In just a few weeks, Dallas housing officials must respond to a four-year federal Housing and Urban Development investigation that found that the city misused federal financing aimed at creating low-income housing throughout Dallas.
The HUD inquiry comes as critics claim that Dallas is fostering economic and racial segregation by returning to a practice of placing nearly all its low-income housing in the southern part of town, home to some of the city's poorest residents.
The city has declined to talk about HUD’s claims. In a statement, the city says it has complied with federal regulations. But critics say that saturating certain neighborhoods with low-income housing stunts economic development.
As you drive along Zang Boulevard in Dallas’ Oak Cliff neighborhood, you pass block upon block of a housing complex built after World War II. When the Wynnewood apartments became run down in the 1990s, developers obtained federal tax credits and subsidies that paid to renovate them. They’re now rebuilding some 300 units again with more federal financing approved by the city.
But in exchange for the money, there are restrictions. Developers must promise to rent only to low-income people for up to 40 years.
“Once you get a tax credit project in place, there is a cycle that makes it low income for virtually forever,” said Bob Stimson, president of the Oak Cliff Chamber of Commerce.
At the Parks at Wynnewood, a single adult tenant can't earn more than 60 percent of median income -- that's about $30,240. A family of four can't have income exceeding $43,140. Many of the tenants earn much less.
Since 2000, most new low-income housing placed in southern Dallas
Stimson says economic development is difficult in areas with a lot of affordable housing because there’s not enough disposable income to attract good jobs, retail and grocery stores.
“There’s such a high concentration (of low-income housing) in our community now that it makes it difficult to attract more market-rate developers … and to diversify our demographics,” Stimson said.
In his chamber office, Stimson spreads out charts and maps. He points to government data showing that since 2000, the city has helped locate 80 percent of all new low-income and affordable housing in the southern part of Dallas. (See report below.)
Stimson, a former City Council member, says the situation is a flashback to the 1980s and the Walker public housing court case, in which federal courts held the city of Dallas and numerous other defendants responsible for racially segregating tenants who were poor and mostly black. Lawyers involved say that suit cost the city and its taxpayers at least $116 million.
“For a city that has a history like that, for them to come back and to do it again and to institute policies that would continue to segregate our community based on income and, in all honesty, race, makes no sense to me at all,” Stimson said.
In southern Dallas, one council member welcomes the housing
Carolyn Davis, the Dallas City Council member who represents the Fair Park area in southern Dallas, acknowledges that most of the low-income housing is being located on the city's southern side. But she doesn’t have a problem with that.
“No, because they’re good units,” she said. “People are living in them. And people are not on the street. These are working-class people. These are nurses. These are teachers. These are people who have a right to live in the southern part of our city.”
Davis says one reason developers want to build low-income housing in southern Dallas is because there’s been resistance to building it in more affluent neighborhoods north of Interstate 30.
“When we start talking about affordable houses in the north part of our city, there are some people who don’t want it," Davis said. "They don’t want more of it coming to the north."
Scott Griggs, a City Council member who represents Oak Cliff and the Wynnewood apartment area, says there’s another reason. He says city officials have supported low-income developments where land is the cheapest -- and that’s often in southern Dallas.
“I am of the camp that we need mixed-income neighborhoods throughout the city of Dallas, and you shouldn’t segregate by income or race," Griggs said. "We need to be a vibrant city. So the heart of it goes to a philosophical difference with our people at the city that believe the cheapest land is where we should put the affordable housing even though the purpose of this federal money is to create choice."
Instead of using subsidies to develop the maximum number of units, Griggs believes the city should use them to create affordable housing in parts of town where it otherwise wouldn’t exist.
But Griggs is concerned that HUD may believe the city has misused federal dollars to pay for upscale housing downtown.
“That subsidy shouldn’t be used to create market rate or upper-income semi-luxury housing,” Griggs said.
What should the southern sector look like?
HUD is now asking the city to develop a long-term strategy that will address patterns of segregation. The agency wants to know how Dallas will encourage the development of affordable housing in areas with greater economic opportunities that are not predominantly minority.
Last month, Dallas Mayor Mike Rawlings disputed some of HUD's findings, but said the allegations are serious and that the city needs "to get to the bottom of it."
Stimson, the Oak Cliff Chamber president, says he hopes HUD’s inquiry will force Dallas to examine what it wants the southern sector to look like.
“All across southern Dallas, you have people who live here but mostly if they have jobs, they're working in some other part of town," Stimson said. "We’d like for the jobs to be located here. We’d like for them to be able to shop and get all the things they want to get here."
Stimson believes that will only happen when affordable housing is dispersed throughout the city -- and when southern Dallas is home to a more balanced mix of incomes.
Learn more
Council member Scott Griggs and Ken Smith, who leads the Revitalize South Dallas Coalition, discussed issues surrounding affordable housing and South Dallas on Wednesday on KERA’s “Think.” Listen to the conversation:
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