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The Dallas Examiner


As inflation has affected households across the United States, living expenses have risen in many cities across the country, making it unaffordable for some to own a home or pay rent.

In an effort to help local residents, the city of Dallas has been working to create and maintain more sustainable and affordable housing by providing greater fair housing choices. It has also made efforts to work to overcome its history of segregation and poverty in certain areas of the city.

To aid in the effort, the city has created the Mixed Income Housing Development Bonus Program. The program would allow developers that use the bonus to pay a fee for the MIHDB fund in lieu of providing reserved units onsite. The fees will also be used to provide and preserve more affordable housing throughout the city.

The City of Dallas Housing and Neighborhood Revitalization group held a virtual meeting Feb. 23 to discuss the city’s plans for bonus funds and fees, after studying how other cities used their bonus funds.

Jessica MacKinnon, senior research analyst for the Housing Department, presented the research and recommendations behind the use of the MIDHB fee.

“It is a zoning incentive program. So, if developments choose to provide on-site affordable housing, we provide bonuses to the number of stories they build with the high-density parking and things like that,” she said. “Recently, we added additional use of the program where developers can pay a fee in lieu instead of those affordable housing units. This is then a pretty popular program since its inception.”

So far, three projects have been completed, 21 are under construction and 17 are still in the process of completing paperwork and administrative requirements.

“This project pipeline doesn’t include any projects going through zoning or that have been recently approved that we’re following with the expectation that they’ll continue with the MIHDB program.”

She said the purpose of the fund was to ensure that the fees collected in lieu of affordable housing still get used for some kind of housing purpose.

“It’s guided through the Dallas development code section 20A – 33,” MacKinnon emphasized. “In general, it allows for us to spend these funds on programs authorized by our housing policy for data and analysis in support of those programs and for staff and expenses for the management of the MIHDB program and for the bonus fund. This fund receives all of its dollars through the program fees and the fees from the MIH and the fees in lieu of the MIHDB program. There’re no other funding sources currently, we’re estimating that we will receive about $6 million this fiscal year and we have received $4.4 million to date and we’re hopeful that similar amounts will continue moving forward.”

MIHDB fund is separate from the Housing Trust Fund, according to MacKinnon.


Breaking down the research

After looking at the city’s research, there are four primary sources to identify what the potential allocation for funds will be.

“The first and primary source is the Dallas Housing Policy 2033, which will be our new revitalization of the housing policy,” she said. “We looked at the Housing Policy Task Force and we will perform the survey with you and then we will look forward to hearing your residents’ thoughts.”

Currently, the department has researched 44 other city’s housing trust funds and spoke with different program leaders and management and staff to identify any existing gaps in its programs that this fund might be able to address.

“If you’re not yet familiar with the Dallas Housing Policy 2033, this is a goal of revitalizing our policy with equity in mind,” MacKinnon said. “We have gotten considerable community participation and the goal is for this new policy to drive all of our programs moving forward.”

The policy is built through seven pillars which include to identify equities, equity strategy target areas, a geographically targeted effort for neighborhood revitalization and other equity focused interventions.

The second and third goals include a citywide production and citywide preservation as a focus on increasing the number of people we serve and increasing the diversity of the people that we serve infrastructure partners with and that first pillar, which will allow us to provide more than just housing to revitalize neighborhoods. The last three points are collaboration and coordination, engagement and education.

“These all focus more on improving our communication and our partnership and our engagement with different stakeholders, residents, community members and other organizations,” she said.


Housing by the numbers

Another source the city looked at is a survey they conducted on the MIHDB program.

“When I pulled these numbers together, 68 members had responded to the survey,” MacKinnon said. “We’ve had a pretty diverse turnout with roughly half of the applicants being residents and some good representation of developers, nonprofit organizations, neighborhood groups, advocacy or research organizations, landlords and some other categories. We’ve gotten good geographic distribution as well, with most districts having at least one person representing but nobody yet in district five and 11.

The first question that was asked was, “Which issues are most important to you or your organization?”

“We see trends in home ownership, strong communities and stability are the reason the results are to the right with the number representing the average score,” she said. “So the top score that we found was the lack of affordable homeownership. Opportunity against neighborhood revitalization, displacement and homelessness all being the priority key issues.

“The next question we asked focused on priority programs that already exist and again we see more focus on homeownership or development and stability and home repair. The top responses for this question were new housing development and substantial rehabilitation, senior home repair second, followed by our regular traditional home repair program, and the Homebuyer Assistance Program.”

Another question asked was about the type of construction people wanted for rentals and homeownership.

“Homeownership has been the clear leader among those who responded to this survey,” MacKinnon concluded. “At the last general question that we asked, you focused on which populations we should prioritize while serving again. We see that tied towards strong communities and stability, families with children were ranked number one followed by residents experiencing or at risk of homelessness. Seniors were third and so far, low-income renters and low-income homeowners have been tied.”


Putting funds to use

The next research was on how other city’s housing trust funds were used.

“We did a pretty superficial review of 44 different cities’ uses of their funds and by far development was the most popular use of funds and 31 of those 44 cities included development as part of their housing trust fund,” she stated. “One thing that we noticed was that the affordability levels of those developments were a lot lower than typical affordability levels. So a lot of these projects that were funded by other cities required less than 60% or less than 50% area median income. Some even focus on less than 30% or under 15% of the area median income, meaning that most cities that at least mention the affordability, but they were serving were focusing on the most vulnerable populations.”

She said as for the homeownership and rental debate, it was kind of mixed between the two. Both were present among different cities, but in general higher cost high density cities focus on multifamily housing.

