Mike Rawlings Is the Worst Thing That Ever Happened to Affordable Housing

One of the Khraish properties slated for closing and possible demolition.EXPAND
One of the Khraish properties slated for closing and possible demolition.
Jim Schutze

Mayor Mike Rawlings called a news conference at City Hall yesterday to take credit for a 14-day restraining order granted by District Judge Ken Molberg to stop the Khraish family and their firm, HMK, from evicting 300 tenants living in low-rent single-family homes in southern and West Dallas. More on the order in a minute. 

Meanwhile, you may think this is Rawlings sticking up for poor people, right? Please. Let me tell you something about Rawlings.

Rawlings is the single biggest destroyer of affordable housing in Dallas. At least the Khraish family earn their income by collecting rent and putting rooftops over the heads of 450 low-income families in this city. I can’t even count the thousands of poor and working families who have been denied affordable housing by Rawlings’ direct concerted actions as mayor.

No, I mean I literally can’t count it. Yesterday I was handed a multipage printout of the affordable housing units Rawlings helped squelch two years ago when he went to Washington and talked HUD Secretary Julian Castro into deep-sixing a four-year federal investigation of affordable housing fraud by Dallas City Hall.

Here we’ve got a mayor who has no trouble setting a truck accident lawyer (more on that later) on private business people to seize their property in a propaganda move, and behind his back he’s using official clout and his own connections to sink more affordable housing than the Khraish family ever dreamed of owning.

The list given to me by a confidential source is from a trove of City Hall emails generated about a year ago when Dallas Assistant City Manager Ryan Evans started asking Dallas Economic Development Director Karl Zavitkovsky how many affordable units have been created under federal, state and city laws requiring them as part of tax-subsidized deals.

From what I see in the inventory in this email exchange, City Hall was basically doing nothing at all to enforce its own affordable housing rules until 2010 when two real estate developers, Curtis Lockey and Craig MacKenzie, blew the whistle. Lockey and MacKenzie told the U.S. Department of Housing and Urban Development that Dallas had been gobbling down hundreds of millions in federal low-income housing money but using it illegally to build lofts downtown for rich white people.

The city’s reaction to Lockey and MacKenzie was to try to cover its trail by pumping some money into a couple of projects downtown built more or less specifically for poor people. Ah, but you see, that doesn’t quite work. You can’t just put up a couple of racially segregated poor-people towers, clap your hands and say howdy.

Here is where the mayor’s special handiwork in destroying affordable housing comes best into view. The city gives away hundreds of millions of dollars in property tax money every year in what are called Tax Increment Finance Districts, “TIFs” for short. It’s money that comes straight out of the city’s general fund, some of it from the school district and other tax-supported entities, and goes to developers as a subsidy.

The city now has 18 active and two “retired” TIFs spread all over town. The city’s ordinances for all but two of those TIFs require that any developer getting money from a TIF in Dallas must make either 10 percent or 20 percent of the units they build affordable or rent-controlled, depending on the TIF.

In fact, this rule for TIFs is the city’s only significant affordable housing program. Almost all of the locally supported affordable housing units that Rawlings and City Hall are ever going to provide for anybody must come from the TIF programs.

In its four-year probe of City Hall inspired by the Lockey and MacKenzie complaint, one of HUD’s major findings was that Dallas had been doing nothing – nothing – to enforce these rules. Had HUD proceeded with its enforcement process, the failure of the city to create affordable housing with TIF money was going to be a major issue.

Why is it the federal government’s business whether Dallas enforces its own local laws? Because money is fungible. If a city takes federal fair housing money, it is required to use that money to increase its stock of affordable integrated housing. It’s called “affirmatively furthering fair housing.”

If the city is taking HUD money with one hand and then using the other hand to reduce its stock of affordable housing by violating its own laws, then it’s making chumps of the feds. Or, should we say, bigger chumps?

That’s exactly what Lockey and MacKenzie accused Dallas of doing. It’s exactly what HUD investigators concluded Dallas had been doing after a four-year investigation. It’s exactly what Dallas was about to get its ass kicked for doing when Rawlings went to Washington to schmooze Castro, then the recently appointed HUD Secretary and former San Antonio mayor.

What would have happened, do you suppose, had Rawlings not gone to Washington and not succeeded in talking Castro into killing the investigation? I guess maybe lots of stuff, but here’s one thing for sure: Dallas would have started having to enforce those TIF rules on affordable housing. Ten to 20 percent of every residential project that took money from a TIF would have had to consist of affordable units, which, when you think of it, would have been kind of a revolution for Dallas.

