Affordable Housing and Mixed-Income Strategies A...

DALLAS, TEXAS

Affordable Housing and Mixed-Income Strategies

A ULI Advisory Services Panel

FEBRUARY 28 - MARCH 4, 2016

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• The mission of the Urban Land Institute is to provide

leadership in the responsible use of land and in

creating and sustaining thriving communities

worldwide.

• ULI is a membership organization with nearly 40,000

members, worldwide representing the spectrum of

real estate development, land use planning and

financial disciplines, working in private enterprise and

public service.

• What We Do:

– Conduct Research

– Provide a forum for sharing of best practices

– Write, edit and publish books and magazines

– Organize and conduct meetings

– Direct outreach programs

– Conduct Advisory Services Panels

About the Urban Land Institute

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• Since 1947

• 15 - 20 panels a year on a variety of land

use subjects

• Provides independent, objective candid

advice on important land use and real

estate issues

• Process

• Review background materials

• Receive a sponsor presentation &

tour

• Conduct stakeholder interviews

• Consider data, frame issues and

write recommendations

• Make presentation

• Produce a final report

The Advisory Services Program

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The Panel

Chair

Tony M. Salazar

President - West Coast Division

McCormack Baron Salazar

Los Angeles, California

Panelists

Kent Collins

Principal, Centro Development, LLC

Austin, Texas

Nancy Montoya

Principal, TTA

New Orleans, Louisiana

Dionne Nelson

Principal and Chief Executive Officer

Laurel Street Residential

Charlotte, North Carolina

Philip Payne

Principal and CEO, Ginkgo Residential

Charlotte, North Carolina

Meaghan Shannon-Vlkovic

Vice President and Market Leader, Enterprise

Community Partners

Atlanta, Georgia

Mark Shelburne

Senior Manager, Novogradac & Company LLC

Raleigh, North Carolina

Jake Wegmann

Assistant Professor, Community and Regional

Planning Program, University of Texas at Austin

Austin, Texas

Roger L. Williams

Principal, RW & Associates, LLC

Potomac, Maryland

Stockton Williams

Executive Director, Terwilliger Center for Housing

ULI-the Urban Land Institute

Washington, DC

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Sponsor

City of Dallas

Mayor and City Council

Karl Zavitkovsky

Bernadette Mitchell

Heather Lepeska

Timothy Glass

Thanks to the more 70 individuals for participating in the

ULI Panel interview process.

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The Assignment

The City asked the Urban Land Institute to assemble a panel of housing,

land use and economic development experts to:

• Interview stakeholder groups identified by the City and ULI;

• Review the City’s existing housing policies and practices;

• Review best practices of other municipalities related to the

development of affordable and mixed-income housing; and

• Present to the Housing Committee suggested policies and practices

for inclusion in the City’s new housing policy.

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Summary of Major Recommendations

• Muster the political will to address the affordable housing crisis

• Create a Chief Executive Officer of Housing and Community Investment

• Create a Housing Trust Fund with dedicated revenue sources

• Identify a limited number of housing and community revitalization focus areas

• Expand housing choices in high opportunity areas

• Create a predictable, transparent and efficient housing policy –Citywide

• Enough Planning – Time to Act

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Growing Diversity …

Source:

Neighbor-

hoodPlus

Plan, p. 8

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Growing Diversity … But Growing

Inequality of Opportunity

Source:

Neighbor-

hoodPlus

Plan, p. 8

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Source:

NeighborhoodPlus

Plan, p. 13

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Source: NeighborhoodPlus Plan, p. 14

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Dallas

City Hall

Source: NeighborhoodPlus Plan, p. 14

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Different Neighborhoods, Different Housing

Conditions

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Conditions

• Booming multifamily construction

• High-opportunity stability

• Aging multifamily concentrations

• Gentrification

• Emergence

• Working-class vibrancy

• High vacancy

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Conditions




• Gentrification

• Emergence


• High vacancy

Source: Jake Wegmann

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Conditions




• Gentrification

• Emergence


• High vacancy

Source: Google Maps Streetview

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Conditions




• Gentrification

• Emergence


• High vacancy

Source: Google Maps Streetview

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Project-By-Project Development Approvals

Source: www.dallascityhall.com

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Why Does This Matter?

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Individual councilmembers have few political

incentives to negotiate for affordable housing within

their districts..


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Individual councilmembers have few political

incentives to negotiate for affordable housing within

their districts..


Without a transparent, consistent entitlements

approval process, Dallas is missing out on

opportunities to trade upzoning for affordable

housing.

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Why Does This Happen?

