“The master leasing program is designed to increase the number of available low-barrier units for those who are waiting for housing,” Jennifer Brown, a spokesperson for the city, said. “The program will also assist those who are faced with obstacles such as bad credit and other barriers that would prohibit them from qualifying for a unit.”
A March 3 memo from Deputy City Manager Kimberly Bizor Tolbert explains that whatever organization is chosen would be in charge of finding the property, negotiating 12–24 month leases, moving tenants in and providing them with case management.
Housing Forward, the lead agency over the local homeless response system in Dallas and Collin counties, would help identify who gets into these units. Master leasing isn’t new to housing and homelessness organizations. But in September last year, the Dallas City Council approved up to $3 million for its own master leasing program in the 2022–23 budget.
To Derek Avery, a local housing and homelessness advocate, this is a step in the right direction that should be taken with caution. Avery operates a real estate company called COIR Development and is the former director of landlord engagement for Housing Forward.
Avery said there are a number of income-based barriers that keep people out of housing. There are places that are required to accept housing vouchers but they require tenants to make three times the rent, Avery said. “You and I both know that if you are on a housing voucher, that if your income tripled, you wouldn’t qualify for the voucher,” Avery said. “It’s technically legal, but ethically it is not right because now you’re effectively discriminating against people based on income, even people that by law are supposed to be allowed to rent your units.”
This, as well as bad rental and credit history, can keep people out of housing. Ideally, these barriers won’t exist for units in the city’s master lease program.“Landlords still can have all of the requirements that they would like." – Joli Robinson, Housing Forward
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Generally, in these master lease agreements an organization would take control of units at participating apartment complexes. The units still technically belong to the apartment owner. This is what concerns Avery, who's worried about what happens if the owner sells the property.
“The master lease is still at the whim of the owner,” Avery said. “As long as they own the property, yes, the master lease will be good. But if they sell the property, now you’re back in the same boat. … From there, it typically voids the master lease and now you have to find somewhere else for the people to stay.”
He said the master lease strategy is good, but he thinks it would be better if the organizations or the city owned the properties involved. The city is still hashing out all the details, so it's uncertain whether this would be a problem for Dallas’ master lease program.
But it still presents some interesting opportunities. Organizations responsible for the units could lease to voucher holders, as well as to people with bad rental or credit history, depending on the lease agreement. But they can also decide to split leases, something that landlords are generally resistant to. This could be a game changer when it comes to getting people off the streets and into housing, according to Kris Freed, chief programs officer for LA Family Housing.
This is because amidst the national housing shortage, there’s a particular shortage of one-bedroom or studio units. Freed explained this in an article last year for the National Alliance to End Homelessness. Shared housing, or splitting the lease, could take advantage of existing multi-bedroom units, according to Freed.
“By capitalizing on the existing stock of multi-bedroom housing units, we can match potential housemates for shared housing arrangements,” Freed said. “Shared housing not only lowers their cost of living, but also has positive impacts on feelings of social connectedness and support for formerly homeless tenants.”
But Joli Robinson, the CEO of Housing Forward, said shared housing isn’t something homeless individuals desire locally. “We really try to focus on providing housing that an individual wants,” Robinson said. “We try to do client choice and we just don’t hear an overwhelming desire for shared housing for clients.”
Landlords can still have a say in who lives in their place in these master lease agreements.
“Landlords still can have all of the requirements that they would like,” Robinson said. “They still could say, ‘We don’t want an extensive background or criminal record’ or ‘We’ll allow some things on peoples’ criminal record, but these things are a no-go or a nonstarter for us.’”
So, an agreement doesn’t remove all of the restrictions, Robinson said, “but there are some opportunities that it could potentially open up.” When it comes to income, for example, Robinson said landlords “wouldn’t necessarily know on the back end how [rent] is being paid.”
“Not all properties or landlords would know because their rent is going to be paid regardless if someone is in the unit or not, regardless of if it’s attached to a voucher or not," Robinson said. "Even if there was a voucher attached to a unit, and say the voucher doesn’t even cover the full price of the unit, in the master lease relationship, we’d still be responsible for the gap in essence.”
Last week, the city asked organizations to propose ideas on how they would run Dallas’ master lease program. Ownership of the units, the property management structure and how service providers are incorporated into it will all be determined by these proposals, Brown said.
“We will have to see what type of proposal response we get from the [request for proposal] to be able to describe in detail how this end product will look,” Brown said.
A City Council vote on who will operate the master lease program is anticipated to take place in late May.
