In the News

Editorial
Dallas Morning News

To understand the oddity that Dallas can be, we need look no further than Preston Center — that time-warp that anchors, in every sense, one of the city’s greatest areas of potential.

Dallas has a well-earned reputation for ripping down whatever stands in the way of what’s next, with a habit of substituting plaques for the meaningful places of our past.

But at Preston Center we are faced with a backward circumstance where so much energy and effort has gone into the permanent sustenance of ... a parking garage.

And not just any parking garage, but a parking garage that, in itself, symbolizes a suburban past that the corner of Northwest Highway and Preston Road should have left behind long ago.

Instead, because of a strange arrangement between the city and myriad stakeholders/investors/owners who control Preston Center, we have had stagnation that has stymied the potential to transform not just Preston Center but the larger Northwest Highway corridor into a truly urban part of Dallas, with all of the benefits that suggests: increased residential density, walkability, true transportation options and a boost to the tax base that could benefit all of us.

The issue is germane today because there are, at long last, signals that some compromise is brewing between the city — which owns the parking garage and is required to provide parking for the center — and the aforementioned stakeholders who have wielded veto power over anything other than just another parking garage.

City Hall has pushed, sensibly, against an effort to simply park another parking garage where the current version — aging and misdesigned — sits now. Instead, a proposal to use city funds to bury a new garage and place a useful public park atop it was floated to a less-than-enthusiastic cadre of stakeholders at Preston Center.

Unfortunately, that appears unlikely to be what the public will get. Instead, a hybrid plan that would see some sort of public space capped atop an above-ground garage appears to be gaining traction.

Should that come to pass, it would mark a missed opportunity to truly move forward with Preston Center. But it may be the only way to move any direction at all, so with grudging consideration, we would gingerly support a plan that provided a true public space. Design is critical, insofar as it incorporates this land as a usable public space that will enhance the Northwest Highway corridor and be a building block for a more urban future.

Which brings us to a couple of other concerns, one specific, one general.

The specific concern was raised in a recent column on these pages by Michael Morris, transportation director of the North Central Texas Council of Governments.

The NCTCOG was tasked with studying Preston Center and offering ways forward. Sensible ideas emerged that Morris has rightly promoted — including adding a Texas U-Turn on the Dallas North Tollway at Northwest Highway, better timing traffic lights to prevent backups and installing desperately needed pedestrian infrastructure.

But Morris also posited the following question: “Why not review Dallas North Tollway ramps that have been missing for generations to determine the appropriate balance of travel to and from the tollway on city thoroughfare streets?”

Inside the vagary here is the suggestion that Dallas should accept additional toll road ramps at Walnut Hill Road, just north of Northwest Highway and Preston.

This is exactly the opposite message that Dallas residents have been trying to send Morris for years. Dallas does not want its future to look like its past — with expanded highways pumping more traffic onto arterial streets. The sound rejection of the Trinity River toll road should have been lesson enough to Morris, the NTTA and anyone else who thinks the city should pave its way to the future with on/off ramps.

Which brings us to the bigger problem that Preston Center represents — the persistent opposition to change in an area where the market is calling for it. A master plan for the area completed two years ago with the input of a committee of residents reads more like a recipe for continued paralysis than a genuine vision for moving forward. Its concludes that traffic must be addressed before redevelopment can commence.

That’s the wrong way to approach this area.

The intersection of Northwest Highway and Preston Road is an opportunity for Dallas to embrace the sort of urban and urbane future that is probably inevitable anyway, but that is stymied and thwarted by a handful of opponents who would have us wait until circumstances are perfect to move forward. That’s great for those who prefer things just as they are — even when it is increasingly evident that things as they are aren’t working as they should.

The area’s future is in increased residential and commercial density that will increase values and create a neighborhood where above-ground parking garages are a poor value for the land they occupy and where people can get where they are going without a car.

The sooner that Preston Center’s stakeholders, as well as landowners up and down Northwest Highway, recognize that, the sooner Dallas will be able to build toward a better future. 

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Candy's Dirt
by Jon Anderson

As promised, It’s time to see what’s been going on outside of view – a gift just in time for the holiday season. There was a meeting on November 1 at City Hall with Council Member Jennifer Gates, Plan Commissioner Margot Murphy, and a bevy of opposition to the Authorized Hearing within PD-15 behind the Pink Wall.

The opposition was a combination of the usual suspects and a few oddities:

Group One:

• Former Mayor Laura Miller
• Former State Representative Steve Wolens (Miller’s husband)
• Former Texas Senator John Carona
• Former State Representative Will Hartnett
• Former District 13 Council Member Sid Stahl
• Former District 13 Council Member Donna Blumer
• Former District 13 Council Member Mitchell Rasansky

Group Two:

• Preston Tower authorized hearing committee members: Tatiana Frierson and Bob Bowling
• Athena authorized hearing committee members: Barbara Dewberry and Margaret Darden.
• Roger Albright: Athena and Preston Tower legal council
• John Pritchett: President of the Preston Hollow South Neighborhood Association and Preston Tower resident and representative on ill-fated first PD-15 task force
• Steve Dawson: Northwest Highway and Preston Road Area Plan Zone 4 representative and neighborhood representative for ill-fated first PD-15 task force. Dawson’s family own a small apartment building inside the Pink Wall while he lives in Park Cities.

Looking at the first group, you begin to wonder why these people are even concerned with this issue. I don’t recall any of them attending a single Authorized Hearing committee meeting – certainly ante to the game for forming an opinion so strong you’re signing letters and demanding meetings with the council member?

There certainly isn’t much personal skin in the game either. Miller and Wolens live in a magazine-worthy, multi million-dollar home on the other side of the Tollway (renting Wolens’ mother’s former Athena unit). John Carona has two homes in DCAD, each about two miles from the Pink Wall. Donna Blumer is over six miles away. Will Hartnett is about three miles away, while Mitchell Rasansky lives three and a half miles away. Octogenarian Sid Stahl is a leasing tenant of the Athena (so if there ever is a vote, he has none).