• Opaque, inconsistent process for project review,

approval, and accountability

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• Council-manager structure of city government

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• Two-year election cycles

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• Two-year election cycles

• Aldermanic privilege

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The Tools, Funding Mechanisms and Partners

• List of resources available to developers

– Mixed-income & single family

– Inform & incentivize developers

• Affordable multifamily & single family preservation program

– “Naturally occurring” affordable housing

– LIHTC and other subsidized properties

• Aging in place housing approaches

– New construction and repair programs

• Creating a flexible source of funding (i.e., Housing Trust Fund)

• City and institutionally owned land = development opportunity

• Inclusionary zoning or payment in lieu program for mixed-income strategies in distressed and higher income areas.

• Community engagement process is critical for success

Maximizing and leveraging tools will be critical to successful implementation

of housing strategies. The panel heard…

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Tools, Funding Mechanisms and Partners

• Multifamily mortgage finance

– HUD, Fannie Mae and Freddie Mac

• Low Income Housing Tax Credits (LIHTC)

– 9% and 4% LIHTC

– Qualified Allocation Plan (QAP)

• HOME Federal Funding

– Gap financing, rental and mortgage assistance

• Community Development Block Grant (CDBG)

– Youth & senior programs, housing assistance, repairs, mortgage assistance, homeownership, infrastructure improvements

• HUD 108 Loan Guarantee Program

– Economic development, housing rehab, public facilities and other physical development for revitalization

Current toolbox includes…

Lancaster Urban Village, Dallas

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• New Market Tax Credits

– Administered by Dallas Development Fund (under Economic Development)

– Spurs economic development in underserved neighborhoods

• Public Private Opportunity Fund

– General Obligation Bonds (GO Bonds)

– Supports economic development that creates jobs and private investment

– Mixed use & residential must be reviewed on a case-by-case basis and

require 20% affordability


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• Tax Increment Financing (TIF)

– Special purpose districts (18 of them citywide)

– Supports improvements and subsidizes eligible projects within the district

– Subsidy for residential requires a set aside of 20% of the units at 80% of AMI

($56,300 for a family of 4)

• Land Bank Authority

– Vehicle to acquire unproductive, vacant and developable lots

– Properties acquired through tax lien foreclosure

– Sold to nonprofits and for-profits for deed restricted resale to families earning

<= 115% AMI


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Partners

– Dallas Housing Authority (DHA)

– Dallas Independent School District (DISD)

– Dallas Habitat for Humanity

– The Real Estate Council (TREC)

– Community Housing Development Organizations (CHDOs)

– Inclusive Communities Project

– Dallas Area Rapid Transit (DART)

– Community and Service Organizations

– For-profit developers

Building collaboration and capacity through partnerships will be critical for

collective impact

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Enough Planning …

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Enough Planning … Time To Act!!

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Enough Planning … Time To Act!!

Plan Responsibility

Consolidated Plan City Manager

NeighborhoodPlus City Manager

GrowSouth Mayor

Dallas Housing Authority Five-Year Plan Dallas Housing Authority (DHA)

buildingcommunityWORKSHOP plan City Manager

Middle-Income Housing Proposal The Real Estate Council (TREC)

Housing For All

North Texas Community Development

Association

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PRINCIPLES

• “GO BIG”

– Vision

– Leadership

– Political Will

– Innovation

– Goals and Metrics

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PRINCIPLES

• “GO COMPREHENSIVE”

– Housing only part of solution

– Work in both economically distressed and high opportunity

areas

– Public / Private Partnerships

– Land banking

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PRINCIPLES

• “GO LONG-TERM”

– Commitment beyond terms and cycles

– Consistent and transparent policies and procedures

– Accountability

– Data-driven analysis reporting

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PRINCIPLES

• “GO REGIONAL”

– Include the City of Dallas and adjacent regions in affordable

housing and economic opportunity initiatives

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PRINCIPLES

• “GO SUSTAINABLE”

– Financial and Economic

– Environmental

• Sustainable

• Resilient

• Healthy

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RECOMMENDATIONS

• Establish an independent Housing and Community Investment

Task Force

• Appoint a CEO to lead the Task Force

• Establish a Housing Trust Fund financed by dedicated revenue

sources

– GO Bonds / Payments in lieu / Fees / Other?

