Home prices in every corner of Dallas have increased over the past five years — with prices rising fastest in the lowest-cost neighborhoods, according to a new analysis commissioned by the city.
The median sales price of a home rose from $133,300 in 2018 to $395,788 in 2023.
City officials point out that no neighborhood lost value — a positive sign — but say the upward march of home prices also drove a decline in affordability and increased displacement pressure around Downtown Dallas.
“The entire city has lifted up in sales price, and that obviously puts a lot of pressure on our lower- to moderate-income families in the city to afford to buy a home. And we’ve seen rental prices go up as well,” said Thor Erickson, assistant director of Dallas’ Office of Housing and Neighborhood Revitalization.
The market value analysis was completed by consultants Reinvestment Fund, Inc., who were hired to update a similar 2018 study. It breaks the city into nine different market types, and measures sales prices, investment activity, financial stress, blight and vacancy rates. The city uses these analyses to guide policy decisions.
In the least expensive areas, home values have more than quadrupled. In 2018, these neighborhoods had a median sales price of $41,500. By 2023, the neighborhoods with lowest home sales prices saw the median at nearly $193,000. These neighborhoods represented about 15% of the Census block groups analyzed in the study, and are located mostly in southern and southeastern Dallas, around Love Field and in the far northeast corner of the city.
The city’s most expensive neighborhoods also saw a rise in housing prices, though less dramatic than in the least expensive areas. They saw median home sale prices of $1.4 million in 2023, up from just over $1 million in 2018, a roughly 40% increase. These areas – representing about 4% of the census block groups analyzed – are concentrated in north and northeast Dallas.
In a city with a median family income of $58,200, fast-rising home values are dampening the dream of homeownership for more and more Dallasites. Rent increases in recent years have cut away at the potential for saving up a down payment, and record-high interest rates add to the challenge. Erickson said decreasing affordability is driving people who want to buy houses out of the city, accepting the longer commute times in exchange for cheaper homes built on cheaper land.
A recent study estimated Dallas has about 60,000 too few homes that people with lower and moderate incomes could afford to buy. Another report puts the city’s affordable rental housing deficit at over 33,000 units, which could double by 2030.
Housing policy
This crunch has led to increased calls for major spending on all types of affordable housing – for lower- and middle-income people, in homes for sale and apartments for rent, in the form of new construction and preserving older homes.
A coalition of more than 100 nonprofits, businesses and faith groups wants the city to spend a fifth of the $1.1 billion 2024 capital bond on affordable housing.
The city appears poised to spend significantly less than that, though the city council has yet to set final spending levels before a May election. And some council members want to rewrite the city’s rules so homes can be built closer together and to allow duplexes and triplexes to be built in any area zoned for single-family homes.
It’s a controversial proposal, and a nascent conversation at City Hall, but advocates say cities like Houston, Cincinnati and Minneapolis have successfully reformed land-use policy to increase affordable homeownership.
“Reducing minimum lot sizes and increasing the number of residential dwelling units allowed on a lot will allow for the development of additional dwelling units in residentially zoned areas,” according to a memo written by City Council members Chad West, Jaime Resendez, Jaynie Schultz, Adam Bazaldua and Paula Blackmon in early November.
“The solutions and the amount of investment needed is just tremendous, and our needs to keep up with our current infrastructure needs and maintain what we have and to create some new things that continue to make Dallas an exciting place – it’s not just one solution,” Erickson said.
At the same time, Erickson points out there are still good-quality, affordable homes in Dallas, even if they are fewer and further between. And the city is increasing efforts to help people buy them.
“People are still buying homes. We used our down payment assistance program more last year. As interest rates are higher, there’s more of a need for down payment assistance,” he said.
In the near future, he said, the city will be doing even more, as it continues to implement a racial equity-focused housing policy approved in 2021. Black and Latino families are most affected by Dallas’ decreasing affordability because of racial wealth and income inequities. Over the years, city policies have helped drive that inequality by under-investing in working class Black and Latino neighborhoods while pursuing policies that limited access to opportunities and amenities to higher-cost neighborhoods dominated by white residents.
Gentrification
The goal of that policy is not just to address the long legacy of racial and economic segregation while making sure enough affordable homes are built, but to also cultivate dynamic neighborhoods across the city, Erickson said.
The market value analysis is being used to help identify 11 areas where the city will target investment to help preserve affordable housing, redevelop blighted areas, increase affordable homeownership and address infrastructure deficits. The strategy is also focused on tying housing policy to the city’s economic development efforts.
Erickson said the biggest challenge for the city is curbing the number of people at risk of being pushed out of their neighborhood because they can no longer afford to live there.
The market analysis found an increasing risk that people will be displaced by higher housing prices in neighborhoods near Downtown Dallas, especially in West Dallas, South Dallas and Deep Ellum. Developing policies and programs to reduce the harm from gentrification is part of the city’s new housing plan.
To do that, the city will need to help people preserve their homes through home repair programs, invest in new affordable rental units, and use city funds to subsidize building homes for sale at prices affordable to people living in these fast-appreciating neighborhoods, Erickson said.
“What I want to do with our work is make sure we’re investing in those places that are experiencing that change that’s more rapid, those gentrification areas,” Erickson said, “and make sure that we can work with our partners and bring our policies forward to ensure that people can continue to call Dallas home if they want to.”
Got a tip? Christopher Connelly is KERA's One Crisis Away Reporter, exploring life on the financial edge. Email Christopher at cconnelly@kera.org.You can follow Christopher on Twitter @hithisischris.
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