Tackling a Need for Workforce Housing at the Local Level

Developers, construction firms and government programs are working to fill in the Dallas area’s “missing middle.”

The development of workforce housing projects that offer the right blend of size, amenities and affordability is a challenging yet important opportunity for developers.

In the United States, cities large and small continue to struggle with a long-standing housing affordability crisis inclusive of workforce housing for middle-income households that don’t qualify for subsidized housing but still struggle to afford market-rate housing. Often referred to as “the missing middle,” workforce housing typically provides options for households earning between 60% and 140% of the area median income (AMI). This includes teachers, nurses, police officers and others who want to live in the communities where they work.

From the 1940s to the 1990s, housing was relatively affordable for many middle-income workers, as wages were correlated with costs of living, and the emergence of the 30-year mortgage made homeownership more accessible. But a major recession, a global pandemic, record-high inflation and other factors have since put homeownership out of reach for many people.

U.S. home prices have risen 60% nationwide since 2019, with the median existing single-family home price reaching $412,500 in 2024, or about five times the median household income, according to a study by the Harvard Joint Center for Housing Studies. Consequently, the national homeownership rate fell to 65.6% in 2024, marking the first decline in eight years, and dropped further to 65.1% in early 2025. The study also noted that the declining number of homebuyers influenced the renter population to increase by 848,000 in 2024. That same year, multifamily developers completed 608,000 new units, the most in nearly four decades, but while the number of higher-rent units has increased dramatically, the number of lower-rent units has fallen substantially. These trends underscore the urgency for affordable workforce housing.

Addressing Housing in the Dallas Metro Area

Despite boasting one of the strongest economies among all states, Texas has one of the worst housing shortages in the country. The Lone Star State needs 306,000 more homes than it currently has, according to a recent analysis by Up for Growth, a nonprofit that focuses on housing policy. In addition, a 2024 study by the Texas Demographic Center projects the state to gain as many as 5 million new people by 2036. Influencing factors include high levels of domestic and international migration, robust job creation in major metro areas, a relatively young population that contributes to higher birth rates, and economic opportunities and lower cost of living.

The closer one lives to downtown Dallas, the higher the cost of housing. To meet demand, the Dallas area is largely reliant on the construction of single-family homes and multifamily dwellings on undeveloped land far away from the city core, often requiring hour-plus commutes. This is far from an ideal solution for many workers. When residents cannot find housing to fit their needs, businesses suffer because they struggle to recruit and retain workers.

The city of Dallas has implemented several initiatives to address the need for more affordable housing, including:

Dallas Housing Opportunity Fund (DHOF): In partnership with the federal Community Development Finance Institutions Fund, DHOF supports affordable and workforce housing development. The partnership, launched in September 2022, is expected to create or preserve at least 1,500 housing units throughout Dallas by the end of 2031. As of late 2024, DHOF had supported nearly 500 units of affordable housing.

Dallas Housing Finance Corporation (DHFC): This program, launched in 1984, provides financial assistance for mixed-income workforce housing developments through tax credits and incentives. Developments facilitated by DHFC financing provide housing for individuals and families earning 60% or below of area median family income. For fiscal year 2023-2024, the agency reported the facilitation of development of 1,652 multifamily housing units, of which 1,188 units (72%) were reserved for households earning 31%-50% of the AMI.

Dallas Public Facility Corporation (DPFC): Established in 2020, DPFC encourages the development of workforce housing communities by offering tax exemptions and financing options. In general, it seeks to develop and preserve mixed-income workforce housing communities to serve residents earning at or below 80% of the AMI and provide non-income-restricted units.

Dallas Housing Acquisition and Development Corporation (DHADC) Urban Land Bank Program: The DHADC, established in 2004, administers a program in which tax-foreclosed vacant properties are acquired and sold to developers for construction of affordable housing.

Numerous redevelopment projects in Dallas have included the repurposing of old office space into housing. According to RentCafe, Dallas ranks fifth in the nation for the size of its office-to-residential conversion pipeline, having more than 2,720 apartments converted from office spaces on the horizon. Some projects will include workforce housing. As an example, the City Council recently approved the acquisition of a 10-story office tower that will be owned by the DPFC and converted by High Street Residential into a 399-unit apartment complex that will include 160 below-market-rate housing units. 

Here are a few of the other completed or ongoing projects in the Dallas area:

The Marcus Affordable and Workforce Housing Project: This initiative is bringing 76 new apartments to South Dallas, with 51% of the units rent-restricted to households earning 60% to 80% of the AMI. The project is supported by a DPFC tax exemption agreement with the city.