• Explore inclusionary housing requirements with payments in lieu

• Pursue a public and institutional land use strategy

• Expand housing choice voucher opportunities

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RECOMMENDATIONS

• For TIF and other City funded projects:

– Create a sliding scale to allow affordable units at below 80%

AMI

– Require affordable units or a payment in lieu

– Require voucher acceptance

• Use Upzoning to create more affordable units

– MF-1(A), MF-2(A), MV-1, MV-2 – Increase density and height

limitations

– 51A – Greater utilization of form based zoning

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Implementation: Taskforce Concept

• Independent – Led by a highly-respected civic leader as Chief Executive Officer of

Housing and Community Investment

– No or minimal salary

– Reports to City Council and Mayor

• Team includes a day-to-day manager and team of consultants from Dallas’ best

business and nonprofit organizations

• Supported by City staff and a community stakeholder group

• Urgent change agent with a data-driven approach

– Goal-oriented and efficient

– Work likely accomplished in approximately 18 months

• Serve as a model for trust between key constituents

– Brings together the various plans and recommendations for housing

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Implementation: Taskforce Roles and Responsibilities

• Set clear and transparent goals and objectives with City Council approval

• Create a stakeholder group including:

– Community leaders

– Real estate and business community

– Healthcare and education providers

• Assess and recommend changes to the housing and community investment policies, procedures and structures

– Based upon data-driven criteria and

– Including benchmarks and measurements

• Implement changes as approved by City Council

• Review and approve of all housing and community development decisions prior to presentation to City Council for approval

• Success measured by a scorecard of objectives and reported quarterly

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Implementation: Taskforce Organization

Mayor and City Council

City Manager

City Departments/Staff

Taskforce CEO

Taskforce Manager

Consultant Team

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Implementation: Improvement in Priority Areas

• Identify priority neighborhoods for focused improvement

– Select based upon the existence or ability to develop major systems

– At least three systems should be required

• Major employers

• Existing housing redevelopment

• Quality school opportunities

• Healthcare providers

• Transit options

• Major commercial/retail anchors

• One priority neighborhood in core Southern Dallas recommended, such as Lancaster corridor,

Frazier, UNT@Dallas, SW center mall, Cedars or Wynnewood Village.

• One priority neighborhood that builds upon the current momentum near the downtown core,

such as West Dallas, Fair Park or Bishop Arts

• Plan and select catalytic projects in these areas that provide the opportunity for true

revitalization

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Implementation: Affordable Units in High Opportunity Areas

• Assess current land holdings and independently acquire land for mixed-income

development in high opportunity areas

• Work with other institutions/agencies to create joint development plans (e.g. DART, DISD,

Dallas County Hospital)

– Obtain a memorandum of understanding between key partners for better coordination

of development activities

– Success will be limited if mixed-income developments don’t effectively leverage

transportation, education and healthcare

• Increase the placement of Housing Choice Voucher holders by leasing to a partner entity

that then subleases to voucher holders

• Partner could serve as a guarantor and streamline the rental process

• Program can be modeled after corporate rental program

• Engage a third party listing service for a more transparent and comprehensive tracking of

available affordable units (e.g. SocialServe.com)

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Implementation: Housing Trust Fund

• Management Options:

– City/Dallas Housing Finance Corporation DHFC

– Community Development Financial Institution (CDFI)

– Nonprofit

• Potential Funding Sources:

– General Obligation Bonds

• Sell approval for housing in the next bond issue

• Communicate the importance through a coordinated marketing campaign

– Seattle: Levy campaign

– Charlotte: Chamber led campaign

– Perform an outside analysis of viability of linkage fees and payment in lieu of providing affordable units

– Re-directing TIF funds from projects that opt out

– Allocate a portion of CDBG or other existing City HUD allocations

– Foundation and Corporate grants

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Implementation: Housing Policy Changes – “Quick Wins”

• Explore continued opportunity to develop Low Income Housing Tax Credit (LIHTC) projects

– Make written comments to Qualified Allocation Plan

– Move forward existing applications for preservation projects

– Work with other cities and developers with similar concerns

• Establish a compliance monitoring team to track affordable units in existing and future projects

• Establish appropriate affordability periods for units in city-funded projects

• Identify and redeploy funds from stalled projects

• Increase code inspections and review of housing stock

• Develop a GIS-based system of prioritizing, documenting, monitoring and correcting code

violations

• Evaluate the possible use of homestead preservation districts

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Best Practice: Leadership and Political Will

Housing NOLA Plan: launched 2015

Managed by Greater New Orleans Housing Alliance, in partnership with the City,

Foundation for Louisiana, local business and community leaders.

5-year goal to create 5,000 affordable units by 2021 – focused on 80% AMI and

below ($48,000). New development in opportunity areas.

City has approved $16 million in current budget, approved a density bonus,

seeking state legislation to provide additional dedicated revenue.

“Affordable housing is one of the top priorities of my administration, and we are

pleased that many of the City’s initiatives are reflected in Housing NOLA.”

