisory panel.

The allegation was first reported by Fox 4 in a story published in late January. It quoted two North Dallas council members: Cara Mendelsohn, who called the contract a "de facto conflict of interest" and "wrong," and Lee Kleinman, who requested that the city take note of any instance in which developers are involved in the task force.

In response, Hall acknowledged there was a "perception" of backroom dealing but denied getting any special treatment from the city. He told Fox 4 that he sat out meetings in which a conflict of interest may have arisen.

Hall did not respond to a request for comment on this article.

After the Fox 4 report was published, the resolution to approve the contract was delayed and the city attempted damage control.

A few days later, Michael Mendoza, the city's chief of economic development and neighborhood services, issued a memo defending the contract. He reminded the council that members of the task force "are not city officials" and therefore not subject to the city's code of ethics that would preclude them from bidding on city contracts.

He dispatched David Noguera, the city's housing director, to conduct one-on-one meetings with council members to reassure them of the legality of the arrangement.

"I think it’s a conflict of interest — not legally, but morally. It’s so splitting hairs that it’s not even legal," said Mendelsohn on Tuesday. She later said her objection was based on Hall's position as chairman of the task force, which she argued gave him special access to Noguera and other policymakers.

In response, Noguera proposed simply eliminating the chair position entirely. He explained his office was working "tirelessly" to maintain fairness while it engages developers in the city's new affordable housing plan. The Catholic Housing Initiative — of which Notre Dame Place is a subsidiary — has "an excellent track record with the city," Noguera said, before letting out an audible sigh.

Hall has since resigned his position on the task force. The city has yet to announce a replacement. 

Attempts to subsidize affordable housing development in Dallas have a long track record of negligence and corruption. The city shut down its land bank program — which offered cut-rate deals on vacant lots — for two years in 2017 after The Dallas Morning News reported that the program was being abused by shady developers.

But Bill Hall is a different story. He's highly respected within the affordable housing community and is the former CEO of Habitat for Humanity Dallas, which is why he was chosen to chair the city's new Housing Policy Task Force. The task force was created in 2018 to advise city officials on ways to quickly build the 20,000 new homes needed to eliminate the city's housing shortage.

On Tuesday, Noguera was summoned before a special meeting of the city's housing committee to defend the contract. Task force members, he explained to the committee, were actually encouraged to bid on city contracts.

Despite these efforts, there was little competition. Even if the city approved every proposal, there would still be undeveloped land left over, Noguera explained.

Last year, the city requested bids to develop more than 500 properties, grouped into 16 clusters in neighborhoods across southern and western Dallas.

It received 17 bids to develop different clusters and approved 12 of them, including Hall's.

He proposed to develop a cluster of 99 lots in the Five Mile neighborhood in southern Dallas, for which Notre Dame Place would receive a $1.6 million loan. It was the only bid on that cluster to score high enough to win city approval. Proposals are scored by a team of city staff members from across various departments, Noguera explained.

Council member Chad West, the chair of the city's housing committee, said he saw no ethical issue with the contract. He argued that denying Hall's bid would set a dangerous precedent and discourage developer collaboration with the city.

"We’re going to lose our trusted advisers, we’re going to lose those folks who help us shape policy," he said.

He said he would reach out to the city auditor's office to review the contract before the next council meeting. 

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