Despite the perception of a shortage, Dallas actually has an abundance of affordable housing. Thanks to its recent success in securing $1.4 billion from the Federal Home Loan Mortgage Corp. (or Freddie Mac), Dallas has affordable housing loans waiting to be used. In addition, the Federal National Mortgage Association (or Fannie Mac), with its regional office here, has initiated affordable housing loan programs in concert with local lenders. Those new loan initiatives, along with many property owners who already are willing to provide financing, make buying a home easier than it ever has been.
Yet Dallas remains a city of tenants. Almost 60 percent of the residents are renters, and the perception lingers that this prosperous city lacks affordable housing. What Dallas lacks isn't affordable housing but, rather, a marketplace for such transactions. With increased fees and regulatory costs for each transaction, the real estate community is priced out of serving the affordable housing market. Likewise, lawyers long ago priced themselves out of handling transactions for inexpensive homes. And absentee owners, not having real estate agents interested in listing their inexpensive property, find it very difficult to sell.
As a result, those houses eventually are demolished, and the city's plague of vacant lots grows. A marketplace to bring together buyers and sellers of affordable housing could be created easily and inexpensively for all of Dallas' benefit.
Here is how it could be done:
- First, the city would compile an inventory of all the homes on the tax rolls under $35,000. Then, it would send a letter to all of those property owners, asking if they would be willing to sell their property for the value shown by the tax appraisal district and if they would carry the note.
- Next, a kiosk at City Hall would be set up to handle the responses, which would be sorted according to location and price. Churches, nonprofit organizations and public-housing residents also would receive the inventory of inexpensive homes.
- A list of Realtors and lawyers volunteering their services to fill out the contracts and coordinate the transactions then would be made available to potential homeowners. Instead of several hundred houses being torn down each year, there would be hundreds of new homeowners each year.
At present, a family may pay $300 a month in rent to live in subsidized housing. But if it could buy a house for as little as $5,000 or $10,000, its mortgage payment would be only $50 to $100 a month. A $20,000 house would require only $200 in payments. Some of these homes are actually in better condition than the apartments in which the families now reside. Other homes need work, just as the homes that were reclaimed by urban pioneers 20 years ago.
If those young, college-educated urban pioneers with no construction background were allowed to fix below-code houses with broken windows and leaking roofs while they lived in them, why shouldn't lower-income neighborhood pioneers with construction skills be permitted to rehabilitate homes while they live in them?
This effort to bolster affordable housing could draw on the resources of many organizations:
- Paint the Town, Habitat for Humanity, Shared Housing, Trinity Ministry for the Poor, many churches and other interested groups could receive a list of new homeowners and their needs: tools, materials, a helping hand or maybe just some encouragement.
- The city could waive building permits and utility hookup fees and sell the 2,000 city-owned vacant lots for $100 apiece to developers who are willing to build houses priced for sale under $45,000.
- The Texas Legislature could waive the licensing fee of any real estate agent who sells five houses a year under $35,000.
The Greater Dallas Association of Realtors could waive fees and Multiple Listing Service dues for members who sell affordable houses as part of this effort.
An innovative and cooperative approach to finding homes for families would make available the thousands of homes languishing on the tax rolls between $5,000 and $25,000 that are destined for demolition. With the resources, energy and expertise for which Dallas is known, there is no reason not to make Dallas a city of homeowners. Let's start thinking about taking a family out of the projects and helping it move into an affordable home of its own.