It’s safe to say that this group, with the possible exception of Sid Stahl, will suffer no ill consequences of any increased density within PD-15. Any potential financial hit to Miller/Wolen’s Athena values are unlikely to land them in the poor house either (and many would argue their stance, if successful, would damage their condo’s value). So this group has almost no personal financial or aesthetic consequences in development within the Pink Wall nor is there much of a real-world concern for traffic within its boundaries. Aside from being personal friends of the Miller/Wolens, why are they involved?

Yes, Stahl, Blumer, and Rasansky are three of the four prior District 13 City Council Members. But isn’t it the height of political tackiness for them to take an uninformed stance to criticize the current District 13 representative? It would be one thing if current Council Member Gates asked for their input, but that doesn’t appear to be the case.  One wonders when they had the chair how they would have reacted to being told their job by predecessors who left office decades ago?

Also, while they paint themselves as concerned citizens, they have no clue what the area residents really want (no one does) and yet hold themselves up as stalwarts of the oppressed. Those with good memories will recall much of this group lined up behind Miller fighting Transwestern’s The Laurel, protesting Highland House (the kind of development Miller’s Preston Center Plan begged for) and the Preston Center Sky Bridge. Her current hobbies include opposing anything being done in PD-15 and the St. Michael’s redevelopment. For any development project in recent years near Preston Center, Miller has been the “no to gal.”

The remainder are towers representatives and local development agitators (although Dawson could be in both categories given he, too, doesn’t live in the area).

It’s funny. These groups claim to represent 78 percent of the residents of PD-15. But they don’t really. In zoning cases, the city doesn’t allow individual owner voting within multi-family housing unless HOA rules allow it. Regardless if we’re talking about a handful of townhouses or a complex of 1,000, the city boils it down to a single vote of everyone. A complex can escape this dictatorial voting by inserting language into their HOA documents that enables individual owner voting. Neither Preston Tower nor Athena have such language.

Many HOA documents are so unanticipatory on issues like this, often the HOA boards don’t even have to poll their co-owners for guidance. An HOA board can simply vote their personal desire. And so, it’s on the strength of two HOA boards alone that the claim of 78 percent representation is made. No developer has presented to residents, no debate has occurred, no vote taken. The original task force meetings and current authorized hearing meetings are sparsely attended by towers residents enabling this asleep-at-the-wheel hijacking.

When towers representatives say they’re doing what residents want, it boils down to who they talk to in their everyday lives and who they run into in the elevator. Hardly representative. When Laura Miller says she speaks for 78 percent of residents, she’s talking only to the HOA boards – because the rest of the residents don’t matter for the purpose of inflating the support for her position.

The Meeting

According to emails obtained through an open records request (here and here), we can see Miller trying to setup a meeting between her “group one” and Gates. The topic was a letter Miller wrote and they signed nearly six months prior in May – before the Authorized Hearing committee members had been announced. In an old-school power play move, they wanted Gates on their turf – Carona’s Associa offices (Associa is a nationwide HOA property management company).

The question I ask myself is, “What happened in October that caused Miller to resurrect her months’ old letter as entre to a meeting with Gates”?

Gates agrees and a date is set, but at City Hall. Then Miller adds in “group two” from the towers. Gates is unhappy with the large group and wants to meet with them separately. She later tells John Carona, “I have been ambushed and treated disrespectfully in the past by Laura [Miller] and I will not have that happen again.” A city staffer passing outside the meeting tells me that Miller’s voice was heard to loudly scream at one point “This is your fault!”.  That tidbit certainly strengthens Gates’ wariness of Miller.

In my opinion, it would have also be interesting for Gates to see how the puppets act without the master. Ultimately, Miller got her way and all 15 are invited. It seems Blumer, Rasansky, and Carona beg off citing confusion and double-booking.

Rasansky begs off telling Gates “I know zoning. The developers should file their own zoning cases, as is the norm.” Had Rasansky been keeping up with this process, he would have known that unlike other zoning cases, PD-15 has a cap on the total number of units in the PD. This makes it impossible for developers to file a zoning case except for the surplus 65-ish units that are a shared resource between six parcels spread across 13-ish acres. As Gates said last week, such a case would be DOA at City Hall. At a bare minimum, the dwelling unit cap must be lifted for cases to proceed.

Donna Blumer’s regrets say in part that, “However, please be assured that I remain in full support of the others who signed the letter addressing the neighborhood’s concerns.” That support is for a letter signed by a handful of HOA representatives without the input or support of their residents.

While Carona says he’d be “Glad to meet with the residents of the low rises …,” “he later says, “At the moment, the only people I’m personally interested in meeting with are those that have requested to be in Thursday’s proposed meeting,” although later stating “Candidly, I have no desire to interfere.” (Then why are you?)

In a nutshell, these three former local and state lawmakers were willing to jump into an issue they know little about without first trying to get a balanced perspective.  Uninformed and listening to one side isn’t the best way to make a decision – especially troubling from former lawmakers.

Sources say Carona has made no overtures seeking to understand the low-rises’ side.

The Recap

Laura Miller enlisted a group of former politicians and personal friends to stump for a cause that many, if not all, had little personal stake in and who are highly unlikely to fully understand the issue outside what Miller has told them.

After the meeting, Miller sends a “thank you, but…” letter to Gates. In it she twists again noting that “the two developers who are driving this process”. Funny, but for months, the trope was that developers would bypass the neighborhood. Once they presented their plans, suddenly they’re driving this process. It’s a “have you stopped sleeping with hookers?” no-win argument.

