STRATEGIC PRIORITY: Growing
AGENDA DATE: June 25, 2025
COUNCIL DISTRICT(S): 2
DEPARTMENT: Department of Housing and Community Development
EXECUTIVE: Robin Bentley
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SUBJECT
Title
Authorize the (1) sale of one Land Bank Program lot to Housing Channel, and/or its affiliates (Developer) subject to restrictive covenants, a right of reverter, and execution of all necessary documents, pursuant to the City’s Land Bank Program; and (2) execution of a developmental agreement with Developer for the construction of one single family home on the Land Bank Program lot - Financing: No cost consideration to the City (see Fiscal Information)
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BACKGROUND
On January 28, 2004, the City Council established the Dallas Housing Acquisition and Development Corporation (DHADC) as its Land Bank for the purpose of acquiring, holding and transferring unimproved real property. The objective of the Land Bank Program is to: (1) reclaim vacant real property from tax delinquency status; and (2) use such property to develop affordable housing for low-income households or for commercial purposes. The resale of such property will enable the development of new single-family homeownership or rental units to serve low-income households or the development of commercial uses that stabilize distressed communities. This Program is implemented via a statutorily authorized tax foreclosure process for properties with five or more years of delinquent property taxes. In order to achieve the public purpose of creating affordable housing for low-income households, all residential properties sold by DHADC will be deed restricted to require the development and sale, rental, or lease-purchase to low-income households, meaning households with a gross income of not greater than 115.00% of the Area Median Income (AMI). Properties intended for commercial use that are acquired and resold by DHADC need only serve the public purpose of economic development.
The developer being considered for the sale of one lot is Housing Channel, and/or its affiliates (Developer). In March of 2024, a qualified participating developer, Developer, submitted an application (Proposal) to purchase one Land Bank Program lot. The Department of Housing and Community Development (Housing) staff evaluated the application pursuant to the standards set forth in the Land Bank Program guidelines, which included determining whether the Developer met the eligibility standards to be deemed a “Qualified Participating Developer” and underwriting the proposal. The application was determined to be “complete” and met the minimum score to be eligible. Housing collaborated with the Developer regarding the terms of sale of the vacant lot as well as the terms related to the construction and subsequent sale of single-family housing units to income eligible homebuyers.
The Developer is a non-profit corporation formed in Texas in 2014 and based in Fort Worth. Donna VanNess is the President of the Corporation. Housing Channel has 14 years of experience constructing and renovating homes. They have built more than ten homes in the last two years, thereby exceeding the developer criteria set forth in the Land Bank Program. This will be their first home built through the Land Bank program. The applicant has provided evidence of lines of credit to support this project.
This Proposal will be for the construction of one single family three-bedroom, two-bathroom unit with 1,500 square feet of living space and a minimum of a one car garage. The Proposal will target a homebuyer in the 61.00% - 80.00% AMI range and will have a maximum sales price not to exceed 75.00% of the U.S. Department of Housing and Urban Development (HUD) HOME homeownership sales price for the Dallas, Texas HUD Metro Fair Market Rents Area for the year in which the affordable housing unit is sold (currently $256,500.00).
The development terms applicable to each lot are as follows:
• Vacant Lot Sales Price: Attached as Exhibit A.
• Single-Family Home Sales Price: The sales price of the home cannot exceed the current HUD HOME homeownership sales price for the Dallas, TX HUD Metro Fair Market Rents Area and must be affordable based on the income of the targeted homebuyer.
• Targeted Income of Homebuyer: 61.00% - 80.00% percent AMI.
• Construction Timeframe: Developer must apply for a construction permit within 120 days and close on any construction financing within six months of purchase from the DHADC. In addition, Developer should complete construction and sale of each affordable housing unit to an income eligible homebuyer within one year of the date of acquisition of the vacant lot utilized for construction of the unit.
• Restrictive Covenants: Developer must (1) sell the lot to an income eligible household; and (2) prior to the sale, must provide to the Housing staff written documentation of the income of the proposed purchaser and the sales price. After sale of the home, the property must be occupied as an income eligible household’s principal residence during the entire term of the affordability period.
• Affordability Period: Once the property is sold to an income eligible household, it must be occupied as the household’s principal place of residence for at least five years. If the original purchaser re-sells the property during the affordability period, the property may only be sold to another income eligible household.
• Right of Reverter: Title to the property will revert to the DHADC if Developer does not apply for a construction permit and close on any construction financing within sixty days of purchase from the DHADC or does not complete the construction and sale of the affordable housing unit to an income eligible homebuyer within two years.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Housing and Homelessness Solutions Committee was briefed by memorandum regarding this matter on May 27, 2025. <https://dallascityhall.com/government/citymanager/Documents/Council%20Materials/Upcoming%20Agenda%20Item%20-%20HCD%20Land%20Banks.pdf>
FISCAL INFORMATION
Estimated Revenue: Dallas Housing Acquisition and Development Corporation Operating Fund Account $13,500.00
There will be no fiscal impact to the City of Dallas General Fund. DHADC will receive revenue from the sale of the lot, see attached Exhibit A, in the amount of $13,500.00, the sales price for the lot. Upon completion of the proposed housing unit the expected property tax generated is expected to be approximately $1,887.07 (based on a sale of $256,500.00 multiplied by a tax rate of .7357 per $100.00 valuation) annually. No revenue is foregone as non-tax privileged liens are no longer collectible after the date of the foreclosure judgment.
DEVELOPER/EXECUTIVE
Housing Channel
Donna VanNess, President
MAP
Attached