'Not On Our Backs': Risk Of Displacement Grows As DFW Property Values Soar

Cordelia Jones had lived in the historic Elm Thicket/Northpark area of Dallas for decades when rising property taxes forced her to sell.

Bigger, more expensive properties were springing up around her working-class neighborhood, and despite Jones and her late husband juggling multiple jobs to pay for their home, the impact on property values meant she could no longer afford to stay.

“The house sold, she moved out,” Jones’ neighbor Amelia Perez said. “Three months later, she passed away. I have no doubt it’s because she left the one place she had been living her entire life, where she raised her family, the whole bit.”

Stories of displacement are becoming more common as property values soar across the Metroplex, especially in some of its poorest ZIP codes.

That's prompted local governments to come up with ways to encourage both the preservation and development of affordable housing in vulnerable areas. But localities need buy-in from the private sector. And while incentives exist to help get it done, the potential to make a killing by building market-rate housing has put those efforts behind the eight ball. 

“We lost Little Mexico, we lost State Thomas, and we’re losing parts of West Dallas and 10th Street,” Stephanie Champion, chief community development and policy officer for community development corporation Builders of Hope, said of a phenomenon advocates say is intensifying the Metroplex’s affordability crisis and stands to wipe out DFW’s cultural identity.

“This is our history — it’s a history of people and a history of the built environment, as well.”

Across DFW, the median price of a single-family home grew by 236% to $285K between 2011 and 2023, per the Texas A&M Real Estate Research Center — and homes at the lowest price tiers saw the biggest jumps in appreciation.

Disinvested Areas 'Start To Turn'

Five ZIP codes in the southern and western sectors of Dallas — 75203, 75210, 75212, 75215 and 75216 — saw property values grow by an average 210% between 2016 and 2023, according to new data from Texas Real Estate Source. 

The 76104 and 76105 ZIP codes of Fort Worth, encompassing historic neighborhoods such as Stop Six, El Poly Pyramid, Hillside Morningside and Fairmount-Southside, also saw increases of 197% and 204%, respectively.

The spikes across the seven DFW ZIP codes were among the 10 largest in the state, per Texas Real Estate Source. Meanwhile, the apartment industry followed a similar trajectory, with an analysis of submarkets showing rents increasing by 57% to 103% depending on the ZIP code over a similar period, per research by MRI ApartmentData.

As a result, the threat of displacement is growing, especially among the Metroplex’s poorest households. When property values increase, the cost of living goes up and the supply of affordable housing wanes, forcing families at the lowest income levels out of the neighborhood. 

“There’s a lot of neighborhoods in Dallas that never had a lot of investment — they were at the bottom tier of the neighborhood cycle, and they just stayed there,” said Brent Bowen, president of Texas Valuation Professionals. “Now you’ve seen a lot of those areas start to turn.”

One major reason: Rents at affordable housing properties are capped, meaning developers don't benefit from the success of DFW's multifamily industry. Asking rates for market-rate units surged an unprecedented 19% between the springs of 2021 and 2022.

“Ultimately those investment decisions get made based on profit in a lot of instances,” said George Saad, director of acquisitions at BLVD Group, a company that builds affordable and middle-income housing, adding that for that reality to shift, developers need incentives allowing "profits and returns that rival the market-rate luxury space.”

The jumps in value were mostly driven by a rapid rise in investment followed by a surge of development, Champion said. Once plagued by prolonged disinvestment, these areas are now viewed as prime real estate due to relatively low costs and proximity to the urban core.

“You’re seeing developers who are really trying to capitalize on the largest return on investment,” Champion said. “If it’s vacant, they can purchase it, build on it, and flip it really quickly to turn a big profit.”

Investment in low-income and emergent communities, which are often hotbeds for homelessness and crime, is not necessarily a bad thing, which makes the issue of gentrification highly nuanced, said Nick Walsh, vice president of development for The NRP Group, a multifamily developer with more than half of its portfolio concentrated in affordable and mixed-income properties.

“I don’t think the answer is let’s not invest, let’s not develop, or let’s stop building housing, because that will just perpetuate the issues that are in place,” he said. “The issue becomes, how do we actually either maintain a level of affordability or keep folks in place when we want to improve these neighborhoods?”

In at least one part of the area, Dallas’ city center, that didn't happen, with the racial composition changing dramatically since 2000. While the overall share of non-Hispanic white residents declined citywide as the population grew more diverse, their proportion increased in the urban core, per a 2019 analysis by the Dallas Federal Reserve.

A robust inflow of high-income residents put pressure on the housing market, with construction levels growing by 50% within 3 miles of downtown and average home values increasing by close to 80% in the same radius.

Higher costs likely caused legacy homeowners to be forced out, the Dallas Fed found, with four vulnerable groups seeing their population decrease in the city center as their numbers grew in the outskirts.

Can The Tide Be Stemmed?

The harmful impacts of gentrification have been acutely felt in Elm Thicket/Northpark, a neighborhood that in the 1920s was a Freedmen’s Town made up of farmland and dirt roads. Today, the surrounding area bears all the trappings of economic success, with a thriving shopping center to its east and Love Field Airport to its west. 

With that development came a noticeable shift in demographics. More than 20 years ago, Black residents made up 60% of the neighborhood, but by 2014, that share had been cut in half. White residents accounted for nearly 20% of the neighborhood, up from 11% in 2000. The balance was mostly made up of Hispanic neighbors, per the Advocate.

