Texas Says No to Dallas' Plan to Keep Subsidizing Segregation

Big picture, the U.S. Supreme Court's decision last month in Texas Department of Housing and Community Affairs v. Inclusive Communities Project shouldn't change much. In endorsing disparate impact theory — the notion in civil rights law that a policy can be found illegally discriminatory through a statistical analysis of its effects even if no one was actively trying to discriminate — the court simply upheld the status quo. While Justice Anthony Kennedy et al should probably commended for not gutting the Fair Housing Act, their opinion does not presage an earth-shaking change.

Small picture, it's a different beast. The justices' specific finding — or, more precisely, the finding of the federal district court whose decision they upheld — was that Texas has been doing desegregation all wrong, at least when it comes to awarding low-income housing tax credits. The tax credits subsidize the development of affordable housing, turning what would otherwise be unappealing projects into lucrative money-makers. For years, the justices found, TDHCA has been funneling the tax credits — and thus low-income people — disproportionately into poor, minority neighborhoods where the prospects of climbing out of poverty are bleak. And within Texas, nowhere has seemed quite so eager to funnel low-income tax credits into poor neighborhoods as Dallas.

The Supreme Court ruling means that things here will have to change. The state indicated on Thursday that it might be willing. Dallas, on the other hand, appears committed to its longstanding policy of cramming poor people next to other poor people.

The test case was the Gateway on Clarendon. It's a nice-enough sounding development: 139 apartments in Oak Cliff, a short walk from the 8th & Corinth DART station and Townview Magnet. The developer, the affordable housing arm of Matthews Southwest, has a track record of building stuff with public subsidies (Southside on Lamar, the Omni Hotel). And it's being built in partnership with Family Gateway.

The problem with the Gateway on Clarendon is that the surrounding area is extremely poor (58.4-percent poverty rate), crime-ridden (39.83 violent crimes for 1,000 persons, more than twice TDHCA's accepted rate), and plagued by blight. An aging public housing complex sits directly across the street. In other words, this exactly the type of place Texas should be steering its low-income tax credits away from, as ICP's Demetria McCain pointedly reminded over the weekend in a Dallas Morning News op-ed. The TDHCA's own staff agreed, recommending denial of the application.
So, what does Dallas do? It 1) endorses the project's application for tax credits; 2) pledges $3 million to cover a funding gap; and 3) embarks on an aggressive and rather shameless campaign to persuade TDHCA to approve it. Mayor Mike Rawlings sent TDHCA a letter, calling the Gateway on Clarendon an "important catalyst to revitalize an emerging neighborhood." Townview Principal Ben Mackey wrote of the need for more affordable housing options near the campus even though the highly selective magnet would, from a sheer statistical standpoint, enroll few if any kids from the development. State Representative Eric Johnson also went to bat for the project, as did Dallas County Judge Clay Jenkins and the city's interim housing director, Bernadette Mitchell (Much of this happened before the Supreme Court decision, but such developments had already been frowned upon by lower courts and there was no move to withdraw support after the ruling.) Essentially, the argument is that the area won't start to gentrify unless the city is allowed to put more poor people there first. 

What probably would have happened in the past with a project from a connected developer so heavily favored by local politicos  is that the TDHCA board would have glanced at the glossy GrowSouth brochures and Transit-Oriented Development zoning plans provided by Matthews and the city, declared that the area was revitalizing, and handed out the tax credits. Instead, the TDHCA stood firm and rejected the application.

McCain, with ICP, says TDHCA's board has been "making some better decisions in recent years" in terms of steering tax credits toward wealthier, "high-opportunity" areas. She is hesitant to describe the Clarendon project as a sign of a fundamental shift, which will only reveal itself over time, but one thing seems pretty clear: It'll take more than a Supreme Court decision to change Dallas' approach to low-income housing.

Send your story tips to the author, Eric Nicholson.