City of Dallas to Buy Luxury Complex for Affordable Housing

A luxury North Dallas apartment complex may soon have a big rent decrease, something unheard of in today’s housing market.

It’s happening at The Briscoe, a 322-unit complex at 12639 Coit Road near the LBJ Freeway and the Central Expressway because the Dallas City Council Wednesday approved the purchase of the complex by a city entity for affordable workforce housing.

Helping to provide affordable housing is a Dallas City Council priority as rents soar and workers struggle to afford to live in the city.

But City Council Member Cara Mendelsohn called the deal irresponsible because it will also reduce property tax revenue the city relies on to provide services.

Prospective tenant Lex Seay visited The Briscoe Wednesday with her realtor, Adeleke Ademuyewo from the firm Daily Posh Homes.

They liked what they saw.

“It's a very nice place and a very good area of town. You're about ten minutes away from the Galleria and you're about 15, 20 minutes away from Dallas Love Field,” Ademuyewo said.

The complex website shows photos of the modern décor, upscale amenities and the swimming pool.

Seay is a flight attendant planning to relocate to Dallas from New York. She said Dallas is far more affordable than New York City, but she’s seen Dallas prices spike in the 6 months she’s been considering a Dallas apartment and she saw another increase Wednesday.

“I like this neighborhood. It’s nice. It is a little expensive. What they advertised online was different than what I saw today,” she said.

Across the street from the complex is a Costco Store. Down the street, there’s a fire station. Medical City Hospital is nearby. City officials have heard from nurses, firefighters and store employees who struggle to pay the increased rent that market rate complexes charge in Dallas.

"I don’t have a lot of developers coming to me out of the goodness of their heart taking less money," Kyle Hines, Assistant Dallas Director of Housing and Neighborhood Revitalization, said. "I think it’s one of the most important things we can do for our residents, provide affordable units."

Most rent at The Briscoe should drop sharply after Wednesday’s action by the Dallas City Council. At least half the units will have reduced rent for people with limited income.

“This is a very, very exciting first step in our affordable housing and workforce housing efforts for the city because this is the acquisition of an existing property rather than building from scratch,” City Council Member Jaynie Schultz said.

In the first 15 years of the deal, the City of Dallas will lose at least $9 million in property tax revenue that it would have received if the complex remained in private ownership.

Council member Mendelsohn said the deal could be extended through 75 years.  

“I don’t know how you think we’re going to make our budget. I don’t know how you think we’re going to pay for police, all the different services that we want to do. But we are taking income-producing items off our tax rolls,” she said. “Those of us who have children that are sitting here, your children will probably not even be alive while this deal is still going on.”

Mendelsohn was the only city council member to vote against the deal.

Other members said it will be reviewed after 15 years and the complex could be sold back to a private owner in the future. Hines said the tax loss is offset by at least $21 million worth of rent reduction tenants will receive during those first 15 years.

“We’re putting that back into the pockets of our residents who can use it for other items, saving for the down payment on a home, paying off student loans,” Hines said. “You’ve got to look at both sides of the equation.

Hines also said DHFC ownership of the complex would require acceptance of housing vouchers that are issued to low-income tenants for the payment of rent.  A recent study showed most private landlords in Dallas refuse to accept vouchers.

Officials also expect the city’s equity in the complex to increase.

“We’ll have an increased value or increased amount of money we can do something within the amount of $51 million in 15 years,” Councilman Chad West said.

Council Member Carolyn King Arnold said the city grants tax breaks all the time to attract and keep private businesses in Dallas.

“I can support this item because we are investing in people,” Arnold said.

Potential tenant Lex Seay said she supports the plan, too.

“If anybody deserves affordable housing it’s our first responders and our frontline workers, so I agree with that,” she said. “I also think it’s important to have people like that in our community, nurses, first responders, so I’m all for it.”

They may all soon be able to afford The Briscoe. The City of Dallas has also been pursuing other deals to construct new complexes to add affordable housing.