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Memorandum

DATE September 18, 2018 CITY OF DALLAS


TO
T.C. Broadnax, City Manager
SUBJECT Comprehensive Housing Policy

Your memorandum dated September 7, 2018 with the subject “Additional Information Regarding
Accelerating Issuance of RFAs for 4% Rehabilitation Projects” worries me. Prior to the City of
Dallas passing a Comprehensive Housing Policy, City Staff and the Dallas City Council
considered each housing proposal in a well-meaning, ad hoc manner.

The old process would too often begin with a particular affordable housing applicant bringing an
unfair situation to the City’s attention and asking for an exception for not only their project but the
housing industry as a whole.

City Staff would then present a case for granting the exception and approving the housing project.
The City Council after much deliberation would approve. In hindsight, the only rule was always
finding an exception. Repeated housing decisions made in this manner discriminated against the
people of our City and led to the HUD Voluntary Compliance Agreement.

Although the City of Dallas Comprehensive Housing Policy is not perfect, it is very good. It
represents a strategic course of principled action for us to affirmatively further fair housing in our
City and begin to undue decades of decisions having a disparate impact.

Your proposed amendment to the Comprehensive Housing Policy to permit the accelerated
issuance of RFAs for 4% Rehabilitation Projects feels like the old way of doing things. And why
a joint venture of Steele Properties of Colorado and the Dallas Housing Authority (DHA) to
purchase the infamous Ridgecrest Terrace Apartments warrants an exception, I do not know.

Steele Properties, a national affordable housing developer, contacted the City of Dallas in January
2018 to express an interest in acquiring Ridgecrest Terrace Apartments. DHA would joint venture
with Steele Properties to provide a Public Facility Corporation and other support. Steele
Properties and DHA want to use low income housing tax credits to renovate the Ridgecrest
Terrace Apartments for one-hundred percent low income residents to live in Market Value
Analysis (MVA) Area G – an area of low opportunity and high poverty.

The Ridgecrest Terrace Apartments are a 1960’s-era apartment complex in west Oak Cliff with a
history of crime, code issues, City-initiated lawsuits, and federal subsidies. The last City-initiated
lawsuit was around 2010 against Eureka Holdings, the then owner that benefitted from $1.5
million in federal stimulus money for renovations. In addition to the $1.5 million in federal stimulus
money, HUD paid millions in rent subsidies to Ridgecrest Terrace Apartment’s owners despite
code issues and dangerous living conditions.

For the last few years, DHA has been administering a housing voucher program called a Housing
Assistance Payments (HAP) contract at the Ridgecrest Terrace Apartments. As part of the
contract, DHA has the right to inspect Ridgecrest Terrace Apartments to ensure the Ridgecrest

“Our Product is Service”


Equity | Empathy | Ethics | Excellence
DATE September 18, 2018
SUBJECT Comprehensive Housing Policy

Terrace Apartments comply with federal Housing Quality Standards (HQS), which are similar to
our multi-family rental ordinances.

Following Steele Properties and DHA’s interest in the property, from January 2018 through August
2018, the City increased code enforcement efforts against the current owner, Ridgecrest
Holdings. These efforts culminated in a lawsuit against Ridgecrest Holdings by the City of Dallas
on August 28, 2018.

While the increased code enforcement was occurring, Steele Properties made City Management
aware of an “unfair timing gap” in our Comprehensive Housing Policy and even proposed a
resolution amending our Comprehensive Housing Policy to address this gap to the benefit of
Steele Properties and the “housing industry.” Without a mention of Ridgecrest Terrace, Steele
Properties, litigation, or DHA, City Management presented the Steele Properties-sponsored
resolution to the City of Dallas Economic Development and Housing Committee (“Committee”) on
September 4, 2018. Even though the Committee voted to bring the resolution back to the
Committee by September 17, 2018 for further discussion, City Management ignored the vote and
initiated the process requested by Steele Properties. The item will come back to the Committee
on October 22, 2018 for final approval along with a potential item supporting the tax credits
requested by the Steele Properties/DHA joint venture.

Why are we, the City of Dallas, filing a lawsuit against the current owner of the Ridgecrest Terrace
Apartments for code and nuisance issues that DHA should have been monitoring as part of
administering its voucher program while simultaneously changing the Comprehensive Housing
Policy to favor a potential buyer; namely, a joint venture between Steele Properties and DHA to
house low income residents in an area of low opportunity and high poverty?

The answer is the old way of doing things. And that worries me.

Scott Griggs
Councilmember

c: Honorable Mayor and Members of the City Council

“Our Product is Service”


Empathy | Ethics | Excellence | Equity

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