A faith-based nonprofit has launched an “affordable housing formula” to tackle soaring home prices in North Texas.
“Builders of Hope” is a Dallas-based nonprofit organization that seeks transformation throughout Dallas’ urban areas by providing: “affordable & workforce housing,” “financial & pre-homebuyer coaching,” “community engagement & advocacy,” and “strategic partnerships & initiatives.”
The nonprofit recently launched an initiative called “Revitalize West Dallas” (RWD). The goal of the planned initiative is to add more “affordable housing” units in the area to counter the surge in West Dallas’ new home prices.
The initiative was approved by Dallas City Council earlier this year and included over $1.9 million in taxpayer-funded federal money, primarily for down payment assistance.
The group plans to add affordable housing to 20 vacant West Dallas lots acquired from the City of Dallas.
To do this, Builders of Hope will collaborate with cooperative banks to acquire lots from the city for about $1,000 each. It will then use federal grants and money from the City of Dallas and Dallas County to subsidize the homes.
Dallas and Dallas County are experiencing a housing crisis, according to County Commissioner Elba Garcia.
“We all need to be committed to ensuring that West Dallas will always have a place for people who made it great in the first place,” Dallas Mayor Eric Johnson said.
Homes created through RWD will sell for approximately $200,000, according to the RWD. The formula provides buyers with up to $80,000 in immediate equity when they close on the property.
Local resident Keiara Armstrong will be the first individual to buy one of the newly completed homes through the RWD initiative.
“It’s overwhelming,” said Armstrong, referring to the skyrocketing home prices in West Dallas.
“It’s mind-blowing, you know. But thanks to Builders of Hope, I don’t have to worry about that,” she said. “To be able to have such a strong foundation to be able to raise my kids up, it’s incredible.”
West Dallas’ rapid transformation has shocked James Armstrong, a West Dallas pastor and Builders of Hope president and CEO.
“I felt the fear that the West Dallas I knew would be no more,” Armstrong said. “‘Building hope’ for us means breaking the cycles of poverty by building strong communities and creating generational wealth through homeownership.”
Builders of Hope currently operates in West and South Dallas with plans to expand elsewhere in Dallas County.
The excitement from supporters of the initiative, however, is counter-balanced by concerns about the cost and source of funding.
Developing subsidized housing is paradoxically more expensive than standard market-rate housing, according to the Brookings Institution.
Low-income housing tax credits lead to 20% higher construction costs per square foot than the typical medium-quality, market-based project, explained economist Michael Eriksen.
In addition, developers are not incentivized to develop low-income housing without equity derived from low-income tax credits subsidized by the U.S. taxpayer.
“Developers have an incentive to inflate their estimates, and then as projects proceed, there is little reason to revise costs downward,” explained Chris Edwards and Vanessa Brown Calder of the Cato Institute.
“After all, the higher the reported costs, the more tax credits are received,” the economists added.