Another of the 300 houses the Khraishes will close and possibly demolish if they are able to defeat the city's restraining order.EXPAND
Another of the 300 houses the Khraishes will close and possibly demolish if they are able to defeat the city's restraining order.
Jim Schutze

No, really. A revolution. A year ago I told you about the wild Armageddon-like campaign put on by Trammell Crow Co. to defeat a proposal that would have incentivized them – not required, just incentivized them – to include affordable housing units in a new development next to Klyde Warren Park.

The developers in this city don’t even want to be incentivized to include affordable units, let alone required, in spite of the fact that successful incentive programs are creating affordable housing in other cities all across the nation. It has just always been a thing with Dallas developers: any and all affordable housing is poison in their book, even though it’s not poison in New York or Chicago or San Francisco.

So imagine if Rawlings had not talked HUD Secretary Castro into killing the Lockey and MacKenzie enforcement program. We would have affordable units scattered all over the city.

What do we have now, thanks to Rawlings? The inventory I was given yesterday from the City Hall email stream – which I verified with other sources – is incomplete and a little hard to add up.

So I just counted one type of project. Some were big. Some were small. Some have been around for some years. Some are new. Some, I believe, are still under construction. In my special category that I was adding up, some are high-rise, some are low-rise, some are mid-rise. Some have elevators and some have stairs. Some are pink and some are blue. All were in TIF districts and got TIF money.

I counted 14,240 units in my category. Oh, and what was it about my big, small, high, low, pink, blue category that made it a category? Those are the TIF-money projects that have zero affordable housing units in them.

Zee. Ro!

At 20 percent, those projects should have had 2,848 affordable units in them. Shmushing family size and generalizing a bit, that should have been more or less enough to house the threatened Khraish tenants almost 10 times. At the lower rate of 10 percent per project, I still count 1,424 affordable units that should be there under the law but are not, thank you Mayor Mike.

Yesterday after I wrote about the Khraish family I heard from lots of people telling me that the Khraishes are crying wolf, that they make tons of money on their houses and could easily afford to fix them up if they wanted to.

OK.

I could ask some things about that. So, if they could still make a good return on their rental properties after fixing them up to the city's new standards, why are they evicting their rent-paying tenants and knocking down the houses? Are they nuts?

OK. Let's say they're nuts. They're not.

Khraish Khraish, the son, is a smart, decent and caring human being. I've never met the old man (I can use that term for obvious reasons). But OK. They are shutting down 300 rental properties because they're nuts.

Let me toss one more log onto this fire. No matter what anybody thinks of the Khraish family, they are sitting on properties in West Dallas that are in direct line of sight from the Calatrava Bridge, the whole Trinity Groves development and all of the fancy-schmancy new Roger Staubach apartments going up in that area. In other words, a forest fire of gentrification is shooting flames at their properties.

The mayor, with his own very public record of destruction of affordable housing, could say, “I don’t want you guys doing affordable, either, because I think you're nuts or bad or wicked or something.”

They could say OK. In fact, they have. They have said they’re out. Gone. Shutting down 300 units. Just going to sit on them and let that big blaze of gentrification come make them rich.

But that’s not good enough for the mayor. He wants their land. He is directing City Hall to marshal its vast bureaucratic resources against the Khraishes to seize control of their property. Why?

I believe the real game here is to get the Khraish property into somebody else’s hands. I've seen this show before with the Topletz family. I suspect the restraining order is a ploy to give the city attorney’s office time to ask a judge to put all of the Khraish property into a receivership – in other words seize it.

By the way, the TRO from Judge Molberg that the mayor was sort of touting as his own Bingo actually was the work of Michael Hindman, a truck accident lawyer trying, unsuccessfully so far, to gin up a class-action suit against the Khraishes. I have tried to reach Hindman, but he doesn't call back. This isn't the A Team, and this same tactic didn't work last time City Hall tried it against the Topletzes, but that's not exactly the point at this moment.

Here's the point. The mayor is telling this family:

No, you’re not allowed to go out of the rental business. You’re not allowed to hold this land until gentrification reaches it, and you’re not allowed to profit from that gentrification the way my buddies like Roger Staubach will.

We’re taking it. All of it. Seizing it.  


I don’t believe the mayor gives a rat’s ass about affordable housing for poor people, because I have seen him literally bragging about decimating the affordable housing reforms that would have come out of the Lockey and MacKenzie settlement if not for his own personal interference.

I don’t know if you remember David Jensen, the guy I was writing about a year ago who lived in a warehouse near Trinity Groves. The city literally ran a street through his house to help Staubach do a big project across the way from him.

That’s what this is. It’s rich white people using the lives of poor people of color as pawns, grabbing land for themselves the way they always have – like white traders giving smallpox blankets to the Native Americans – and then toasting themselves behind closed doors for their cleverness.

Oh, and then the last thing. They all believe in free enterprise and property rights. Sure. If you believe that one for a split-second and you’re in their way, you’ll wind up with a shiv in your back for sure..      


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