Adobe Stock/"videowerx66"

In Dallas vacant lots owned by people who were long delinquent on taxes risked having their property acquired and then sold to developers who were restricted to building houses for sale to low-income home buyers. That law was recently changed by the City Council allowing construction of rental housing and commercial development on the lots.

"Housing is the primary purpose, but the Texas land bank statute allows more than housing," David Noguera, the head of the city's housing department, told council members Wednesday. "So to the extent that the lot is located somewhere where it may be appropriate to have a commercial use, we have that flexibility."

All the council members did not agree on the change as there were concerns about too much commercial development being run through a program designed to add affordable homes in city where they are hard to come by. The law dictates the land bank must create housing stock for families making 115% or less of the area median income.

"I understand [businesses] make stronger neighborhoods, but I thought this was to provide housing," said Sandy Greyson, council member for Far North Dallas.The current land bank inventory sits at about 200 lots. On Wednesday, the council approved the use of $1.5 million in existing bond funds to buy more. The housing department will focus on buying lots in parts of the city named "reinvestment strategy areas" in the housing policy approved this spring. These neighborhoods include Vickery Meadow, The Bottom and Pleasant Grove, among several others.

Before the city approves the sales, developers must submit a proposal stating what they wish to build, and at what price range. State law requires that a majority of the lots developed for home sales must go to families making 80 percent or less of the area median income.Proposals must go before the council for approval before the city can transfer a lot to a home builder. That requirement will also apply to developers of commercial properties, so the council will have control over what gets built.

Read More