Dallas Has Been Openly Funneling Affordable Housing Money Out of Downtown for Years

Categories: City Hall, Housing

Enjoy the view of downtown all you want, poor people. Just don't defile it with your presence.
HUD spent four years building its recently unveiled case against the city of Dallas, compiling statistics and gathering evidence to show that for years the city been illegally promoting residential housing segregation.

Evidence that the city was steering affordable housing outside of downtown, the claim that formed the seed of HUD's investigation, was right out in the open all along.

Dallas' City Center TIF, a redevelopment zone that encompasses most of downtown, has a $5 million pot of money earmarked for affordable housing. The condition? It had to be used outside the TIF district.

Karl Zavitkovsky, the director of the city's Office of Economic Development, offered a brief explanation.

"When the City Center TIF was formed in the 1990s, an affordable housing line item was created in the budget and financial plan," he wrote in an email. "The initial TIF plan specified that the affordable housing line item could be utilized to support affordable housing citywide. This policy was subsequently modified and funds allocated to affordable housing in the City Center TIF must now be expended on downtown projects."

The city says it is still in the process of reviewing answers to followup questions on how the money was spent and why it was set aside in the first place, which Unfair Park submitted nearly a month ago.

Reached Monday, Karl Stundins, who works under Zavitkovsky and oversees the city's TIFs, declined to comment further, citing pending litigation.

Documents available on the city's website provide some clues. At least $1.1 million, for example, went to the city's Affordable Housing Cost Participation Program, which focuses on financing single-family homes in some of the city's poorest neighborhoods.

See also: The Feds Say Dallas City Hall Has Promoted Racial Segregation in Housing Projects for Years

A 2007 presentation explains that land downtown was too expensive, and building affordable housing elsewhere "maximizes the public benefit" of affordable-housing dollars.

This is weird in a couple of ways. One is that City Center appears to be the city's only TIF -- it stands for tax-increment financing -- with such a provision. There are others areas (e.g. Maple/Mockingbird and Fort Worth Avenue) with pots of money set aside for affordable housing, but those are limited to projects within a district's boundaries.

The other is that it seems to go against the very nature of TIFs, a form of tax break designed to spur development by funneling future tax revenue gains created by redevelopment back into the neighborhoods that generated the revenue in the first place. So why send cash elsewhere unless it's seen as an economic benefit for the district?

See also: How Dallas City Hall Put Us Back Behind a 25-Year-Old Eight-Ball on Segregation

Former City Councilman Craig McDaniel, whose district included much of downtown and who was involved in the creation of the City Center TIF, says he doesn't recall the $5 million affordable-housing set-aside but that he and other policy makers at the time were genuinely interested in creating a mix of housing options -- upscale condos, but also low- and moderate-income apartments -- downtown.

Part of the reason for that was the then half-decade-old Walker consent decree, in which a federal court required the city to demonstrate that it was taking steps to desegregate housing. Part, McDaniel says, was that they believed an economic diversity was necessary for downtown's success.

Aside from the $5 million, McDaniel says the City Council included a provision requiring developers to make a certain percentage of their units affordable. By the city's own admission, however, the number of affordable units "has not kept pace with market rate units."

"I think the delivery fell short. I don't know whether the numbers didn't come about as we had hoped we would, don't know whether it was because we got out-negotiated or done an end-around by developers who took advantage of our programs and didn't deliver," McDaniel says.

See also: Dallas City Hall Claims HUD Was in on Local Misdeeds. They Were Still Misdeeds.

The city seems to be taking steps to change that. The TIF was recently renewed with an additional $6.5 million devoted to affordable housing. All of it, as Zavitkovsky noted, is to be spent in the district. The renewed focus seems to be working.

Send your story tips to the author, Eric Nicholson.

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Dallas is full of peckerwoods.

JimSX topcommenter

I am sure Craig McDaniel is sincere in supposing that maybe the city "got out-negotiated or done an end-around by developers who took advantage of our programs and didn't deliver." But he and other present and former council members need to read the HUD report closely. What they will see there is that, on their watch, the city deliberately released developers from affordable housing commitments before either the law or their contracts released them, even after HUD warned the city to stop doing that. The city also signaled broadly to developers that it was never going to monitor or inspect them to see if they still had affordable units for rent. The heart of the Lockey MacKenzie complaint to HUD, of course, was that the city warned them not to propose too many affordable units -- a number that would have complied with federal law -- and then punished them when they did anyway. As I say, I am sure McDaniel is speaking sincerely, but since his district included downtown in the time period involved, he needs to go over the report carefully and make sure he is not marrying himself to positions that can only blow back on him as this all unfolds.   