–Mayor Mitch Landrieu

Takeaway for Dallas: Set bold goals, commit real money, exercise political will.

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Best Practice: Dedicated Revenue Source

Charlotte Housing Trust Fund: established 2001

Gap financing to support development serving households earning 60% AMI and

below ($38,500).

Capitalized by a portion of proceeds from City GO bonds, backed by property taxes.

Has committed $93 million, leveraged $544 million in total development, produced

5,542 units.

Most recent bond issue (2014) passed with 60 percent of the vote – two-year

campaign led by Chamber of Real Estate and Building Industry Coalition, Greater

Charlotte Apartment Association, American Airlines, and others.

Takeaway for Dallas: Include housing in the GO bond, build a coalition to make the

case to voters.

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Best Practice: Inclusionary Housing with Incentives

Palm Beach County Workforce Housing Program, established 2004

Requires new developments to provide units serving household earning 60 – 120

percent AMI in exchange for additional density allowances on a sliding scale.

Developers have flexibility to meet requirements by paying an in lieu fee, building unit

offsite, or purchasing and deed-restricting market -rate units.

To date more than 1,400 affordable/workforce units approved as part of 36 developments

+ nearly $900,000 of in-lieu fees collected from 3 developments.

“Palm Beach County has worked tirelessly to bring all of our housing partners to the table

in an effort to increase the availability of workforce housing in all areas of the county.”

–Palm Beach County Administrator Verdenia Baker

Takeaway for Dallas: Generate inclusionary development with incentives, engage the

private sector.

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Best Practice: Strategic Use of Public Land for Mixed-Income

Montgomery County (MD), since late 1980s

Maintains a comprehensive county land inventory and has facilitated mixed-income

housing on multiple county land holdings.

All capital improvement projects or agency plans to redevelop or dispose of county-

owned land are required to assess the potential for affordable housing.

County Council has passed legislation that expresses a preference for at least 30

percent affordable housing on public land.

Current sites considered for future mixed-income: new police station, former police

station, a former public fire safety- training site, and a future fire station.

Takeaway for Dallas: Seize the opportunity in land ownership to support mixed-income

development.

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Best Practice: Regional Housing Opportunity

Chicago Regional Housing Initiative, 2011 - 2014

9 regional housing authorities manage a consolidated pool of rental assistance

available through a single application for developments in opportunity and revitalization

communities across the region.

The Metropolitan Planning Council, a regional planning organization, coordinates

application process and helps broker developments.

Initiative has provided assistance to 467 apartments in 30 developments across the

region made up of nearly 2,000 mixed-income multifamily developments

“Knowing that we need low- and high-skilled labor to be able to converge around jobs,

we need people of different incomes to be able to live around the region.”

–Marisa Novara, Metropolitan Planning Council

Takeaway for Dallas: Regional collaboration to expand housing opportunity can work.

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Best Practice: Comprehensive Community Redevelopment

The Villages of East Lake (Atlanta), since 2001

Mixed-income community of 1,500 market rate and affordable units.

Prior to a comprehensive redevelopment:

o 96% poverty rate,

o 90% of residents had experienced violent crime

o 5% of 5th graders met state math standards

o No new real estate investment in decades

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Best Practice: Comprehensive Community Redevelopment

The Villages of East Lake (Atlanta), since 2001

Mixed-income community of 1,500 market rate and affordable units.

As a result of redevelopment

o Area has attracted more than $175 million in new investment

o 70 % public housing residents employed or in school or job training

o Crime down 73% – violent crime down 90%

o 98% students met or exceeded state standard

Takeaway for Dallas:

Comprehensive community

development can work.

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Best Practice: Sustainable Development

Austin S.M.A.R.T Housing Program, since 2000

Encourages accessible, mixed-income development by providing development fee

waivers and an expedited review process for developers who set aside 10% of housing

units as affordable.

The program has produced 15,351 units affordable to households earning 80% of MFI or

less.

TOD requirements: a bus route located within ¼ mile of the development for multifamily/

½ mile for single family.

The Green Building program rates single family homes, multi-family residences, and

commercial structures regarding siting, energy, water, materials, indoor air quality, and

education and innovation.

Takeaway for Dallas: Sustainable mixed-income development can work.

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Summary of Major Recommendations

• Muster the political will to address the affordable housing crisis

• Create a Chief Executive Officer of Housing and Community Investment

• Create a Housing Trust Fund with dedicated revenue sources

• Identify a limited number of housing and community revitalization focus areas

• Expand housing choices in high opportunity areas

• Create a predictable, transparent and efficient housing policy –Citywide

• Enough Planning – Time to Act

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