The Walton at Loop 12: Located almost 10 miles from downtown Dallas, Moss Construction is building this multifamily community by LDG Development that will bring 300 new affordable apartment homes to families earning up to 70% of the AMI.

Jefferson Terry: This new multifamily project under development in McKinney, a suburb about 33 miles north of downtown Dallas, will consist of 393 rental units. Development and construction company JPI, in partnership with the McKinney Housing Authority, is spearheading the project. According to city documents, at least half of the residences will be reserved for households earning less than 80% of the AMI, with 5% set aside for households earning less than 30%.

The Starling in Princeton: NRP Group LLC developed an apartment complex in the suburb of Princeton, about 44 miles north of downtown Dallas, as part of a mixed-use project. The Starling is a workforce housing project, with half of the units reserved for people making at or below 80% of the AMI.

Construction Companies Are Making a Difference

To help stimulate development, construction companies are increasingly involved in providing or facilitating workforce housing. Moss Construction’s experience in this space has enabled the company to devise best practices to help developers lower costs and find timeline efficiencies.

Best practices for workforce housing construction include leveraging innovative techniques and technologies. Prefabrication and modular construction, whereby some components are built off-site in controlled environments, can be done in parallel to other on-site activities and are largely unaffected by on-site weather delays. Design standardization such as repeating unit layouts, structural systems and finishes across floors or buildings shortens design time, allows bulk purchasing of materials, reduces construction complexities, and speeds up permitting and inspections.

Integrated Project Delivery empowers early and continuous collaboration between architects, engineers, contractors and owners, which translates into reduced change orders and rework. Moss has found that early involvement in a project promotes working hand in hand with design partners and consultants to uncover constructability challenges before they impact the budget or schedule. Robust construction management software helps streamline planning, scheduling and communications, resulting in fewer errors and improved overall efficiencies.

Lean construction practices, a project management philosophy derived from lean manufacturing principles, can eliminate waste and optimize workflows. Typical problems on a site can include materials arriving too early and sitting unused, crews waiting for others to finish before they can do their tasks, and last-minute design changes that torpedo schedules. Lean construction addresses these types of issues by streamlining workflows, improving communication and aligning all team members around the most important goal: delivering value to the client. 

Aaron Docsa is senior vice president at Moss Construction.

Case Study: Cypress Creek Apartment Homes In July 2024, Moss Construction broke ground on a 168-unit mixed-income community located 13 miles from downtown Dallas. Cypress Creek Apartment Homes will offer 116 units designated for residents earning up to 30%, 60%, 70% and 80% of the area median income (AMI). Of these, nine units will be allocated for people with disabilities, and four units will be available for unhoused individuals. The remaining 52 units will be market rate. Completion of the project is anticipated by the second quarter of 2026. The development is a joint venture of Hunt Capital Partners, Bonner Carrington and Sycamore Strategies. Total financing of $86.3 million included: Funding of $20 million in federal 9% Low-Income Housing Tax Credit financing, awarded by the Texas Department of Housing and Community Affairs and syndicated by Hunt Capital Partners. $32.5 million in construction financing and $22.1 million in permanent financing issued by East West Bank. An $11.7 million soft loan by the city of Dallas. Funds from the Department of Housing and Urban Development’s Community Development Block Grant Disaster Relief Program. Additionally, 41 of the homes at the 30% of AMI level will utilize vouchers from the Walker Settlement Voucher (WSV) program, administered by the Dallas Housing Authority. The WSV program, designed to address historical housing discrimination in Dallas, offers opportunities to African American households to move into areas with reduced poverty rates. Cypress Creek will offer one- to three-bedroom floor plans averaging 851 square feet. Apartment units will feature balcony and patio spaces, water-efficient plumbing fixtures, washer/dryer connections and Energy Star appliances. The complex will provide residents with a business center, clubhouse, swimming pool and gym. Apartment Life, a faith-based, nonprofit organization, will provide free community services, including social events, exercise classes, health fairs, food banks and tax preparation assistance. “Building diverse communities through quality housing solutions is not just about providing shelter; it’s about creating opportunities for connection and growth. Cypress Creek Apartment Homes will welcome residents of various income levels and offer an inclusive community where they can prosper in a high-opportunity area,” said Omar Chaudhry, senior director of acquisitions at Hunt Capital Partners.

• Magazine Article
• Development/Ownership
• Multifamily Property
• Affordable Housing
• Redevelopment