New Neighborhood Empowerment Zones promote affordable housing

Res NEZs 910
Neighborhood Empowerment Zone #9 – geographic area approximately 390 acres. Right: Neighborhood Empowerment Zone #10 – geographic area approximately 373 acres. – Photo courtesy of City of Dallas Office of Economic Development

 

By DIANE XAVIER

The Dallas Examiner

 

With the rising cost of housing and property taxes, affordable housing has been a growing concern for Dallas Residents. Dallas City Council members approved seven new Residential Neighborhood Empowerment Zones during its Jan. 22 Council meeting. The purpose of NEZs is to provide more affordable housing.

Chapter 378 of the Texas Local Government Code provides for the creation of Neighborhood Empowerment Zones that must promote any of the following: an increase in economic development in the zone, an increase in the quality of social services, education, or public safety for residents of the zone or creation and/or rehabilitation of affordable housing in the zone.

During the meeting, a motion was approved to create residential NEZs to support tax abatements for the construction and renovation of single-family homes, duplexes, and multifamily developments located within zone, including within Tax Increment Financing Districts; and provide development grants in amounts equal to development fees and certain development-related costs to support construction and renovation of single-family homes, duplexes, and owner-occupied multifamily developments located within the zone.

The seven areas of Dallas that would be designated are the LBJ/Skillman area, Casa View, Hamilton Park, Vickery Midtown, West Dallas, the Forest District west of Fair Park, and the Bottom and Tenth Street Historic District.

Dallas has a lack of new homes under $300,000, according to data produced by MetroStudy.

The study reported that about 20 percent of Dallas/Fort Worth’s population resides in the city of Dallas, but the city currently produces only two percent of DFW’s new owner-occupied housing priced under $300,000 each year. Also, since 2007, more than 50 percent of the housing construction in the city has been priced above $350,000, which has resulted in an aging of lower-priced housing stock and a hollowing-out of housing stock affordable to families earning between 60 percent and 120 percent of area median income, essentially the middle class.

With NEZs, property owners can qualify for tax breaks if they build affordable housing. Also, there would be special tax abatements geared toward police officers, firefighters, teachers and health care workers in order for them to have opportunities to live in the NEZ areas.

Council member Chad West of District 1 was in support of the measure.

“This is an exciting day for affordable housing,” West said. “The city produces only two percent of DFW’s new owner occupied housing that is priced under $300,000 a year. Put that into numbers. By the third quarter of 2019, Dallas area produced 17,366 homes under $300,000. Of that number, the city of Dallas produced 412, which is ridiculously low. Today, we are taking a step to change that and change the momentum. Based on the current funding allocation which isn’t enough and we need more for future budgets, we are going to be looking at 125 new homes and 75 reconstructions. But the bigger thing that is coming from today is igniting the program for the private sector and giving them the encouragement to know you can come back from the suburbs where you know you are building the $300,000 and less homes today because we want you here, we want these homes and we are going to put the policies in place to make it easier to build these homes in Dallas.”

Council member Omar Narvaez of District 6 expressed that the item was a win-win.

“The big winners of this are the residents that are going to be inside of these NEZs across the entire city of Dallas,” Narvaez said. “And that ultimately means that Dallas wins.”

Council member Casey Thomas of District 3 discussed how the plan would benefit his district.

“My main priority as it relates to housing, specifically for District 3, is tools that can prevent gentrification and displacement of current residents,” Thomas said. “I’m glad that I will be having a NEZ in my district. A lot of my constituents who live in the area of the Red Bird area are concerned about potential displacement, gentrification and creating the opportunity for young families to be able to move into the area so we can continue to have the quality and density that we need and also the quality as we begin to see and continue to see projects like Red Bird Mall develop to provide the quality of retail that we need so badly in Oak Cliff.

“We want to make sure that anybody who has the opportunity to live in Dallas, and that is our biggest challenge, we have not had enough housing stock opportunities to grow our middle class. Anyone who is looking to own a home in Dallas – the Southern Sector in particular – this is going to be a tool to help make that happen.”

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