Can affordable housing gain a foothold near one of Dallas’ ‘high opportunity’ neighborhoods?

All Linda Kenner wants is a place to live, in a nice, quiet community with low crime, and not a lot of stairs.

The 67-year-old has been on the hunt for a new apartment since September. She’s called or visited over 30 different complexes, but she is still stuck in an aging apartment complex she desperately wants to leave.

The challenge: Kenner is relying on a housing voucher to help pay her rent. She’s on a fixed income, and the voucher is supposed to help her access housing in communities with low poverty rates, high performing schools and a strong median income base.

Across North Texas, few landlords in these “high opportunity” neighborhoods are willing to rent to people who use housing vouchers. Over and over, Kenner said, a leasing agent will tell her they have a vacancy, but as soon as she brings up her voucher, the conversation is over. We don’t accept vouchers, she’s been told dozens of times.

“I feel like I’m being rejected and denied housing. That’s how I feel. And it’s very hurtful. It hurts me and I’m pretty sure it hurts anyone else who’s in my position there searching,” Kenner said.

Soon, members of the Dallas City Council will decide whether to salvage a planned affordable housing development in northern Dallas that would increase opportunities for lower-income people to find housing in a low-poverty area.

It’s a project that has been controversial from the start, showing some of the challenges facing affordable housing developments in high opportunity areas of the city.

The project

The Cypress Creek at Forest Lane is a proposed complex of about 190 apartments near the intersection of Highway 75 and Forest Lane. Dallas-based Sycamore Strategies is the lead developer.

Nearly half of the units would rent at market rates —between $1,515 and $2,254 a month depending on the size of the apartment. The rest would be leased with rents below market rate to make them affordable to lower- and middle-income Dallasites. It would include parking, a dog park and a coworking space, according to city documents.

About 47 apartments would be reserved for very low-income tenants –single people making $20,450 or less, or $29,200 or less for a family of four — with rents between $500 and $700. The remaining 56 or so units would be affordable to people making up to 70% or 80% of the area median income, such as mail carriers, licensed nurses, preschool teachers and corrections and probation officers.

The project has gotten blowback from nearby residents, even though the project would be built amid offices and shops about a quarter-mile from the nearest house.

Although city council members threw their support behind the project in 2021, and the project was approved to receive federal tax credits to subsidize the affordable housing, development has stalled. A private deed restriction bars the developer from building multifamily housing on the land.

Council members are expected to vote next week on whether to approve the city’s acquisition of the land for the development through the Dallas Public Facility Corporation, a move that would allow the project to be built despite the deed restriction, according to a briefing memo from Assistant City Manager Majed Al-Ghafry.

The city would forego nearly $344,000 in tax revenue over the first 15 years after it acquires the land. But those costs are outweighed by developer fees and other revenue flowing into city coffers if the apartments are built, Al-Ghafry wrote in the memo, “not to mention the addition of much-needed new housing stock in a strategic area of the city.”

Al-Ghafry pointed out that the apartments would be close to jobs, a hospital, light rail, grocery stores and other amenities serving this relatively prosperous pocket of the city. The poverty rate in the surrounding census tract is below 14%, lower than the city overall.

An empty field sits behind a sign that says No Trespassing

Christopher Connelly

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KERA News

The site for the proposed Cypress Creek at Forest Lane apartment complex has been an empty field since a 2019 tornado wrecked the office building that used to occupy the land. Although the apartment complex was awarded competitive housing tax credits, the project has been held up because of a restrictive covenant that bars multi-family housing.

City officials wouldn’t be interviewed for this story, although the city public information office acknowledged that it received KERA’s request.

Council member Adam McGough, who represents the area, called the effort to move the project forward “shady and surreptitious” and “another deceitful slight to this community by city management and staff.”

McGough declined an interview with KERA News, but provided a lengthy statement.

William Roth, who runs a commercial real estate company and identified himself as one of the “longtime property owners who are committed to the neighborhood,” declined an on-the-record interview. But he said in a text message that he’d “strongly oppose” such an action by the city.

