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In 2017, Khraish Khraish of HMK Ltd., a major West Dallas landlord company, explained to longtime tenants that he would be selling many of his rental properties to the tenants.EXPAND
In 2017, Khraish Khraish of HMK Ltd., a major West Dallas landlord company, explained to longtime tenants that he would be selling many of his rental properties to the tenants.
Jim Schutze

Is City Hall Improving Housing for the Poor or Just Getting Rid of It?

A lawsuit, really a collection of lawsuits, has been creeping along through the local courts for years like the plot of Charles Dickens’ mid-19th-century novel, Bleak House, pitting Dallas against some members of the Topletz family, who are landlords in southern Dallas. But there is a new wrinkle in the filings, and it has me wondering about the larger questions of poverty, affordable housing and social equity that we hear kicked around a lot in national and local politics these days.

The city has sued the Topletzes and the Topletzes have sued the city so often in this long conflict that the entire entanglement begins at some point to take on the aspect of the mythical ouroboros, the snake that swallows its own tail. The recent filing just a couple of weeks ago, however, at least gives it some new definition.

In this new pleading, the Topletzes argue that the city has attempted to criminalize the business of providing private-sector housing for the poor. In so doing, they claim, the city deprives honest business people of important constitutional rights. If you don’t mind, I’m going to skip over the constitutional stuff as maybe being a tad over my head, even though I am absolutely in favor of the Constitution and think it’s a great thing that we should keep as long as possible.

In several years of writing about and reporting on both landlord issues and the crisis of affordable housing in Dallas, I do find myself wondering sometimes what the city really and truly wants to accomplish in its approach to housing. In January 2017, a city ordinance called Chapter 27 went into effect regulating landlords, with a stated aim of improving living conditions at the low end of the rental scale.

Chapter 27 includes harsh penalties, some criminal, as well as some fairly onerous registration and record-keeping requirements. On its face, all of that should make sense; obviously the city would do poor and working class people a good turn if it could enact a law that would provide them with better housing. But there’s an assumption buried in there that we ought to pluck out and look at carefully before we just trot on by. And that is that landlords who provide what the rest of us might consider rundown housing at the bottom end of the rent scale do so because the landlords are malicious and have a criminal intent to defraud their tenants.

Do we know that? How much do you and I know about being a landlord who rents to the poor? How much do we understand about the realities of that business? Of course, no matter what those realities may be, there has always been a certain bottom line in state and local law, expressed mainly through municipal health and building code enforcement. But Chapter 27 came about because of a feeling among some at City Hall that the codes just were not getting the job done.

If anything, the serious major landlords operating at the low end of the rent scale have tended to be very serious about not getting themselves crosswise with code enforcement. When the city went after West Dallas landlord Khraish Khraish a couple of years ago, it took him to court as a problem slumlord. But when it got to court, the city was the one with the problem. Khraish turned out to have an impeccable record on code violations. Before Chapter 27, the Topletzes had a similar history of beating the city in court every time for the same reasons.

The old code before Chapter 27 had a certain leeway built into it for atonement through correction. A first ticket from the city was a notice that some part of a property was in violation. The owner was given time to get it fixed. An actual violation only occurred when an owner failed to correct a deficiency. Most of the big landlords have flying crews who do just that — play whack-a-mole with building repairs a jump ahead of the inspection process. On the one hand, the law is served when things get fixed. On the other hand, city employees may feel they are being cheated out of their pound of flesh. The landlords go on making money, and the buildings go on being crappy.

Chapter 27 twists the knot tighter. It makes a deficiency into a violation the first time the inspectors find it. There is still some provision for a grace period and repair, but less. The real danger for the landlord is that Chapter 27 assesses criminal responsibility on a landlord who “either personally or through an employee or agent allows the violation to exist.” So all of a sudden, that cracked sewage pipe under one of the several hundred houses that the landlord owns can begin to look like some time in the slammer for him.

I know, I know, why doesn’t he just get in his damn BMW and get out there and fix the sewer pipe for the poor people? I agree. But in agreeing with each other about that, we are assuming that the pipe does not get fixed because the landlord is a greedy rat. What if we are wrong? What if the landlord is actually operating in a tough business in a tougher environment, making a conscionable profit and doing the best he can to keep up his properties? What happens then, if we threaten jail time for broken pipes?

I think what happens is what has been happening since passage of Chapter 27, which is massive defection from the low-end landlord business. Both the Topletzes and Khraish have been selling off their single-family rental homes as fast as they can, often to their longtime tenants, because the downside of staying in the low-end landlord business is just too great. It’s not an easy thing to get any of them to talk about, I guess because it’s all about money and proprietary interests, but that’s why this new filing in the Bleak House litigation is so interesting. In it, we finally do hear the landlords speak, and even in attorney John Carney’s elegant lawyerly phrasing a certain shriek comes through.

Attorney John Carney, representing the Topletz interests, is arguing in a lawsuit that the city's new code for rental properties is unconstitutional.
Attorney John Carney, representing the Topletz interests, is arguing in a lawsuit that the city's new code for rental properties is unconstitutional.
Mark Graham

“The City's inconsistent interpretation and application of Chapter 27's minimum property standards results in erratic and ineffective communications with and inequitable fines and penalties imposed upon property owners in violation of their Fifth and Fourteenth Amendments rights to due process and equal protection.”

And that’s just Carney tuning up his pipes, all of which brings me back to my original question: What does the city really want? If the city truly wants to create more affordable housing in the private sector, why would it crack the whip in ways that can only cause private landlords to flee the business? Or is that what the city really wants? Is City Hall really just expressing a distaste for low-end housing? Is the real game, perhaps not even consciously acknowledged by the players themselves, to just make the housing and its occupants disappear?

In the ongoing mayor’s race, the only candidate I have heard speak directly to this question is council member Scott Griggs. He has been saying consistently that Chapter 27 needs to be reformed so that the city is working with landlords, not against them. Rather than running them out of town, the idea would be to harness city resources and policies to help landlords at the low end keep up their properties, make a decent profit and provide good, safe, healthy housing.

If what you want is more and better affordable housing, and if you do not believe all affordable housing must be government-owned, then it seems reasonable to want to help the people who provide private-sector affordable housing stay in business and do a better job. If what you really want is for the landlords, their houses and especially their tenants to disappear from the face of the earth, that’s easy. Tell them if you catch them with a broken sewer pipe you’re going to put them in jail. I’d get out of Dodge. Wouldn’t you?

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