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Dallas City Council OKs 4 Public Facility Corporation Developments

Four housing developments were approved this week under the Public Facility Corporation financing structure, lauded by Dallas City Council members as a mechanism for providing affordable homes for the city’s workforce. 

“Is there any other way we’re getting affordable housing? Are developers building it for free?” District 1 Councilman Chad West asked. 

Assistant Director of Housing and Neighborhood Revitalization Kyle Hines answered the question with a simple, “No.” 

One council member has steadfastly voted against the city’s PFC projects, which now total an even dozen. District 12 Councilwoman Cara Mendelsohn said she can’t support taking a development off the tax rolls for 75 years. 

“This is not an equity issue,” she said. “This is about fiscal responsibility and how we fund affordable housing. We have to ensure our city is strong for the long term. If we continue to give tax abatements and continue to take items off our tax roll, we can’t provide the services that the residents need. I think we all know where we stand. I’m not going to vote for them. I reject the notion that it’s about equity when it’s actually about funding the city. We haven’t even returned our libraries to pre-COVID because we don’t have the general fund dollars to do it.” 

How Does a Public Facility Corporation Work?

While PFC projects do offer a 75-year tax abatement for the developer, the city receives a one-time payment upfront, along with annual lease payments. The projects also offer much-needed housing that wouldn’t otherwise be built, advocates say. 

“Staff has shown me the data and financial analysis,” West told CandysDirt.com after Wednesday’s council meeting. “It would cost the taxpayers infinitely more if we were to subsidize affordable housing through bond funds or general funds.” 

PFC projects are not to be confused with Housing Finance Corporation (HFC) projects like The Briscoe, where the city owns the land and the building and uses rent payments to buy down bonds used by the HFC to buy the building. 

Both PFC and HFC projects offer a portion of units at market rate, with the others available to renters at 80 percent of the area median income. 

The Projects

At Wednesday’s Dallas City Council meeting, the PFC was authorized to acquire, develop, and own the following housing developments: 

  • 1508 Mockingbird Lane, a mixed-income, multifamily development at 1508 West Mockingbird Lane. Estimated revenue foregone: $835,055. 
  • The Legacy at White Rock, a mixed-income, multifamily development at 2825 North Buckner Blvd. Estimated revenue foregone: $42,331. 
  • The Reserve at Lancaster, a mixed-income townhome development at 5703 South Lancaster Road. Estimated revenue foregone: $19,259. 
  • Jefferson University Hills, a mixed-income, multifamily development at the northwest corner of University Hills Boulevard and East Camp Wisdom Road. Estimated revenue foregone is $72,768. 

The “estimated revenue foregone” is a calculation based on 15 years of estimated taxes. Councilmember Mendelsohn cast the lone vote against each of the four projects. Lease agreements are reviewed at the 15-year mark, which is why the calculations are based on that figure rather than the 75-year period. 

Public Facility Corporation Projects

In response to a question from District 9 Councilwoman Paula Blackmon, Hines explained the reason why the property is taken off the tax rolls for 75 years. The city can, at any time, remove income restrictions and put it back on the tax rolls, or refinance and recapitalize the project, but at the outset, they need to provide the developer with long-term ownership, he said.

“We have looked to shorten the lease term, but we need to have at least 75 years for debt and equity providers to receive what is an effective transfer of title to the property,” Hines said. “Seventy-five years allows the investor and developer to have effective control of the land.” 

Equity, Affordability, And The North-South Gap

In what appeared to be a response to Mendelsohn’s comment about the matter not being about equity, Mayor Pro Tem Carolyn King Arnold asked for a record vote to identify those who were supporting the PFC projects. 

“This is an item that comes up in the southern sector where we are pushing for affordable housing, infrastructure, and economic development,” she said. “I want to make sure our public understands who is supportive of us as we talk about equity in this city.” 

District 6 Councilman Omar Narvaez also emphasized equity. 

“At the end of the day it comes down to dollars,” he said. “There are some with a lot of privilege that only care about dollars and profits. There are some who disagree with that notion and we don’t put profits before people.”

The Reserve at Lancaster will have 260 townhome units, Narvaez added. 

“They will be spending money and working in the area,” he said of the future tenants. “It is a job center with UNT Dallas, the inland port, and a lot of big-business companies. We always hear that the biggest issue with South Dallas is that we don’t have places to live. I look at this as an incentive to get some people to move to far south Dallas. When you have mixed-income [housing], that area starts to thrive.” 


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