She later notes, “The traffic levels in and around Preston Center are completely unacceptable.”  Funny how the Preston Center task force Miller drove reported that traffic has been decreasing for nearly two decades along both roads. It would be more accurate to say that traffic around Preston Center is becoming less unacceptable every day.

Even though city staff reiterated this external research in the past few months, Miller quotes Elizabeth Mow, Assistant Executive Director for NTTA as saying, “It’s gridlock all the time.” As a local resident, I can tell you that outside rush hours, it’s not gridlock even most of the time. If Mow was referring to the Tollway (which seems more likely given her job), there’s not a lot to do, nor will PD-15 development have a noticeable effect.

There is also talk of the Texas U-Turn on Northwest Highway and the Tollway. As I pointed out nearly three years ago, there isn’t the physical space to put one that would help with Lomo Alto/Tollway turn-around traffic.

Post Recap

On Nov. 8, Miller distributed an alarming email and petition encouraging residents to protest both PD-15 development and the St. Michael’s project. Not surprisingly, Miller used her typical charged and unproven language about her representation of 78 percent of PD-15 residents and traffic while inserting the baseless claim that developers want to build 25-story high-rises all around Athena and Preston Tower – no plans for four high-rises have been presented or asked for except in Miller’s (and coincidentally) the towers’ representatives’ dreams.

Miller’s stance on St. Michael’s cracks me up. The press release about the proposed development calls out how the development adheres to her Preston Center plan eight times in slightly more than a single page – and yet Miller is opposed. Would nine or 10 genuflections have changed her mind? (Ironically, one of her chief gripes about PD-15 is that development goes against her Preston Center Plan.)

I still have no idea why Former Mayor Miller has inserted herself into all things Preston Center. It all reminds me of the seven-time Academy Award winner who winds down their career as a game show host breathlessly trying to hang on to the spotlight – in this case, the kiddie pool of neighborhood development.

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Dallas News
Steve Brown, Real Estate Editor

The newest apartment tower on the way in Dallas' Victory Park project won't open until 2021.

That's probably a good thing.

The Dallas area has seen a flood of new high-rise, high-priced rental projects in the last few years and more are on the way. Developer Hines' 39-story Victor tower in Victory Park will be one of the biggest.

The builders are betting that with a 32-month construction schedule, most of their competitors will be out of the market by the time The Victor opens.

"We are well aware of the supply Dallas has built unlike anywhere else in the country other than New York," said Hines' Corbin Eckel. "Luxury residential has seen a large influx of new units at the same price point."

Dallas leads the country in apartment building with almost 35,000 units in the construction pipeline. So far, the local market has gobbled up almost everything developers can throw at it, fueled by several years of more than 100,000 jobs being created every year in the area.

But a flood of high-rise projects coming to the market in the next couple of years will be the real test.

In the last year and a half, more than a dozen high-rise apartments with about 3,000 luxury units have opened their doors in the Dallas area. And another 15 luxury tower rentals are under construction or about to start with a staggering 4,500 units.

"There's still quite a bit of high-rise product on the way," said Greg Willett, top economist with Richardson-based RealPage.

Most of the new tower apartments are headed for Dallas' Uptown and downtown markets. But there are high-rise residential buildings in the works up in Plano and Frisco, too. The average monthly rent for these projects is just under $2,000 a month — nearly twice the overall monthly apartment cost in North Texas.

The most expensive penthouse apartments can run well over 10 grand a month.

"That pool of resident prospects for high-rise product looks comparatively shallow," Willett said. "Thus, we can only handle a limited block of completions in that niche at one time."

So far, occupancy levels in the apartment towers are more than 93 percent — slightly less than the overall market.

"Even more telling, rents are being cut 0.8 percent on an annual basis in the high-rise segment," Willett said.

With so many more new super-luxury, super-price apartments on the way, don't be surprised if there are more bargains offered for renters. A month of free rent is already common in the market.

High-rise rental developers are betting that local job growth and moves to the area will keep filling up their new units. And lenders are keeping a close eye on the development pipeline.

"You are going to see capital markets limit new project developments," said Hines' Eckel. "The banks are aware of the supply in Dallas."

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Candy's Dirt
by Jon Anderson

The run-up to Wednesday’s tenth PD-15 meeting should’ve filled area residents with anger. The self-centered towers were at it again. On Monday, Athena management company ICI Real Estate sent residents an “URGENT!!!” call for Athena residents to attend last night’s meeting (Preston Tower did the same).

It said Bob Bowling from Preston Tower was going to make a motion to dissolve the authorized hearing and send developers directly to City Plan Commission. Athena representative Margaret Darden was scheduled to second the motion after which residents in the audience were encouraged to stand and applaud. It was so kindergarten, I’m surprised there wasn’t a warning about not eating paste.

Their argument consists of the same tired, disproven tropes as always – four high-rises, unprecedented traffic and 10 years of non-stop construction. Blah, blah, blah. If you want to sing that song, read this or this.

NOTE: ICI seriously overstepped their bounds by sending such a loaded, propaganda-filled email to residents under their own account. Darden and Dewberry should have sent their drivel opinions and plans from their own accounts. (Full disclosure: I send email wrap-ups and links to PD-15 stories to residents within the building under my personal account. I have never asked or even thought to involve the management company.)

You may recall back in July, I reported on an email Preston Hollow South Neighborhood Association (PHSNA) president John Pritchett sent to committee members where he said they’re “not the A-Team in terms of zoning matters.” Apparently, Towers representatives Bob Bowling, Tatiana Frierson, Margaret Darden and Barbara Dewberry agree with the assessment, so hot are they to disband the committee. It’s almost comical, too. The Laurel apartments on Preston Road and Northwest Highway are pretty universally disliked and yet these representatives are in the same camp as Pritchett, who —to hear him tell it — single-handily led the negotiations for the neighborhood with developer Transwestern.

