Dallas Morning New
Thursday’s Supreme Court ruling in favor of the Dallas-based Inclusive Communities Project means Texas must change subsidized-housing formulas that have contributed mightily to creating problems such as this city’s north-south gap. No longer can federally subsidized low-income housing projects be placed in poor communities simply because that’s where it’s cheapest to build.
This case has been working its way through the court system since 2008, ever since Inclusive Communities challenged the way the Texas Department of Housing and Community Affairs awards tax credits to affordable housing developers. Inclusive Communities argued that the process was discriminatory because it gave too much weight to cheap locations where minorities are already heavily concentrated.
Nowhere are the effects of such decisions more evident than in Dallas, where tax-credit housing projects have, for decades, been concentrated south of Interstate 30 and the Trinity River. Cheap land in this part of the city helped developers stay within their budgets and maximize profits.
As Inclusive Communities has demonstrated in court, the cheapest land tends to be in areas where crime is high or where property has been environmentally tainted by lead smelters or other industrial polluters. The state’s tax-credit system effectively forced poor people to live in neighborhoods with the weakest schools and criminal or environmental dangers.
Since minority families were the ones most severely affected, the process was clearly discriminatory.
This practice has contributed to skewed development between northern and southern Dallas, helping dampen land values and ensure that minorities and poor people remain concentrated in the south. As land values kept escalating in northern Dallas and the suburbs, developers found fewer and fewer options to disperse their affordable housing projects to locations outside of existing poor, minority-dominated areas.
At issue before the Supreme Court was whether Inclusive Communities had to prove a clear discriminatory intent or merely demonstrate the “disparate impact” of the state housing department’s tax-credit awards.
The court ruled appropriately that a discriminatory impact, intentional or not, was sufficient.
What happens next? That’s where things get complicated. Southern Dallas has an existing stock of affordable housing that is aging rapidly and needs to be replaced or upgraded. And many leaders in the southern half of the city remain firm supporters of tax-credit housing as an urban-renewal solution.
Thursday’s ruling means the state must find better ways to disperse its tax-credit developments into more affluent areas, even if existing residents are adamantly opposed to it, while also ensuring that urban renewal in southern Dallas isn’t impeded because of lack of funding.
For poor people, this means a much-needed expansion of geographic choices for housing. For developers, however, it means slimmer profit margins and probably reduced incentives to get into the low-income housing market.
Let’s hope this doesn’t become a pyrrhic victory for the poor.