Khraish KhraishEXPAND
Khraish Khraish
Jim Schutze

Mayor and Cheap Housing Opponents Play Catholic Charities for Fool

Nothing could be more plain. The blame for the city’s dearth of low-income housing — expressed politically, in policy, in voting and in what people say on the record — lies squarely with City Hall. Every major action with bearing on this issue taken by the current mayor, the City Council and top city staff has been to thwart efforts to provide low-income housing.

But City Hall, often with help from people who should just know better, constantly works to put the blame for the lack of it on the few people who actually do provide low-income housing — private sector landlords who rent to families at very low rents. It’s all their fault.

That’s quite a trick.

With refreshing candor and no trickiness at all that I could discern, Dallas City Councilman Lee Kleinman gave a great explanation right here in the Dallas Observer the other day of the way many people in positions of responsibility in Dallas feel about low-income housing:

“One thing in housing that people don’t think about is in this city a single-family home needs to be worth about $225,000 to about $250,000 to generate enough tax revenue to pay for the services that that family will be using in the city,” Kleinman told Observer Editor Joe Pappalardo.

“When we build houses that are less than that, we’ve made a policy decision that we’re going to subsidize the people that are living there. I’m not saying that’s a bad policy decision, but we should be conscious of that policy decision.”

Kleinman told the truth: A majority of Dallas’ establishment leadership looks on low-income housing as a net negative. Nothing could be more obvious from the way the leadership has approached the issue.

The single most important action anybody has taken at City Hall in recent years to stave off expansion of low-income housing in Dallas was the political deal struck two and a half years ago by Mayor Mike Rawlings with former U.S. Secretary of Housing and Urban Development Julian Castro. Castro agreed to water down strictures HUD lawyers had intended to impose on Dallas for violating federal low-income housing law and promoting racial segregation over a 10-year period.

A key condition HUD had intended to impose on Dallas was an end to discrimination against holders of federal rent subsidy vouchers. At any given point in time, landlords in Dallas are refusing to rent to more than 1,000 holders of these vouchers who meet every other of landlords’ requirements.

Rent would be paid in full; the applicant has no criminal record; the applicant is employed and has references. But thousands of voucher-holders, some of whom have waited years to get a voucher, must surrender their vouchers after a set period because they have been unable to find decent or safe places to live that will accept the vouchers.

The original HUD provision — the product of a five-year federal investigation of low-income housing in Dallas — would have required Dallas to make it illegal for landlords to discriminate on the basis of source of income. If you paid with a voucher, that would be your business, as long as you met all of the other requirements to rent.

Under Rawlings’ side-deal with Castro, all Dallas had to do was think about such a measure. It did. And when the measure barring source-of-income discrimination came before the council, Rawlings and Kleinman voted against it. There has been no more important, emblematic or red-letter indication of how city leaders really feel about low-income housing than that single vote. They offered transparent legalistic rationalizations at the time, but it was clear that they regard low-income housing as a bad investment. That’s an unsurprising opinion, given the source.

What is surprising and troubling, however, is the extent to which people who should know better in this city aid and abet the leadership, especially the mayor, in his efforts to misdirect public sympathy by making scapegoats of low-rent landlords.

Two family-owned companies in particular, Topletz Properties and HMK Ltd., controlling more than 1,000 single-family rental properties between them, have been the folklorical bête noire whipping boys of the left for years, in spite of charging very low rents and having very few building or health and safety code violations on their records.

In what I can only comprehend as a masterstroke of cynicism, the mayor and his cadre have succeeded in recruiting to their cause entities like Catholic Charities of Texas, the Texas Tenants Union and the Texas Organizing Project. The one sturdy voice of sanity and clarity in all this, thank goodness, has been Habitat for Humanity, which has steadfastly refused to join the other dupes in the mayor’s phony war against the landlords.

Led by Khraish Khraish, who runs HMK with his father, the landlords last December challenged Rawlings by presenting him with their own detailed plan for providing more and better low-income housing in the city. A key point in their plan was the recognition that their own main product — the small aging single-family home — is an inefficient vehicle for low-income family housing that can measure up to the new tougher standards the City Council has adopted for rental properties.

Some houses, capable of being brought up to the new code requirements and of carrying a mortgage, will be sold to tenants.EXPAND
Some houses, capable of being brought up to the new code requirements and of carrying a mortgage, will be sold to tenants.
Jim Schutze

In their plan, the landlords revealed they have been dealing with Habitat for Humanity for some time, selling land on which Habitat will build new low-income homes — but not at the $250- to $450-a-month rate the Khraishes were renting their smallest properties. Habitat will build houses for credit-worthy buyers who can afford a mortgage payment at some multiple of that amount.