NOTE: If any member of any committee feels too stupid to do the job, resign and stop trying to crater a process everyone else is working in good faith to complete.

Storming the Gates

This is all on the heels of a meeting last Thursday between Council Member Gates, Plan Commissioner Margot Murphy and a city attorney, and an opposition consisting of the usual suspects – former Mayor Laura Miller, husband Steve Wolens, John Pritchett, Athena reps Margaret Darden, Barbara Dewberry, Preston Tower reps Tatiana Frierson, Bob Bowling, and Roger Albright (Towers attorney). Also part of the parking pass request was a Who’s Who “Who Was” of Dallas politics (in addition to Miller and Wolens).

Based on email exchanges obtained from an open records request, the purpose of the meeting seemed to essentially be to harangue Council Member Gates and Commissioner Murphy into disbanding the authorized hearing. Once I’ve parsed the documents, look for a column next week – let’s call them the PD-Papers. The only shame is that Councilmember Gates’ office isn’t wired for recording.

And then this morning I read in the Chicago Tribune that a city project to improve O’Hare airport had whittled 12 submissions down to five. The remaining five would create models of their proposal that would circulate through the city for public comment. It reminded me that on a smaller scale, this is what the authorized hearing committee should have been but for the pettiness of the towers.

It’s on the heels of these backstage machinations that I entered PD-15’s meeting number 10.

… and I loved it.

Councilmember Gates was the lead speaker with a backup band from city government. A cop even whisked through to see if there was going to be trouble (waving canes can hurt). But no police were needed. No city hall backup band was needed beyond the odd clarification during the Q&A.

With smoothness hinting at practice, Gates simply closed the doors to Crazytown – without the finger-pointing I personally couldn’t resist. She outlined and reiterated what has been said and reported for over a year. Simply:

1. Developers can file for a building permit only if they want to rebuild exactly what exists/existed.
2. Developers can file a zoning case for the 65-ish surplus units that remain unbuilt in PD-15. But the case would be “DOA” at Plan Commission and City Council because assigning those surplus units to one property would enrich them at the expense of the other property owners in PD-15. Translation: Not gonna happen.
3. The representatives from the six properties within PD-15 could unanimously agree to changes to the PD and present those to Plan Commission and Council. That process failed a year ago almost entirely because of Preston Tower and the Athena.
4. The current Authorized Hearing process is the only way to increase the limitations within the PD and move forward.

So the plan for Preston Tower’s Bob Bowling to call for a dissolution of the Authorized Hearing to force developers to file zoning cases directly with Plan Commission was always a fool’s errand. It was comical to listen to towers representatives surprised to (again) re-learn the truth behind this process. Athena representative Barbara Dewberry even commented that the towers had been told something different by their attorney Roger Albright.  Gates answered with number two above – yes developers could file, but it would be DOA. Even with all this (and what you’ll see below) near the end, Bob Bowling spoke about what he’d planned to do earlier. He ended by saying that if January doesn’t go well, he’ll bring his motion again to dissolve the Authorized Hearing and let developers file their own zoning cases – you know, that thing that can’t work (insert eye roll).

Gates went into further detail, that too had been covered in prior meetings. The city would not issue a building permit for a project that would exceed the capacity of sanitary sewers. It’s unlikely stormwater flooding would be made worse by development because the lots are pretty much covered in concrete already which is the driver of runoff (nowhere for the water to go). Chief Planner David Cossum made these points months ago, but much like the concrete-covered land, some ears were similarly covered.

Gates did suggest that between a small office budget she controls and the developers at the table on Preston Place and Diplomat, a traffic optimization study should be completed. Of course, the few thousand dollars such a study would entail could have been paid for (perhaps multiple times) by the towers’ $400/hour attorney engaged to fight the process.

Go Play While Mommy and Daddy Work

The next step is that public committee meetings have been suspended until January. The realization that the children were unable to share their toys forced Gates to engage city staff to craft their own recommendation. That plan will be presented to the committee in January for discussion with the hopes of reaching enough consensus that it could proceed to a full-on public outreach meeting before heading off to Plan Commission and Council.

It’s hugely sad that these people (mostly the towers) in their unending attempt to hold everything back (based on erroneous information from multiple sources), have squandered a once in a lifetime opportunity to shape their neighborhood. Put in perspective, imagine …

A child grocery shopping with a parent. The parent tells the child to get some broccoli for dinner. The child throws a tantrum wailing they weren’t eating broccoli ever, ever, ever. You and I know that child is getting broccoli. But what if the child had asked for peas instead? They’d be eating peas that night because it was a win-win. The towers (ironically, housing an inordinate number of grandparents) have spent over a year bitching about broccoli rather than negotiating for peas.

Finally, realizing some collaboration was needed for consensus, Gates encouraged the committee to continue to meet privately to see if their impasse could be breached. The Preston Place (Provident) and Diplomat (A.G. Spanos) developers were similarly encouraged to work together on a solution. All parties were encouraged to share with city staff and ask questions as needed between now and the January meeting.

Committee member Jim Panipinto suggested that the developers work with city staff to craft the recommendations – hell no. Those directly enriched by a process shouldn’t be crafting the parameters of the process. It’s more than a little “finger-on-scale” for my tastes.

Given this new timeline, there could be a sick satisfaction in this being mostly wrapped up in March, the second anniversary of the Preston Place fire. Amongst the petty bickering and power plays, something that seems to have been discarded from memory.

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Dallas News
Steve Brown, Real Estate Editor

Last year, almost 100 percent of the apartments built in Dallas-Fort Worth had something in common: They were all high-end rental units.

With developers in the biggest apartment-building market in the country aiming for the same slice of the rental pie, North Texas now ranks high among markets with the largest share of pricey, luxury apartment building.

