| UNFAIR PARK | FUELING How Dallas’ soaring rental costs are leading to more homelessness BY JACOB VAUGHN H ector Hernandez stood outside his small Oak Cliff apartment in early July on one of his last days at the Oakridge Apartments, a place the 48-year-old had called home for about a year. It wasn’t the best place to live, but he could afford it on his fixed income. Then the complex came under new man- agement. Most of the complex’s units had boarded- up windows, ready for renovations and a rent increase. Hernandez and others couldn’t afford the higher rents and likely wouldn’t have met the new management company’s requirements. Hernandez is blind and scrapes by on So- cial Security Disability Insurance (SSDI) payments. Most of that money would go to- ward his rent. The rest was just enough for groceries and a few incidentals. His mom would visit him every month to drop off his rent check. One day she showed up and found a note posted to his door that said the apartment was coming under new manage- ment. Rents would go up, the note said, but Hernandez was free to reapply if he wanted to stay. “I need to find somewhere to go. I can’t afford that,” Hernandez said. A group called Fighting Homelessness was helping Hernandez and the others get better conditions at the apartment complex, pushing for repairs to gas leaks and action on stopping a rat infestation. But since the notice about new manage- ment arrived, the group has been trying to find new homes for the residents priced out of the Oakridge Apartments. They haven’t had any luck yet. Barring any rental assistance, which they’re working to get, there’s nothing in the tenants’ price range. Hernandez, for example, is used to spending between $600 and $700 on rent, most of his income. Finding something in that price range in a market as hot as Dallas is not easy. Some might say it’s impossible. “That’s the reality out there,” Lisa Mar- shall, the homelessness advocate who started the Fighting Homelessness group, said. “People that are on fixed incomes, whether it’s [Social Security Disability In- surance] because of their disability or they’re elderly, or they’re on [Supplemental Security Income], there are no places out there to get and rent that are $650. Anything below that, you probably are renting from a halfway house or a drug rehab place or you’re just sharing a room with somebody in a boarding home. And they are few and far between. So, that’s the population that no- body thought about when all this rent was going up.” According to apartmentlist.com’s Octo- ber 2022 national rent report, rents nation- wide are up by nearly 7% over last year’s. In Dallas, rents have increased by a little over 12%. The average two-bedroom apartment in Dallas now costs about $1,500 a month. Housing production in Dallas picked up between 2020 and 2021. At the beginning of 2020, builders had started on some 12,000 houses, according to the housing research firm Zonda. When 2021 rolled around, builders had started on more than 54,000. Despite this uptick, a report released this year by the national housing advocacy group Up For Growth found that another 3.8 mil- lion homes must be built in the U.S. to fill the country’s housing needs. That translates to about 322,000 homes across Texas and 85,220 across DFW. Even as the housing market cools down – tracking with the first small month-to- month decrease in rent prices this year – it’s hard to see an end in sight to sky-high rents and mortgage rates. People attribute the rising costs to fac- tors like inflation, issues in the supply chain, short-term rentals and institutional investors. All of these things can contribute to the underlying issue — a massive hous- ing shortage. The production of new homes over the last 10 years simply hasn’t kept up with de- mand in the U.S. Changes in the industry in this period, such as the start of short-term rental companies like Airbnb and institu- tional investors’ expansion into the housing market, have also taken properties off the market for would-be homeowners. the rentals are being used as party and event spaces, creating a nuisance. City officials and staff are still meeting to S discuss how to deal with the short-term rental market in Dallas. Some have proposed using the city’s zoning laws to restrict rental locations, while others think they should be allowed in their current locations under tougher regulations. There are about 1,200 short-term rentals registered in the city, but active listings sug- gest that there are many more in Dallas. As of Sept. 28, Dallas actually had 5,677 active properties, according to the website airdna. co, which provides information on short- term rentals. Most of those are listed on Airbnb. Short-term rentals have the potential to benefit cities and neighborhoods. They could lead to an increase in tourism and stimulate the local economy. Property own- ers can benefit by turning their homes into another source of income. Tourists can en- joy lower travel costs by using short-term rentals. But after a while, the negative effects of short-term rentals can start to outweigh the benefits. A report by the Economic Policy Institute from 2019 looked into the economic costs and benefits of the short-term rental com- pany Airbnb. “While the introduction and expansion of Airbnb into U.S. cities and cities around the world carries large potential economic benefits and costs, the costs to renters and local jurisdictions likely exceed the benefits to travelers and property owners,” the re- port said. hort-term rentals have stirred up a con- troversy in Dallas, as in other cities, espe- cially from residents complaining that HOMELESSNESS Jacob Vaughn Hector Hernandez relies on Social Security Disability Insurance. He may not be able to afford the recent rent hikes at his complex. “There is evidence that Airbnb increases the supply of short-term travel accommoda- tions and slightly lowers prices,” the report said. “But there is little evidence that the high price of travel accommodations is a pressing economic problem in the United States: The price of travel accommodations in the U.S. has not risen particularly fast in recent years, nor are travel costs a significant share of American family budgets.” Housing costs are a significant share of American family budgets, and they have seen huge increases in recent years for both renters and homeowners. There’s some evi- dence to suggest that short-term rentals are contributing to the problem. The report says that one of the largest and best-documented potential costs of Airbnb’s expansion over the years is the re- duction it causes in the housing supply. Because the cost of housing doesn’t affect people’s need for it, the report says, “even small changes in housing supply (like those caused by converting long-term rental prop- erties to Airbnb units) can cause significant price increases.” The report says studies have indicated that Airbnb’s introduction and expansion into New York City, for example, may have raised average rents by nearly $400 annually. and sending prices through the roof. The Congressional Subcommittee on S Oversight and Investigations has been look- ing into the influx of investor home- >> p4 3 3 ome believe the increase of institutional investors in the single-family-rental mar- ket also is taking homes off the market dallasobserver.com dallasobserver.com | CONTENTS | UNFAIR PARK | SCHUTZE | FEATURE | NIGHT+DAY | CULTURE | MOVIES | DISH | MUSIC | CLASSIFIED | CLASSIFIED | MUSIC | DISH | CULTURE | UNFAIR PARK | CONTENTS DALLAS OBSERVER DALLAS OBSERVER MONTH XX–MONTH XX, 2014 OCTOBER 6–12, 2022