It's not the government's responsibility to "provide affordable housing".

holmantx topcommenter

Downtown is already the repository for all the homeless.


I have one question:

When does Karl Zavitkovsky leave City Hall for good, "to spend more time with family"? Just like Jerry Killingsworth...............right now Killingsworth is havin' some breakfast with mamma before they sit down in the recliners and read the paper for the next couple of hours................then its nap time..................

holmantx topcommenter

@JimSX  You are turning into the Church Lady with the Racism schtick. “Wellisn't that SPE-CIAL?!”, "How con-VEEN-ient!", and “Could it be...SATAN?

What is this?  The friggin’ Inquisition?

The City ought to get out of this with the least amount of pain to the citizen.  Of course we can’t win it.  They’ve moved the goal posts.  The rest is bullshit.  The Big Stick is the race needle didn’t move.

But you are bogged COMPLETELY down in HUD’s Ah AH! Writ, like Dana Carvey’s SATAN? slam is supposed to . . . what? Everyone is supposed to hang their head in shame? Dallas doesn’t give a shit.  And I’m talking about the politicians who have been porking HUD and putting pressure on the staff to push the projects their way.  And you’ve got the North Dallas bunch helping push. 

It’s everywhere.  Across this nation City’s do not want all the homeless and the subsidized housing concentrated in their urban cores – the neighborhoods with the greatest density of people per square mile already.  They are trying to regenerate.  Brutha can you let up a little?

Downtown has done more than its fair share of taking care of the poor. 

Enough of the advice on downtown when none of you would live there (or do now) if your advice were actually taken.  Your kooky demands run counter to why you live where you live in the first place. 

Just stop taking the money, Dallas. 

Or maybe your Neighborhood Association where YOU live should just let the City know that your location wants in on the Pork? 



I thought so.

TheCredibleHulk topcommenter


"The initial TIF plan specified that the affordable housing line item could be utilized to support affordable housing citywide. . . ."

It seems they thought that this clever little clause kept their collective posterior covered adequately. It also seems that they have been "pantsed" by L & M.


@AdamsonScott and usually "the government" (as if there is only one) does not provide it in the way you imply. Entities offer incentives (or are supposed to when they say they are) in exchange for not pricing out certain groups for a certain percentage. 


@AdamsonScott If you want the government to give you, as a developer, money to build your project then it comes with some requirements on how that money is spent. Don't want the strings? Get your money in the private sector. It's that simple. With public money comes public responsibility.

holmantx topcommenter

@lakewoodhobo @holmantx 

Vacate the Lakewood Country Club parcel and move the homeless shelters to that location and put in 500 subsidized houses, then see how your neighborhood fares.

Downtown has done its share of the burden.  

Time to spread the wealth.

holmantx topcommenter

@ThePosterFormerlyKnownasPaul @holmantx @JimSX 

On one of HUD's pages extolling the virtues of this new rule strengthening the race card as a tool to beat Cities over the head with, they list a summary of cases they took action on.

In a few of the summaries was the accusation that the neighborhood or community voiced opposition to the subsidized housing planned for them.

HUD bragged it was the opposition itself which indicated racism.

So all a developer has to do is propose a HUD assisted development in Highland Park (or any other neighborhood) and that would be the basis for HUD action AND the developer collects a whistle blower fee.

That's why I said early on that it is now a target rich environment - a developer proposes 500 houses, local associations oppose it, developer blows the whistle, gets a 25% finders fee from the courts, and HUD whips out the Disparate Impact divining stick and collects a fine.

They got some open field running room with this little racket.


@holmantx @JohnSmallBerries  Again... Affordable housing typically is not about "the homeless." It is a about those at modest incomes (typically around median) being able to afford housing.

holmantx topcommenter

@JohnSmallBerries @holmantx  

The impact of concentrating thousands of homeless and 1,000+ affordable housing units on a high density Downtown neighborhood trying to re-invent itself is profound.

We are not striking a balance, the Metro is using downtown as a dumping ground.

It's time to spread the wealth around.

Downtown has done its part.

It is useless for sheep to pass resolutions in favor of vegetarianism while wolves remain of a different opinion. - William Ralph Inge

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