D-FW has more high-end apartment buildings than any other metro area in the country, according to a study by Yardi Systems, just as in 2017. Nationwide, 8 out of 10 apartment communities that opened last year targeted high-end renters.

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"Encumbered by high construction costs and encouraged by a surge in demand for rentals, developers have bet big on high-end apartments," Yardi analysts say. "Back in 2012, high-end properties represented about half of all new completed construction, but now these projects occupy the lion's share of the multifamily industry.

"Nationally, about 87 percent of all large-scale apartment buildings completed in the first half of 2018 are high-end."

The surge in construction of deluxe rental units comes at a time when demand for affordable apartments in major U.S. markets is at an all-time high.

"Almost all of the new dwelling units being delivered are Class A — they are higher-end product," said John Sebree, national director with commercial property firm Marcus & Millichap. "The number of new high-end households being created is a much smaller percentage.

"A large percentage of those new households are B and C apartment tenants, and we are not creating any more B and C product."

What's worse, thousands of older B and C apartments around North Texas are being knocked down for pricier rental communities.

(The share of high-end apartments being built nationwide has almost doubled./Yardi Systems)

Because of the shrinking pool of older apartments, rents in those units are rising at a higher percentage than new luxury apartments that are flooding some markets.

High-end apartment rents are up less than 1 percent this year in D-FW, and neighborhoods with older units are seeing rents rise more than 3 percent.

"The strongest rent growth has been in the neighborhoods where we are not building much in this cycle," said Greg Willett, chief economist with Richardson-based RealPage. "We have really filled up the neighborhoods where you see Class C units.

"Historically, you have had chronic vacancies there. Those areas are now jam-packed full."

While D-FW's employment base and population are growing, incomes are not rising fast enough to keep up with apartment rents, which have grown almost 40 percent in North Texas since the recession.

"A bigger share of the population can only afford those Class C units," Willett said. "They have been priced out of the middle market and upper-tier properties."

Developers say rising land, construction and financing costs make it almost impossible to build workforce apartments in many urban areas.

"We have chosen to play in the upper end," said Tom Bakewell, one of the founders of Dallas-based apartment builder StreetLights Residential. "We are going to go even higher-end."

StreetLight's newest Dallas rental high-rise on the edge of Highland Park has average rents of $5,000 — almost five times the D-FW average. Tenants' average age in the McKenzie building is in the 50s, and they lease units for as long as two years.

"We are going to try and roll these out in more cities," Bakewell said. "We will only do a few of them in most markets."

Dallas and Fort Worth have one of the country's largest shares of new high-end apartments. (Yardi Systems)

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Preston Hollow People
October 19, 2018 Staff Report

National Night Out attracted throngs of residents Oct. 2 at Preston Hollow Park where members of the Dallas Police Department, Preston Hollow Homeowners Association, and the Center for Transportation Safety spoke on neighborhood safety.

Juli Black, president of the Homeowners Association, emphasized neighbor awareness, and Neal Johnson of CTS spoke about bicycle safety. In Briarwood, 13 restaurants participated in a Taste of Lovers-themed event along with the Briarwood Crime Watch Association.

(Photos: Chris McGathey and William Legrone)

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by Jon Anderson
Candy's Dirt

Tower Spacing: Through Thick and Thin, Thick Matters

There’s a bit of a special language being formulated between the Authorized Hearing committee members. For example, when the city facilitator recaps a prior discussion by saying, “We agreed on X,” a committee member or two will pipe up “We didn’t agree on that.”  What they really mean is they didn’t. And since they didn’t agree, there could be no agreement. Everyone believing they’re getting 100 percent out of this is a recipe for nothing ever being decided. Ancient children not wanting to share their toys.

Parking

The session revolved around a review of responses to last meeting’s homework on a variety of topics, and trying to get some consensus. The first of those topics was a discussion of parking requirements. In many regards it was a pointless discussion. The committee members are not parking experts so to ask their opinion on whether it should be one space per bedroom, 1.5 spaces per unit or two spaces is all so much guesswork. Woven into this was the fear that developers would build too much parking and be left with a surplus once Uber took over the world.

Here’s the thing, there’s never unused parking in multifamily developments. If there was a global automobile rapture tomorrow, parking spaces would be repurposed for storage (much to the chagrin of the storage industry), or amenity space, or even built out for additional living space (above-ground, flat garages). It’s not like it would go to waste. So don’t worry about too much, only too little.

There was light discussion on street parking with a few wanting to eliminate it. But you can’t really. Each building will likely maintain a handful of outside spaces for drop-offs, quick visits and the like, where going into a garage is a little silly.

Beyond numbers, most seemed OK with at least some above-ground parking so long as it was camouflaged in some way (wrapped in apartments or attractively screened). I did smile at one response that thought underground parking should be required for Athena and Preston Tower as though they should dig a hole 50 years post-construction.

Height Limits Using RPS. (Boo-boo: Preston Tower is 8-stories taller than Athena but only 17′ taller?)

Residential Proximity Slope (RPS)

You recall, RPS is not required for PD-15 but many want to see how using RPS would play out. RPS is a slope that runs from single-family neighborhoods towards areas with higher allowable buildings. It’s designed to curtail tall buildings from looming over homes by pulling them back and away. Think about the stair-step buildings you see at Preston Center along the tollway that pull away from Devonshire.

RPS caused a lot of heebie-jeebies. Diamond Head Condos’ representative was particularly vocal about not wanting to be subjected to the measure because it would limit their redevelopment from infinite height.

But the funniest head-snapping happened when someone said RPS should be used, and that the Athena and Preston Tower should be subjected to it should they ever redevelop voluntarily or as a result of an act of nature (shrinking their allowed heights).  You never saw two grandmothers stammer “grandfather” so fast. You see, they’re OK dictating to everyone else and giving no purchase, but limiting their properties sent a few volts through.