Meanwhile the Topletzes and Khraishes are selling some of their larger and better homes to tenants who will be able to keep them up and make the mortgage payments, which the landlords are financing. But those are houses that meet code and are in good enough shape to be carried as equity on a 10-year note. The landlords also have offered to build new multi-family housing.

Apparently taking their offer as an affront, the mayor and city officials have responded by suing the landlords over some 200 properties the landlords say cannot be brought up to code and must be taken off the rental market.

Here, in this city where people like the mayor and his cadre on the council profess belief in free enterprise, Dallas City Hall is engaged in an effort to make these landlords do what the city tells them to do with their own private property or see their property seized by a court.

Stepping in to help the mayor in that effort has been Catholic Charities of Dallas, which offered recently to survey the tenants of HMK with a list of questions drawn up by the city attorney. A spokesperson for Catholic Charities told me it has already carried out the survey using the city’s questionnaire.

But just before Catholic Charities used church property and church-sponsored events to promulgate the survey, a number of questions were hurriedly stricken from the questionnaire: They were taken off after an attorney for the landlords pointed out that the questions were legally invasive, were aimed at bolstering the litigation against the landlords and would violate a standing court order calling for a truce between the parties.

I have looked at a lot of back-and-forth communication between HMK and city lawyers. HMK's premise was that the city was using Catholic Charities as a beard to gather information for the city's litigation against HMK. Ultimately the city agreed to strike some portions of the questionnaire.

I asked Catholic Charities of Dallas CEO David Woodyard if his organization had not been suckered by City Hall. He said he wasn't aware of the legal controversy around the questionnaire.

"That’s actually an incorrect premise," Woodyard told me.  "I’m not sure where you got any of that.

"To this day I have not paid any attention to the legal proceedings. The city literally called us and said, ‘Look, we would love to have the help of an impartial trusted party in the community to help us with this problem.' I wouldn’t view it at all as ‘suckered in’ or anything like that. I was not aware of anything in the background at all from a legal perspective."

Too bad.

In the meantime, an alliance of tenant advocates staged a media event last week in which they marched on the offices of HMK and presented their own alternative plan to meet the needs of HMK’s tenants. Several basic elements of their eight-point plan were right on the money reflecting the experience and knowledge of the advocates, some of whom have been working this vineyard for a long time.

They suggested, for example, that the city should take some sliver of the vast funds it happily shovels to gentrifying developers all the time and use the money instead to subsidize first-time home-buyers, protect longtime owners from displacement by taxation and provide relocation assistance for those people who must move.

What struck me about the event was the optics — as if the guy who needed to have these demands hung around his neck was Khraish instead of Mayor Rawlings. Khraish told me, “The whole press conference and coming to my office, that was an ambush. Nobody alerted me to that. What was the purpose of that? Are they trying to catch me with my pants down? I don’t understand that.”

When I spoke about it later with Sandy Rollins, director of the Texas Tenants Union and an organizer of the event, she said, “I don’t trust Khraish.” Her demand is that Khraish either keep his properties on the rental market and bring them up to code or sell them to tenants, who, she says, should not be required to bring them up to code for some period. Because she doesn’t trust Khraish, she doesn’t want HMK to participate in the financing of sales.

Bill Hall, director of Habitat, has said publicly the properties Khraish wants to stop renting are simply no longer capable of being legally inhabited under the city’s new rules.

Rollins also described Khraish as having a policy of never repairing his property. The man from whom the Khraish family purchased the properties 14 years ago did have a reputation for never repairing any of them, but the Khraishes say they have invested millions of dollars in repairs and maintain a full-time repair crew, which they say explains their very small number of code violations.

Rollins has a solid reputation for integrity over many years, and I know that her own efforts and the efforts of those around her are well intended. But I also do think they and Catholic Charities have been suckers in this — pawns, fools. They are being exploited by the city to the great detriment of the interests of the poor.

Anybody who wants to argue that the two landlord companies in this picture are the real low-income housing villains in this city needs to come up with the evidence. All of the objective evidence I see goes against that case.

Meanwhile the evidence is clear that the mayor and his friends on the council have done everything in their power and then some to defeat low-income housing. It’s on file at City Hall. It’s on tape. It’s online. It’s in the Observer.

In the end, it doesn’t matter if the mayor says it, if city lawyers say it, if tenant advocates say it: No one in this nation has the right to tell these landlords that they must keep renting their own properties if they choose not to. No one in this nation can deem an enterprise viable if the people who own the enterprise say it is not.

The mayor knows that. He knows exactly what he’s doing — working to defeat low-income housing while misdirecting public attention toward scapegoats whom he very mistakenly takes as defenseless. It’s too bad the tenant advocates and Catholic Charities don’t have at least that much figured out by now.

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