Banks invest in South Dallas
The resurgence of The Bottom neighborhood seen as a model for transforming long overlooked and overlooked areas.
DALLAS— Editor’s note: The video above is taken from a story that previously aired. Be sure to watch “Banking Below 30” tonight on WFAA at 10 a.m.
For Mekeyas Newaye, the cost of buying a first home always seemed a little too out of reach.
“When you’re in ministry and your wife is a teacher and you have kids, you’re like, ‘How am I going to afford this? “”, Did he declare.
But then he and his wife found a place called The Bottom. Located east of Interstate 35 and just south of the Trinity River levee, it was first settled in 1845 as a community of newly freed slaves. Today it is a housing estate. About 100 new homes will emerge from the vacant lot, including 51 earmarked for affordable housing for families with a maximum income of $71,200.
“Each month you witness growth, you witness resurrection,” Newaye said. “You’re almost drawn to say, ‘Oh, wow, I’m part of something.'”
In our Banking Below 30 series, we showed you how many banks avoid lending money in black and Hispanic neighborhoods in Dallas, preventing minority families from building wealth.
Then we heard about banks lending money in The Bottom. We wondered what would convince a risk-averse bank to lend money to a high-minority, low-income neighborhood with crumbling infrastructure where almost nothing has been built in over 50 years?
“I see hope,” said Effie Dennison, director of community development and corporate accountability at Texas Capital Bank. “I see a dream come true.”
In a previous story, we reported that Texas Capital is participating with other banks to lend hundreds of millions of dollars to high-cost lenders that critics say prey on minority neighborhoods.
But here at The Bottom, Texas Capital was the first to make a loan. While the amount is undisclosed — Dennison describes it as a line of credit in “the millions” that funds the construction of new homes — Dennison says banks have an obligation to seek out such deals in minority neighborhoods below I-30 in South Dallas.
“You can’t do this sitting in your office and thinking it’s just going to come and fall into your lap,” she said.
Dennison said one of the reasons the bank felt comfortable lending here is because the city of Dallas made it attractive by putting in its own money: $2.4 million given to developers to buy land and make neighborhood improvements; and $5.25 million spent to dig new sewer lines, pave roads, and install streetlights.
“This investment is one that we view as good business, not charity,” Dennison said. “This loan was to be taken out like any other, but we knew we had to look at it from a different angle.”
Does this mean that the bank will agree to make less money in The Bottom compared to an investment in Prosper or Plano, for example?
“We really look at the overall impact of what we do,” Dennison said. “It’s also our heritage.”
They build about 10 houses a year in The Bottom and they are built by small black builders, like Calvin Berry. During his career, he built about 300 houses, but even someone as experienced as him has trouble finding a bank willing to provide construction loans.
“We have to take out a mortgage on our house,” he said. “You mortgage your own house to go and build a house…because the bank won’t give you the money.”
Berry doesn’t need a bank for this job because he was hired as a contractor. Receiving a paycheck is far less profitable for him, but he hopes his work here will lead to better banking relationships – so he can get his own loans to build his own homes in other parts of town.
“You can’t go anywhere without the opportunity,” Berry said. “Even if I have to work a little harder…it gives me relationships that I might not have had, you know, but I’m here again.”
For Newaye, it wasn’t just the affordable sale price that allowed him to buy his home in The Bottom. It was also Bank of America.
Previously, we reported on the low lending by some banks in the neighborhoods surrounding their South Dallas branches. This includes Bank of America. Near Fair Park, it granted 19 home loans in two years. However, in a similarly sized area in the Lakewood neighborhood of Dallas above I-30, it granted 143 loans during the same period.
But Newaye had a different experience. For his loan, Bank of America gave him cash to meet his down payment and a discount on his closing costs.
Bank of America said it was part of an initiative to help 60,000 low-to-moderate income families buy homes by 2025 and strengthen neighborhoods.
Being able to transition from tenant to landlord is life-changing, Newaye said.
“I think landlords, especially for a family, is something deeper,” he said. “You can say, ‘Every little piece of this house is mine, and I don’t have to worry, are we going to…move to another apartment?’ “”
City leaders say there is an urgent need for 20,000 affordable housing units in Dallas. When built, it is mostly apartments. But it’s home ownership that really impacts lives – sending ripples of confidence through a community. And that kind of change doesn’t happen without a bank ready to lend.