And you know what? As negative and stingy as the towers have been, were I a low-rise representative, I’d make it my life’s work to tie the Athena and Preston Tower to the RPS.

Sorta in the same ballpark as RPS is Tower Spacing – step-backs when two tall buildings are too close.  Athena said “yes” and Diamond Head said “no.” I say “yes” and here’s why:

Everyone points to Preston Tower’s garden building, saying it’s not on top of Preston Tower, but here’s the thing: The garden building is two units deep. Diplomat and Diamond Head are two buildings deep with a slight separation. This makes their buildings twice as thick as the garden building and therefore twice as close to their neighbors. As it stands, there is a wider separation between Diplomat and Royal Orleans already, but Athena and Diamond Head get REALLY cramped at height. If Diamond Head Condos is going to extend into the residential floor plane of Athena there needs to be a step back. I would daresay that the complexes on Diamond Head’s northern boundary would want a step back, too.

Oh, and by the way, it doesn’t matter what I, Athena, or Diamond Head think. PD-15 states that if some parameter is silent in the PD-15 documents, it defaults to MF-(3) within Chapter 51. Tower Spacing is denoted in Chapter 51. While the committee may be empowered to waive it, unlike RPS, they’re already governed by it. City staff seemed to position it as an option. Not really. It’s there.

One protectionist thing the towers representative said I did agree with: Diamond Head lamented having to look out her window at the tall face of Athena. The response to Diamond Head was, “you knew what you were buying” – and they’re right. It’s a corollary to moving next to an airport and complaining about the noise. I have no sympathy for that argument.

Diamond Head Condos

This is as good a place as any to say that Diamond Head annoyed me last night. I’m not telling tales out of class here as I spoke to their representative after the meeting. Their goal last night for any dimension was the tallest, widest, densest structure possible – more than a little greed. She said later that she figured the city would probably not approve such a building, but they wanted an enormous envelope so a developer could then fight it out at City Hall.

The first thing I said was that her unrealistic excessiveness was scaring people and causing some to dig their heels in (counterproductive in a negotiation). The second thing is that a huge envelope that you then leave the city to decipher misses a trick. The wonderful thing about this often-confusing and frustrating process is that it places a level of control in the neighborhood BEFORE projects go to Plan Commission and City Council. Why would you want two sets of eyes on something instead of three? Especially when one of the sets is the very local neighborhood that can add some specific tweaking that might not matter to the city, but would matter a great deal to the neighborhood?

What I didn’t say, only because it occurred to me later, was that even if a virtually unlimited buildable envelope was given, the city would knock it down to something realistic when a developer tried to fill it. Developers don’t pay on “maybe,” they pay on “permits.” So whatever a developer agreed to pay (on contingent) for a seemingly unlimited envelope would be discounted right back to what they got permitted. So there is no point in getting a bazillion dollar buildable envelope when the city will only ultimately approve a quarter of a bazillion dollar project. The ultimate money paid to the landowner is the same. But the process is stretched out unnecessarily due to the battles that would be fought and it needlessly scares the behoozis out if the neighborhood. Ultimately it serves everyone if you work towards an 80-90 percent nailed down envelope so a developer only needs minor tweaks.

Setback relief could eat into the frontage road??

Setbacks

More comedy ensued on setbacks. I’m going out on a limb and say this homework question wasn’t explained very well.  There is an existing 100-foot setback from Northwest Highway north to Preston Tower, Preston Place, Royal Orleans, and Athena. As far as I’ve determined, it’s in each of the building’s deeds. But the question asked what an appropriate setback should be.

Before getting to the responses, it’s important to know that the actual Pink Wall from Northwest Highway to the first curb is about five feet. Then there’s a parallel parking lane across most of the stretch (call it 10 feet). Then there’s a generous two lane road. After that there’s differing land uses before hitting a building. All totaled, 100 feet.

Three committee members were OK with a 30-foot setback from the “property line” which is Northwest Highway. That would result in a building almost in the middle of the frontage road. At 40 feet, it would only be a handful of feet north of the roadway before a sheer face of building would be possible.

Maybe you want to rethink that. Not only would it pull the buildings out of alignment, but it would be fairly ugly (you don’t see single-family homes next to the sidewalk either).

There is really only one reason to even consider this – Royal Orleans. While Preston Place has all the land it needs at about two acres, Royal Orleans sits on a lot made tiny by required setbacks on all four sides. If they could build significantly into the 100 foot Northwest Highway setback, it would make their property more valuable. But at what cost to the neighborhood aesthetic? The building already encroaches onto the 100-foot setback with a yard and pool that pinches the frontage road.

Their representative seemed to be advocating for zero setback outside the frontage road. This would add about 65 feet to their buildable lot and pull one building significantly out of alignment. Coupled with their desire for the “front” of their building to face Diamond Head Circle leaving the frontage road framed by a tall, sheer block jutting out of alignment and into the view plane.

No. I’m sorry, that’s too much ugly to swallow. I didn’t design PD-15 and the current owners of Royal Orleans likely didn’t purchase with the hope of cashing out to a developer (and if they did, they shouldn’t have bought the smallest plot in the area). Sure, it’s frustrating and feels unfair when neighboring buildings are able to redevelop into more salable projects, but life ain’t fair. While some accommodations may be made, Royal Orleans’ dirt simply isn’t worth as much because there isn’t enough of it.

Also, Royal Orleans has been in talks with Preston Place’s buyer, Provident. If Provident connects the two parcels, no setback relief is needed, period.  And the neighborhood certainly doesn’t need both buildings to be pulled forward.

Side And Alley Setbacks

Who’d a thunk there could be so much hoo-ha about alley setbacks. They’re currently 20 feet which essentially equates to the carports lining the alley. For some reason city staff kept harping on wanting sidewalks in the alley. Why? Leisurely strolls by mechanicals, HVAC chillers, and whiffy dumpsters all while gazing poetically up at power lines?