“It would be unfortunate and poor public policy for the City of Dallas to disregard longstanding private property rights granted to landowners and to attempt to override these rights,” Roth said.

But Ann Lott, who heads the Inclusive Communities Project, said the city should go the extra mile to move the project forward after decades of policies and politics functionally blocked adequate affordable housing from being built in wealthy areas where white communities hold sway.

“This is an opportunity now for the city of Dallas to affirmatively further fair housing, which means that they are going to have to take steps in order to put this housing on the ground,” she said.

Deepening segregation?

Fair housing advocates like Lott say the placement of this project is significant: It would build high-quality affordable housing funded with federal tax credits a high opportunity neighborhood in northern Dallas. Projects like this are overwhelmingly concentrated in high-poverty neighborhoods and in predominantly Black neighborhoods.

“As a recipient of federal funds, [the City of Dallas has] an obligation to affirmatively further fair housing. So this means that they should be taking actions that would promote integration and reduce segregation. And we don’t see the City of Dallas doing enough,” said Lott, whose organization has sued Dallas and the state for deepening segregation by approving too few tax-credit properties in higher-income and majority-white areas.

The city is in the midst of rewriting its policies to promote racial equity. One key housing goal is to increase access to high-opportunity areas for lower-income residents and to better promote racial and economic integration.

“For us, high opportunity means access to neighborhood amenities, it means access to good quality schools. And I remain firm that as long as you can continue to successfully segregate families by race, the neighborhoods are not going to be equal,” Lott said.

The stakes are significant. Children of low-income parents experience lifelong benefits from growing up in mixed-income neighborhoods, compared to children of low-income parents who grow up in high-poverty neighborhoods. According to a growing body of research, low-income kids raised in higher-opportunity settings are healthier, more likely to attend college and get married, have higher incomes and lower teenage birthrates than children raised in less-privileged neighborhoods.

Lott said community backlash often prevents affordable housing from winning city support and being built near wealthier neighborhoods, especially when they are disproportionately white. These communities, she said, are often better connected politically, and have more resources to deploy in opposition to affordable housing.

Because federal Low-Income Housing Tax Credits are highly competitive, city support can make or break a project. City councils can also waive state rules meant to prevent the concentration of affordable housing, especially in high-poverty areas. Dallas has often put its thumb on the scale in ways that entrench segregation, she said.

A rocky path

In the case of Cypress Creek at Forest Lane, though, the city did back the project. In 2021, the city council approved a resolution of support, even though that didn’t put the project on an easy glide path.

The council’s resolution of support came despite opposition from the local council member, Adam McGough.

At the time, McGough said he’d support affordable housing in his district, but felt this project lacked adequate community engagement. During the meeting, the developer read from several weeks of emails trying, unsuccessfully, to coordinate community engagement with McGough’s office.

At a February 2021 council meeting, residents from nearby neighborhoods of Hamilton Park, Northwood Estates and Stults Road told members that they thought adding affordable housing would increase crime and reduce property values.

They said they felt blindsided by the proposal, raising concerns that it would increase crime and decrease property values. Many spoke about homeless encampments nearby, suggesting the city should clear encampments and increase police presence rather than build the affordable housing.

The site itself is not exactly in any residential neighborhood. It’s tucked in a pocket of land bordered by a freeway, a creek, some rail lines and Forest Lane, a major roadway. It’s immediate neighbors are an office buildings, a used car dealership and an all-terrain vehicle company.

The closest homes to the site are across the creek and DART rail line in Stults Road, where private developers are now building single family homes with price tags above $1 million. On the other side of Forest Lane, about a 12-minute walk from the proposed apartments, is Hamilton Park.

Concerns about crime and property values are frequently levied against affordable housing, even though research shows little to no negative impact from tax credit-funded properties.