Home repair was the second most popular use of the funds with 14 of the 44 cities doing some version of home repair or targeted rehabilitation.

Homebuyer Assistance was a little less popular with only 5 of the 44 cities, including it but of those five many of them also included additional services like homebuyer counseling homelessness and stability was another focus of many of the housing trust funds.

Seven of the cities had programs addressing homelessness and had programs for some kind of rental assistance.

“But among those cities, there wasn’t really a consistent use of funds,” MacKinnon said. “They got used in a variety of ways, including building facilities or supportive or transitional housing or direct aid to nonprofits. And then some prevention and housing stability. The most important piece of researching other cities though, was their ability to be flexible.

“Every city has something totally different with different restrictions. This is a benefit of housing trust funds and we think can also be a benefit of the MIHDB fund, federal funds, bond funds and other dollars that we typically use. They’re very strict in their requirements. And because of that, we can get a lot of a prescriptive approach to the programs that we do. And sometimes this leaves gaps because gaps that can’t be addressed by the funds that we are typically allocating.”

She said the fourth, they researched how to identify those gaps.

“So what kind of gaps can this fund potentially fill,” she asked. “We found some significant gaps in the development program, particularly in the requirements of the federal funds. Federal funding requires things like a 120-day environmental review, and things like that often discouraged developers from participating or just not taking, not participating in our programs. CDB dollars, which is another federal fund. These can’t be spent on vertical construction. So that really limits how much funding we can give and the flexibility of what developments we can fund and where those developments are. And we generally feel that having a more flexible funding source for development can attract more developers and affordable development throughout Dallas.”


Fixing the home repair problem

Another gap that needed to be addressed is the home repair gap.

“We’ve identified some gaps that aren’t directly related to the repair itself but more two issues surrounding the repair, one of those is some difficulty in attracting and attracting and keeping contractors,” MacKinnon said. “We understand that a lot of the expensive bigger repairs that most of our clients need offer minimal profits to contractors. We understand that there’s limited flexibility on change orders which are often quite expensive, and we have no way to incentivize quick timelines.

“Homeowners have difficulty meeting some of the requirements in order to have the repairs done as an example. Some seniors may not have a place to go if they need to leave their home, nor do they have the funding to rent a place or stay in a hotel while the repairs are being done. Or they might not have anyone to help them move their furniture. And both of those are things that we haven’t been able to help both in the past. And then with homebuyer assistance. We’re hopeful that we’re looking for ways to expand operations to serve households earning up to one 120% AMI.”


Report summary

Based on all of that research, MacKinnon made the following recommendations for how the city plans to allocate the fund.

“So development we believe should take the majority of the funds based on all of the research, but instead of making a broad expansion to the funding, we want these funds to target developments that we think and have the policy and work well with our goals for this city,” she said.

“We’d like to incentivize our developments that provide deeper rental affordability or offer affordable homeownership opportunities. We want development that provides missing middle housing types, larger units for family housing or housing for homeless populations. And we’d also like to use this to focus development in our targeted areas once we get those implemented. It’s important to note that we’re estimating $6 million.”

MacKinnon proposed that 10% of the fund go to the Homebuyer Assistance Program to work on that homeownership opportunity.

“We want to use it to bolster our existing Homebuyer Assistance Programs as needed and identify ways to increase opportunities for applicants earning 120% Ami and below. Home Repair and neighborhood revitalization we believe both should get around 15% of the fund and home repair will be an increase to our general home repair programs. In addition, we’d like to analyze those program gaps that we mentioned before. Neighborhood revitalization will be a way for us to incentivize infrastructure services, home repair and amenities in the neighborhoods that we target along with our Dallas housing policy.”

She said that they would be able to target these funds to the neighborhood needs rather than taking a broad sweep at all of the neighborhood and proposed setting aside about 5% of the fund for pilot programs.

“This is kind of that flexibility piece that we were looking for that’ll allow us to respond to issues,” she said. “It wasn’t addressing new concerns. So the top of the list is funding some recommendations from the anti-displacement pool to the toolkit that gets implemented or other stability, other stabilization efforts as we do further research on that. We also could use that to start funding the MIHDB on site units. It is written into the policy that they can get some development funds reimbursement. But essentially, we want these funds to exist to respond to needs as they’re identified.”


The bottom line

The final piece of the fund is the administration costs.

“The code allows us to spend $300,000 or 10% of the funds received the previous year on administrative expenses, whichever of the two is greater,” she said. “Since we did not start receiving any funds until this fiscal year, we’ve been allocated $300,000. This year, and next year we’ll get 10% of what we received this year.…

“This is supposed to be a self-sufficient program. We intend to support some research on further refinement of housing programs. And as we extend or as we use these funds to extend other programs and bring in additional applicants, we intend to hire some additional staff to support those next year with the larger fund. We intend to maintain those enhancements and identify some other opportunities for research data, neighborly systems, which is our case management system and other important features that let us actually run our programs.”

She concluded that for their immediate proposal with the $4.4 million that was received, they would like to make $2.5 million of the fund available immediately in the Notice of Funding Availability for development.

“We would like to increase the budget for the Senior home repair program by $1 million,” she said. “We feel this aligns with the top two priority programs that residents responded to in the survey and it aligns well with our Dallas housing policy. The next steps for this are to continue to implement the MIHDB program and collect additional fees as they’re received.”






Diane Xavier received her bachelor’s degree in Journalism from Texas A&M University in 2003. She has been a journalist for over 20 years covering everything from news, sports, politics and health....

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