Side lot setbacks range from 10-to-40 feet with a patchwork of sidewalks. I urge ALL committee members to carpool around Uptown, Oak Lawn, and Knox and look at new apartment buildings and their setbacks. Most are 10-ish feet plus a sidewalk – pretty dang close to the street. Put in perspective, my sofa is 10 feet long, and as a setback not too impressive. As for sidewalk width, let’s call it a two-scooter passing width.

Height And Density

The question of height returned silly answers. Responses were cast for all the low-rises between 25 and 330 feet tall.  Density-wise, responses ranged from existing units per acre to 160 per acre (35 units per acre MORE than A.G. Spanos is asking for seems excessive). Helpful, no?

The Athena and Preston Tower were pegged at their existing heights with other replies including RPS (205′-285′ – or 125′ for garden building), 250′, and 330 feet tall. Ditto on density here too – existing to 160 per acre. Again, not too helpful.

One committee member’s math skills proved shy of the mark. It was posited that $700,000 townhouses would be just as profitable for everyone. Nope. Here’s the deal: assuming the average footprint of a townhouse and cramming 15 on an acre (pretty crammed), that’s a project value of $10.5 million. I believe A.G Spanos proposed Diplomat project (about an acre) will have a done-done value of $50 million give or take. If we believe the rumor of an $18.5 million price on Preston Place’s two acres, Provident would only have $2.5 million left for a full build out. Certainly to err is human.

Leading The Kitties To Water

This meeting city staff were more noticeable in their opinion on the path forward. Some found this off-putting, but I was thrilled. Without someone to help guide this process and capture decisions when made, this process would stumble on longer than a Law & Order franchise. As long as staff isn’t putting words in the committee’s mouths, I’m good with a little cat herding.

 

Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement. In 2016, 2017 and 2018, the National Association of Real Estate Editors recognized my writing with three Bronze (2016, 2017, 2018) and two Silver (2016, 2017) awards.  Have a story to tell or a marriage proposal to make?  Shoot me an email sharewithjon@candysdirt.com. Be sure to look for me on Facebook and Twitter. You won’t find me, but you’re welcome to look.

Steve Brown, Real Estate Editor
Dallas News

Dallas-Fort Worth tops the list of U.S. cities that real estate industry execs say will be the best for their business in 2019.

D-FW has been rated the highest for property investment and construction in a closely watched real estate beauty contest — the annual Emerging Trends in Real Estate report, which polled industry leaders on their outlook for 79 U.S. cities. The last time D-FW topped the list was in 2015, in the report looking ahead to 2016.

"I'm thrilled to see Dallas at the top of the list again," said Byron Carlock, national real estate leader with PriceWaterhouseCoopers, which, with the Urban Land Institute, sponsors the annual survey. "Dallas is doing a lot of things right.

"Dallas is one of the bright spots in our country," Carlock said. "We are watching Dallas lead the way among major cities pivoting to the new economy."

The recent strongest U.S. market for both job growth and population gains, D-FW is the top home and apartment building center in the country and a leader in demand for all kinds of commercial real estate. In just the first half of 2018, more than $11 billion in construction projects were started in North Texas. Only New York City had more total building.

Austin and San Antonio also placed among the Emerging Trends report's 20 favorite cities for investment and development in 2019. 

Seventeen of the 20 cities are considered "secondary" markets — as opposed to the big "gateway" locations such as New York, San Francisco and Washington, D.C., that are usually favored by investors.

Along with D-FW, the cities investors like most for next year include Raleigh-Durham, N.C.; Orlando, Fla.; Nashville; and Charlotte, N.C.

"More job growth is happening in those markets," said Urban Land Institute's global CEO, Ed Walter. "And the amount of investment [capital] that has flowed into the gateway markets has in a lot of cases created some imbalances."

Some of the biggest  issues in the real estate industry for next year.

Walter said Dallas-Fort Worth is a prime example of one of fast-growth, non-coastal metro areas.

"The five-year growth rate of Dallas for employment is more than double the national average," he said. "When you add up all the different ingredients, Dallas ends up ranking as the best market over the near term."

More than 2,300 property owners, lenders, brokers, investors, builders and other property professionals were polled for their outlook on the U.S. real estate market.

This is the 40th year that the Emerging Trends report has been published. Real estate execs were asked to rank their favorite property types for next year — industrial buildings, garden apartments and shopping center redevelopments. Chief industry worries for the coming year were also highlighted.

The top concerns for 2019 include:

*Rising interest rates, which are at the highest level in more than five years.
*Higher property insurance costs, because of climate change and expensive storms and fires, which are raising policy premiums.
*Immigration restrictions, which could cause "negative economic consequences and long-term weakening of our national growth potential" and lead to further labor shortages.
*The long real estate cycle, which means a future downturn is more likely. "The decline in real estate transaction volume seems to say that investors as a group are pulling back in the face of such concerns."

So far, there's no sign of oversupply in most of the country's cities, Walter said. "What's been different about this cycle compared to the others is that supply growth has generally been constrained."

PwC's Carlock said only a tiny percentage of the property professionals surveyed were negative about 2019.

"As you look at supply-demand characteristics and the disciplined approach to the market and the amount of equity going into deals, we have a fairly healthy industry," he said.

D-FW heads the list of the U.S. cities with the best property market prospects for next year, according to the Emerging Trends in Real Estate report.

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Steve Brown, Real Estate Editor
Dallas News

Homebuyers aren't the only ones who have been slammed with soaring prices in the last few years.

Dallas-area apartment residents have also endured several years of significant price increases.

But just as home-price growth in North Texas is slowing, increases in apartment rents are also starting to wane.

