Dallas mayor stands tough on tax credit projects

By Donna Kimura

Nov. 15, 2005, Dallas – A moratorium on low-income housing tax credit (LIHTC) projects in the city should remain in place until a Federal Bureau of Investigation (FBI) probe is completed, Mayor Laura Miller told Affordable Housing Finance magazine in November.

Miller said she doesn’t know when the investigation will be finished, but noted that the FBI raided city hall offices for documents in June. Local news reports said that the offices of Mayor Pro Tem Don Hill and others were searched. The probe reportedly revolves around possible corruption at City Hall and some tax credit projects.

Affordable housing developers in Dallas are frustrated and dismayed by the moratorium, saying the move lacks sensitivity. “One has to wonder what is the Dallas City Council thinking when they stop all affordable housing tax credit business till their woes with an FBI investigation is completed …” said a major advocate. There’s concern that some council members prefer tearing down apartments in need of repair and replacing them with pricey single-family homes, according to the advocate.

In July, Miller wrote to the Texas Department of Housing and Community Affairs, saying that the city would not endorse any new applications for tax credit projects until the FBI’s work is done. However, she noted the LIHTC program’s value and said it has helped the city improve distressed neighborhoods and reduce an affordable housing shortfall.

Miller doesn’t see the moratorium straining the affordable housing supply in the city. “We are inundated with apartments,” she said recently, noting that about half of Dallas’ residents live in apartments. 

Even with some 35,000 Hurricane Katrina evacuees in Dallas, there are vacancies, according to Miller.

Although future affordable deals are on hold, construction is proceeding on tax credit projects that “we embraced a year ago,” she said.

At the end of August 2005, the overall occupancy rate was about 88.8% in the Dallas/Fort Worth area. Post-Hurricane Katrina, it was 92%, the highest it has been in four years, according to ALN Systems, Inc., in Texas.

Affordable housing supporters say that the need for affordable housing remains.

If the moratorium isn’t enough, Miller wants to put even tougher measures in place. Developments sometimes require zoning changes and other approvals. She supports the idea of City Council members working in teams to make key zoning and planning decisions. As it works now, the council often defers to the council member who represents the project area.

The new concept, however, is being met with resistance, according to Miller. Some council members want to maintain their autonomy, but Miller’s response is short and pointed: “We have the FBI in the building.