Tax Study Takes Fire at Single-Family Zoning

New neighborhood under construction
New neighborhood under construction | Image by TrongNguyen/Getty Images

Residents have been vocal about keeping Dallas neighborhoods zoned for single-family homes, but a recent study shows that changing zoning regulations could address the purported need for more tax sources.

Joe Minicozzi and his urban planning firm Urban3 used a novel approach to examine the revenue sources from taxable property, as D Magazine reported. Texas law does not allow property sales records to be public, so Minicozzi worked with MetroTex Association of Realtors — which provided data from its Multiple Listing Service — and the Texas A&M Real Estate Center to analyze non-public records to determine taxes based on population density.

The study found that the City of Dallas was leaving taxpayer money on the ground by not approving multi-family housing projects in historically single-family zones. Through the ForwardDallas process currently underway, Dallas elected officials are working to identify and craft a development plan that can bring in more tax dollars, as previously reported by The Dallas Express. Part of the process is analyzing the zoning regulations, which have not been updated since 1967. However, many residents believe efforts to eliminate single-family zoning will destroy the quality of life in certain Dallas neighborhoods.

“Driving density using a blunt-force approach of by-right development of duplex, triplex, fourplex, and accessory dwelling units in single-family neighborhoods rings favorably only to developers,” argued Dallas resident Greg Estell at a City workshop in January, CandysDirt.com reported. “It’s lazy policy.”

The taxable value of one acre of single-family zoning is $1 million. A duplex project on the same acre amounts to $1.9 million. Revenues go even higher when more density is added. An acre of apartments, for example, has a taxable value of $3.2 million, while an acre of townhomes provides $3.6 million in taxable value. Condos, which are high-value real estate projects, could turn that acre of land into $5.2 million of taxable value.

Amid a critical housing shortage, Yardi Systems identified in 2023 that Dallas has the most undeveloped land of any city in the United States. Approximately 91,000 acres of land in Dallas are undeveloped, allegedly providing opportunities for City planners to craft higher-density neighborhoods without sacrificing single-family regions. Much of the undeveloped acreage is in the southern part of the city, an area that is purportedly in need of low-cost housing.

“When we do land-use evaluation in the city, we look at fire access, we look at height setback encroachments, we look at traffic and how it’s going to impact neighborhoods, access to schools,” Council Member Chad West (District 1) said, per DBJ. “But we don’t really ever talk about what the financial impact is to the city except generally. I think that [Minicozzi’s study] opened my eyes to us needing to do a little more than that.”

D Magazine pointed out that Dallas anticipates revenue of $1.4 billion from property taxes in the current fiscal year, with 61% of that revenue going to public safety. City staff reported last year that Dallas will have $17 billion in unmet funding needs this year. Those costs relate to city projects such as replacing old buildings, repairing streets, and upgrading traffic lights, as well as funding pensions for City workers, firefighters, and police. The pension fund is reported to be roughly $4 billion in the red.

Balancing good City services, low taxes, and population density will be tricky for City staff as the ForwardDallas project advances.

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