During the third quarter, the Dallas area's average apartment rents rose at only 1.3 percent from a year earlier, according to new data from Richardson-based RealPage. That's less than half the annual rent growth among the major U.S. cities surveyed by RealPage.

The slowdown in Dallas apartment rent increases isn't a surprise. With almost 28,000 new apartment units hitting the North Texas market this year, analysts are tracking a steady decline in percentage rent hikes.

"We are about to move into the period of seasonally slow apartment leasing that comes with the cold weather months," RealPage chief economist Greg Willett said in the report. "Demand will trail completions just ahead, making it tough for the rent-growth pace to gain additional traction."

Dallas was on RealPage lists of the major U.S. rental markets that saw the weakest apartment-rent growth in the third quarter.

The fastest growing apartment rents were in Las Vegas (up 6.6 percent year-over-year) and Orlando, Fla. (up 6.5 percent). Houston-area rents were 3.7 percent higher than in third quarter 2017, according to RealPage.

Overall, North Texas apartment rents are still up by more than a third since 2010.

The average Dallas-Fort Worth-area apartment rent is at a record of more than $1,100 a month.

Still, the rate of rent increases in the area is just a fraction of what it was a couple of years ago, when landlords were bumping up their prices by more than 5 percent a year.

With more than 35,000 units still under construction, D-FW is one of the country's top apartment-building markets. And only less than 5 percent of the local apartment market is vacant.

Net apartment leasing in the D-FW area totaled more than 8,500 units in the third quarter — the best quarterly performance in more than a year.

"There was a little bit of an upward shift in momentum than we have been seeing," Willett said. "We still have a whole lot under construction.

"If we hit a bump in the road in the economy, that makes it a challenging environment."

Even with lower rent increases, there's no sign developers are cutting back on apartment building in North Texas.

"You look at the building permit numbers and start the numbers and there is still no indication of that," Willett said.

Apartment rent increases nationwide are slowing.

Annual rent appreciation was unchanged in August for the first time in 12 years, according to a recent report by Zillow.

Zillow estimated that Dallas-area rents were actually down 0.3 percent in August from a year earlier.

"Slower rent growth means that renters may feel less urgency to buy," said Zillow Senior Economist Aaron Terrazas.

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Urban infill is attracting a lot of new people.

By Matt Goodman Published in FrontBurner September 25, 2018 12:13 pm

Back in May, the U.S. Census published new population data that highlighted a march back to the cities. Dallas and Fort Worth were beneficiaries of this trend, adding more residents than all but two other cities in the country. But the northern suburbs—namely Frisco and McKinney—were still growing at a quicker rate relative to their population.

This week, the Census released more nuanced data as part of its annual American Community Survey. You can explore all sorts of fun data right here. So you see the population jumps (which were actually higher than the Census previously reported), but we can also see things like education level, median household income, median home value, total housing units, vacancy rates, and so on and so forth.

Before we go further, these are one-year estimates, which carry the highest margin of error of all Census data. But it does paint a general picture. Dallas added 24,000 people between 2016 and 2017. That’s more than triple what we added between 2000 and 2010, and brings us to more than 150,000 new residents since 2010, when the last Census was taken. Median income jumped by almost $4,000, landing at $50,627. The median home value rose by more than $30,000, which now sits at $190,600. This spike occurred despite the fact that there are more housing units in 2017 as well as more vacancies than in 2016. So much for supply and demand.

“If you look at those things by themselves, when there is more supply than demand, costs should be going down. But that’s not what’s going on,” says urban planner Patrick Kennedy, who also is a DART board member and sometime D contributor. “Incomes are going up, education is going up, some inflation is happening in the housing market nationwide, and the international capital flows going to cities for housing investment … all of that happening is inflating urban housing prices all over the place.”

Plano actually lost about 1,000 people, while McKinney and Frisco both added another 9,000 and 14,000, respectively. Kennedy thinks that’s a clear result of land availability. Collin County is stretching farther north, and Plano doesn’t have the land to grow that its northern neighbors do. Instead, Plano has begun exploring infill projects like Legacy and building up its downtown

Dallas has about 43,000 fewer people in poverty than it had in 2015, enough to drop our total percentage four points, to 18.5 percent. That’s still well above the statewide rate of 14.7 percent, however. Median rent jumped to $1,024 in Dallas, up from $961.

“Those areas are pretty built out,” Kennedy says, referring to what have become the middle suburbs like Plano. “There are two moves happening. One is to urban places, back to the city. When people relocate from other places, usually they’re not expecting Plano to have some urbanism elements, which it does in downtown and Legacy, but I don’t think people generally expect that. When I first moved here, I wanted to get as close to downtown as possible. That’s what people think when they move to a place, or they move to Frisco or McKinney where their jobs are.”

About that infill: Kennedy pulled numbers from the Census’ Public Use Microdata Areas (PUMA for short), which is super Census jargon for geographically bounded regions that it chooses to analyze. It’s the smallest, and therefore most targeted, of all the geographies that the Census digs into. One of those includes downtown, Uptown, and a stretch of East Dallas that ends at Abrams. He found that 28 percent of the city’s population growth occurred on 4.5 percent of its land. Rent here is at $1,358, up from $1,222 in 2016.

These residents are also driving less, taking more public transit, and biking and walking more often. Public transit use jumped by 1,247 people within the PUMA, good enough for a 1.3 percent boost to 5.8 percent. Biking jumped from .47 percent to 1.29 percent, up 698 people. About 1,688 people are walking more, a jump from 3.76 percent to 5.61 percent. Kennedy says the numbers should encourage the city to reinvest in enhancing walkability and public transit.

“That’s the result we want out of urban infill, not having to use a car for every trip, and that’s really the only way to reduce vehicular use,” he says. “I think this is an impetus for us to be reinvesting and making more places where active transportation is useful and safe because demand is there.”

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