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Federal agency looking into claims of racial discrimination in Dallas’ affordable housing projects

Keren I. Carrión
Darryl Baker, a housing activist with the group Fair Share for All Dallas, delivered a complaint to the federal Housing and Urban Development alleging that the City of Dallas’ policies and practices violate federal civil rights laws.

The federal Department of Housing and Urban Development is investigating a complaint alleging that the City of Dallas’ policies and practices steer low-income housing into Black and Latino neighborhoods in violation of federal civil rights laws.

The complaint was sent to the city after Darryl Baker, a housing activist with the group Fair Share for All Dallas, delivered a detailed complaint to the federal department. The complaint also includes allegations that Dallas clusters these subsidized affordable housing developments into lower-income communities.

“We’re putting our thumb on the scale in a way that will guarantee that if you’re poor in this part of town, you’ll always be poor. And [that] this part of town will always be poor,” Baker said.

The complaint is the beginning of a process to figure out if the issues raised are valid, and to resolve the issue. HUD hasn’t validated the claims in the complaint. Federal statute requires HUD to complete its investigation into the issue within 100 days from receiving the original complaint, though the agency can extend that deadline.

But the stakes for Dallas are high, the agency said in its complaint.

“The acts alleged in this complaint, if proven, may constitute a violation of” multiple federal civil rights laws by the City of Dallas, the HUD complaint states.

In January, the City of Arlington agreed to pay nearly $400,000 to settle a fair housing lawsuit brought by HUD alleging that Arlington for blocking affordable housing opportunities for low-income families. Arlington officials denied wrongdoing, but agreed to the massive penalty to stay out of court.

The City of Dallas declined to comment on the complaint. A HUD spokesperson said the department won’t comment on open cases.

According to correspondence shared with KERA by Mike Daniel, a Dallas lawyer helping Baker to raise the fair housing concerns to the federal agency, Dallas received the complaint from HUD on February 7. The agency has given the city until April 25 to submit its initial response.

Low-income housing

The HUD complaint centers on the city’s role in the federal Low-Income Housing Tax Credit program, commonly referred to as LIHTC, which provides tax incentives to developers building housing for people whose incomes are lower than the median incomes in their area.

The program is administered by the Texas Department of Housing and Community Affairs, but local governments have a lot of power to help or hurt the chances of proposed projects qualifying for the federal tax credits.

Baker, a retired city employee with a background in architecture and planning, says the city routinely puts its thumb on the scale for LIHTC developments mostly in neighborhoods of color and not in majority-white neighborhoods.

The city has given its approval, removed barriers to projects moving forward, and in many cases financially subsidized housing for lower-income residents almost exclusively in neighborhoods that are majority non-white.

“We have an ecosystem that’s not sustainable, that’s not healthy,” he said. “I don’t know any other way to put it.”

In an interview conducted before the city received the HUD complaint, Dallas’ Director of Housing and Neighborhood Services David Noguera said the city throws its weight behind LIHTC projects where developers have earmarked units for a variety of income levels, from low-income households to people able to pay a market rate. The city’s goal is more mixed-income neighborhoods.

“We are not going to change decades of segregation overnight or through one project. However, we can make sure that any and every project that comes through the city has a mixture [of incomes]. So if it's in a high opportunity area, we want a mixture. If it's in a depressed community, we want a mixture because it's the only way we can influence history.”

Noguera said developers tend to favor southern Dallas, which is predominantly Black and Latino, because the land is less expensive and there is more open land available for development.

Increasing segregation

Daniel worked with Baker to bring the issue to the attention of the federal housing department. The Dallas lawyer and his partner, Laura Beshara, have sued Dallas multiple times for policies they argued increased racial segregation and limited housing options for low-income people. link

“[Low-Income Housing] Tax Credits are just about the only kind of housing in Texas that cannot turn someone away just because they’re on a housing choice voucher,” he said. “So when you steer [those] tax credits, you’re also steering to a large extent where voucher families can find housing.”

Daniel said the city has actually increased racial segregation in Dallas’ LIHTC program in recent years, despite the city’s approval of a housing policy explicitly setting a goal of undoing a long history of segregation.

In 2018, the city passed its first Comprehensive Housing Policy, which included ambitions benchmarks to meet the city’s affordable housing shortfall.

The three stated goals of that plan were to “create and maintain…affordable housing throughout Dallas,” to “promote greater fair housing choices” and to “overcome patterns of segregation and concentrations of poverty through incentives and requirements.”

Since 2018, the city has approved 31 LIHTC projects. Of those, only two are majority-white neighborhoods, Baker said. The other 29 – accounting for 6,100 individual rental units – are located in predominantly Black and Latino neighborhoods.

Now that the city is in the process of overhauling its housing policy to incorporate measurable commitments to racial equity, Darryl Baker is skeptical that a new policy will change city practices any more than the last policy did.

“We are resistant, we are reluctant, to trust the people who created this problem to be in charge of the solution,” Baker said.

Concentrating poverty

Baker’s complaint also says the city approves LIHTC projects in contradiction of state policy aimed at avoiding the concentration of low-income housing in the same neighborhoods or in areas of deep poverty.

He called the practice, "cruel," saying that many of the neighborhoods lack grocery stores, have lower-performing schools and are far from good jobs that can help people build stable finances for their families.

Research has found that living in neighborhoods with concentrated poverty – where poverty rates exceed 20% – corresponds with an increase in a variety of negative outcomes for the residents who live there, including higher crime and incarceration rates, dropping out of school, and experiencing poverty later in life.

Many of these projects are also in or near areas identified by the Dallas Police Department as crime hotspots, Daniel said.

Homeowners affected, too

Baker’s neighborhood – predominantly Black and middle-class homeowners – sits next to two census tracts that have such a concentration of LIHTC developments that they are ineligible for more LIHTC projects under state rules intended to limit the concentration of affordable housing.

However, the city’s Dallas Housing Finance Corporation has waived the state’s over-concentration rules to approve more LIHTC housing, according to documents he sent to HUD.

That concentration affects the home values in his neighborhood and artificially lowers property values in the southern sector and in neighborhoods of color, the complaint asserts, further privileging predominantly white homeowner neighborhoods.

Baker says his concerns are not NIMBYism, because his neighborhood – and others like it across the city – are already doing their share of hosting LIHTC developments.

“We need a balance. We’re terribly out of balance here, and we don’t seem to have any guarantees that City Hall understands that, based on outcomes,” Baker said. “We want affordability to be available throughout the city.”

Ultimately, Baker wants to see the city put more effort into creating opportunities for homeownership for low-income people. The city’s own Comprehensive Housing Policy sets the goal of making 55% of the affordable housing it helps produce homes that are owned by their occupants, with the other 45% of the affordable homes being rental units.

On that count, too, Baker says the city is falling short.

Got a tip? Christopher Connelly is KERA's One Crisis Away Reporter, exploring life on the financial edge. Email Christopher .You can follow Christopher on Twitter @hithisischris.

KERA News is made possible through the generosity of our members. If you find this reporting valuable, considermaking a tax-deductible gifttoday. Thank you.

Christopher Connelly is a reporter covering issues related to financial instability and poverty for KERA’s One Crisis Away series. In 2015, he joined KERA to report on Fort Worth and Tarrant County. From Fort Worth, he also focused on politics and criminal justice stories.