Last year, Cordelia Jones' former neighbor Perez and other residents won a years-long zoning battle that bans new homes from occupying more than 40% of their lots and exceeding 25 feet in height. It also requires roofs have sloping edges rather than flat tops.

The changes were intended to preserve the character of the neighborhood, but Perez said the hope is they also prevent home values from skyrocketing further out of control. 

“We’re always told ‘it’s for progress,’” Perez said of the infiltration of bigger, pricier homes and apartment complexes. “Not on our backs, not anymore. We lost half our neighborhood that way.”

Similar demographic shifts and property value increases are ongoing in Southeast Fort Worth, an area home to several historically Black neighborhoods. The proliferation of purchases by investors who pay large cash sums for homes they turn into long-term rentals is a big factor behind the jump in costs.

The trend has not only bid up the price of homes but also removed for-purchase options from supply, making it harder for first-time homeowners to enter the neighborhood, said Stacy Marshall, president of Southeast Fort Worth Inc.

“In 76105, which is basically around Texas Wesleyan University, you probably have three to four landowners that own the majority of housing over there, and they rent those out,” he said. “They saw the value, so they just started buying up property.”

Corporate ownership of homes is causing displacement in Southeast Fort Worth, but there is very little the city can do to prevent investor purchases from happening, said Amy Connolly, assistant director of neighborhood services for the city of Fort Worth. 

“Texas is a big property rights state,” she said. “You can’t really interfere very much in that particular transaction.”

The city is exploring how best to keep homeowners in place, especially in areas like 76104 and 76105, where a rapid decrease in households living below area median income is happening at the same time as a rapid increase in adults with a bachelor’s degree. 

Those same ZIP codes are seeing assessed values rise faster than the median income, according to a May analysis presented to the Fort Worth City Council.

“We’ve got a number of affordable housing developments in both of those ZIP codes that are moving forward,” Connolly said. “Is it enough? No. But it’s certainly an area where we are working to build as much affordable housing as we can.”

A Plan For Residents — And 'Joe Schmo Developer'

Fort Worth recently increased its senior property exemption from $40K to $60K, which should help aging residents remain in their homes. Other options include land banking or the creation of a homestead preservation center, which would ensure legacy homeowners have access to homestead exemption benefits and don’t fall behind on their property taxes.

Over in Dallas, Builders of Hope is spearheading the development of the city’s anti-displacement toolkit. The first part of the effort involved mapping the city to understand where at-risk homeowners are concentrated. Part 2 will assemble a lineup of proposed programs aimed at preventing displacement.

“We have a large vision, which is to create meaningful policy change in the city of Dallas that will allow vulnerable residents in rapidly gentrifying neighborhoods the right to stay and the opportunity to return in the face of rising housing costs,” Champion said. “We’re hoping to understand the problem and then propose specific solutions to it.”

The process will work to strengthen existing programs and create new ones, but in some cases homeowners will have no option but to sell. This is why the preservation of existing affordable units as well as incentivizing new development — especially in areas of high need — is critical.

A rental housing needs assessment published by Child Poverty Action Lab in May found that the city of Dallas has a 33,660 rental-unit supply gap for its lowest-income households making at or below 50% of the area's median income, which is $44,500 for a family of four. The report also found that there is no supply gap for households making above 50% AMI.

Without intervention, CPAL said the gap is projected to grow to 83,500 rental units by 2030.

“Most of the city’s programs are targeted at folks earning 80% of AMI or below,” Champion said. “We’re essentially helping a population that doesn’t actually need the help — they’re not the highest need.”

To make matters worse, about 1 in 5 tax credit-built apartments in the Dallas area could see its affordability protections expire by 2027, according to Moody’s data reported by The Wall Street Journal. A large number of those properties are expected to be converted to market-rate, especially as rental rate growth has soared in areas like DFW.

“The city needs to look at how to retain these units … It’s going to take money, and it’s going to take policy to figure that out,” Walsh said. “If I’m Joe Schmo developer, and I realize my property is worth a ton of money because the area around me has grown up into an attractive place to live and work, I’m going to want to take advantage of that.”

The city of Dallas has a public facility corporation that exempts property taxes for developments that set aside 50% of their units for families making 80% AMI or below. It also offers a mixed-income housing development bonus that trades things like more density for the allocation of affordable units.

These types of incentives are good, Saad said, but the city should continue to come up with new ways to encourage more affordable and missing-middle housing development, especially as demand continues to grow.

“We have such a demand and a need for affordable housing within communities across the country, that having the flexibility to provide innovative solutions is by far the most important concept that should be in mind of these affordable housing policymakers,” he said. “We need to use all of the tools in the toolbox in order to support affordable housing given where the market climate has developed in the last decade.”

The anti-displacement toolkit should be ready for a council vote by early next year, Champion said. The city likely won’t have the funding to support every recommendation, which is why the Dallas Housing Coalition is also pushing for a $200M allocation toward affordable housing and displacement mitigation tools in the November bond package.

“If we just let the private market do its thing, and we don't intervene at all, we end up losing these really treasured cultural enclaves,” Champion said. “If we don't take steps to preserve these people and these places, we will end up losing a really important part of ourselves.”