After the council threw its support behind the project in 2021, then state-Rep. John Turner wrote a letter to the Texas Department of Housing and Community Affairs — the agency that oversees the distribution of federal tax credits — stating his opposition to the project. That came after McGough posted on Facebook that such a letter would lower the project’s score, and providing Turner’s contact information for constituents.

For a short time, the letter appeared to kill the project. Cypress Creek was not initially approved for the tax credits needed to finance the development. But a few months later, after approved projects fell apart, Cypress Creek was awarded tax credits.

‘In my back yard’

McGough, in a statement, said people in his district aren’t opposed to affordable housing, per se, but that this project in particular falls short. And he pointed out that opposition came from a diverse set of neighborhoods, including Hamilton Park, a historically Black neighborhood.

“I’ve witnessed for years firsthand the Northeast Dallas community come together to serve our neighbors in need, say, ‘Yes in my backyard,’ and discuss innovative ways… [to help] those in need of housing as well as supportive services,” McGough said.

McGough pointed to data showing a higher number of lower-cost rental homes in his district compared to others.

Yet only two of more than 140 tax credit-backed affordable housing developments approved in Dallas since 1990 are in his district, not including Cypress Creek at Forest Lane. These federal tax credits are a primary tool for creating high-quality and stable affordable housing for very low-income residents.

Tax credit-backed projects have another major benefit, Lott said: They’re barred from turning away potential tenants just because they use housing vouchers.

“Over 90% of the landlords in DFW will not accept a Section 8 voucher holder under any terms, and so these families are finding it harder and harder to use their vouchers,” Lott said. “We really look to Low-Income Housing Tax Credits because those owners are prohibited from discriminating against a Section 8 voucher holder.”

Lott suggested that may be part of the reason these tax-credit projects face a high level of opposition.

‘One of the last opportunities’

Land is at a premium in northern Dallas’ desirable locations, and that makes the prospect of developing affordable housing in high-opportunity areas even more challenging. So even as the city has committed to do more to increase racial equity in housing, including for very low-income residents, decades of booming development amid deepening housing segregation in recent decades have left few available parcels.

“I think that this is one the last opportunities to get affordable housing in this area,” Zachary Krochtengel of Sycamore Strategies, the developer for Cypress Creek, said at a meeting of the Dallas Housing Finance Corporation last April.

KERA asked Krochtengel to comment on the record, but he declined.

The land for this development is only available because of an act of God, he pointed out at the meeting. In 2019, a tornado damaged the office building that was there, resulting in a rare open piece of land in a highly desirable corridor along the North Central Expressway.

Krochtengel told the board he’d spent months trying to get neighboring property owners to release the land from the deed restriction and allow the apartments to be built. The deed restriction dates back to the 1970s, and limits land use to offices, restaurants, hotels and motels. Over the years, other parts of the property have been allowed to be developed for other purposes, such as a Home Depot, a self-storage facility and an auto shop, he said.

“We’ve been in talks with them for months to try and negotiate with them. We’ve offered them monetary incentives to negotiate with them. However, they didn’t want to work with us, even though for months they said that they thought that they could get there,” Krochtengel said. “We now look at that and we say that that was just a long-winded, you know, kind of stall tactic.”

Overall, the board reacted skeptically to the plan for the city to partner on the project, and left the issue unresolved, citing concerns about the potential for litigation and questioning whether the city should intercede to bypass the deed restriction.

The City of Austin is in the middle of a protracted legal battle after trying to ignore a deed restriction in order to build a single affordable home. The case is different for a variety of reasons, however. And Krochtengel argued that the city often uses its authority to bypass deed restrictions.

Now, with the city council set to take up the question of doing an end-run around the deed restriction in order to get the project built, Ann Lott framed it as a chance for city council members to show commitment to racial and economic integration in housing.

“I’m hopeful that things are changing. I’m hopeful. I think it’s positive that this proposed development is even going to be considered,” Lott said.

Christopher Connelly is KERA’s One Crisis Away Reporter, exploring life on the financial edge. Email Christopher at [email protected] can follow Christopher on Twitter @hithisischris.

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