Dallas city leaders unveiled a significant step in the city’s evolving response to homelessness during a District 7 Community Listening Session, signaling plans for a transitional “pallet neighborhood” that could become one of Dallas’ newest tools for addressing chronic homelessness.
While the meeting covered topics ranging from mental health resources to housing policy, one announcement stood above the rest.
James Armstrong III, deputy director of the City of Dallas Office of Housing and Community Empowerment, and District 7 Council Member Adam Bazaldua revealed the city is moving forward with plans to establish approximately 75 transitional pallet homes on underutilized TxDOT property near Interstate 310 in South Dallas.
The project, still in its planning stages, would provide temporary housing coupled with wraparound services designed to help residents transition into permanent housing.
“We have to diversify what housing looks like… we have populations that aren’t always ready for the traditional shelter model.” – District 7 Council Member Adam Bazaldua
Unlike emergency shelters, Armstrong described the pallet neighborhood as transitional housing where residents could receive behavioral health care, addiction treatment, case management and employment assistance while working toward permanent stability.
A new lense on homelessness
Armstrong explained that Dallas is shifting away from viewing homelessness strictly as a housing issue.
Since October 2025, the city has combined four departments—including Housing, Homeless Solutions, Community Care and Equity—into the newly formed Office of Housing and Community Empowerment. With a budget of $10 million, to be distributed with the local nonprofit organizations that are the service mechanisms for the Housing and Homelessness department.
The goal, Armstrong said, is to create a more coordinated system where housing is paired with services that address the root causes of homelessness.
“Housing is more than just bricks and sticks… It’s about creating opportunity.” – James Armstrong III
Armstrong is a native of West Dallas and the former CEO of Builders of Hope, a nonprofit focused on housing, economic mobility, and neighborhood investment. The role provided extensive experience working with residents and community stakeholders throughout Western and Southern Dallas. The department is also drafting Dallas is Home, a new citywide housing policy expected to go before the Dallas City Council later this year. The policy will guide future investments in affordable housing, neighborhood preservation, fair housing and homelessness strategies.
District 7 remains a priority
Officials acknowledged that District 7 continues to experience one of the highest concentrations of unsheltered residents in Dallas. Bazaldua said that reality requires more investment—not less.
“There is never an easy conversation about bringing homeless resources into a neighborhood,” he said. “But if we’re serious about solving this issue, every part of the city has to be willing to participate.”
Rather than concentrating services primarily in downtown Dallas, city leaders said future investments must be distributed throughout Dallas so residents can access help closer to where they are.
The proposed pallet neighborhood reflects what officials described as a broader shift in strategy. Instead of simply relocating encampments, the city hopes to create a pipeline that moves individuals from the streets into transitional housing, behavioral health treatment and ultimately permanent housing. also highlighted plans for a centralized intake center at Austin Street Center that will include new behavioral health beds and expanded assessment services.
“Our goal isn’t just to move people,” one city official said during the meeting. “It’s to connect them with the services they need to remain housed.”
Residents welcomed the discussion but also challenged city leaders on implementation. Questions centered on repeated community surveys, long-term accountability and ensuring the city’s plans survive beyond individual elected officials.
Others stressed that South Dallas has participated in planning efforts for years and wants to see visible results.
Bazaldua acknowledged the urgency.
“We’ve laid the foundation,” he said. “Now it’s about implementation.”
As Dallas prepares its next budget and finalizes its new housing policy, the proposed pallet neighborhood may become one of the city’s most closely watched efforts to determine whether transitional housing can help reduce homelessness while providing residents with the comprehensive support needed for long-term success.
