City Wants to Give One Landlord a Sweetheart Deal, Makes Others Mad

John Carney and clients in front of the George L. Allen Sr. Courts Building.EXPAND
John Carney and clients in front of the George L. Allen Sr. Courts Building.
Jim Schutze
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Put yourself in John Carney’s shoes. He’s got to wonder if he and his clients have some special thundercloud or mark following them around.

Two years ago the mayor of Dallas named and listed several of Carney’s clients as “high impact landlords” whom the mayor was targeting in a special get-tough enforcement policy. In case anybody wondered what “high impact” meant, Channel 8 WFAA, in reporting on the mayor’s initiative, called them “junk landlords.”

The get-tough policy, the mayor said, was based on a recent get-tough law passed by the Dallas City Council, called “Chapter 27.” Basically it was a zero-tolerance policy for properties with building code violations and high crime rates.

In announcing it, the mayor was especially tough on two Carney clients, Topletz Investments and HMK Ltd. A public statement from the mayor said the City Attorney’s Office, eager to back up the mayor’s initiative, had already filed suit against Topletz:

“Allegations in the lawsuit are so serious,” the statement said, “that the city will be asking the court to appoint a receiver to manage all their properties until the condition of the properties and Topletz’s management practices are fully in compliance with the law.”

Not to rehash the last two years of public battle over the mayor’s anti-landlord initiative, but the fact is that most of the city’s legal actions against Carney’s clients either have already died in court or are in some stage of slowly melting away. The city never took over any properties.

A blizzard of code citations accompanying the city’s lawsuits all were tossed out by judges as phony. Meanwhile two of his clients emerged as public heroes for agreeing to sell many of their properties to longtime tenants.

That doesn’t mean the hatchet was ever buried. Private litigation by two legal aid groups still hangs over HMK, owned by Khraish Khraish. The city has never signaled an end to its courthouse crackdown efforts against Topletz. Supposedly still driving the crackdown policy at City Hall is that 2016 Chapter 27 zero-tolerance policy.

Imagine Carney’s surprise last week, then, when he learned that Dallas City Manager T.C. Broadnax has been negotiating a relaxed cooperative approach to both building code enforcement and even law enforcement with one of the city’s largest low-rent landlords, the Dallas Housing Authority. Under the proposed plan, which sounds nothing like Chapter 27, code inspectors and even cops would stand off, deferring to some degree to private security and other “third-party” building inspectors.

DHA is a stand-alone agency funded with federal money. The mayor of Dallas appoints DHA’s five-member board of commissioners, but the agency is not a department of city government.

Carney’s main argument against the city for two years, in and out of court, has been that the mayor’s so-called high impact landlord list was a case of illegal selective enforcement. “The hardest thing to prove in selective enforcement is intent,” he told me the other day.

“How do you show they’re targeting you on purpose? But here we have the mayor naming us in the media as his targets.”

And now all of a sudden, he said, city officials reveal their plans to cut a very permissive deal with a major landlord who happens to be related to them — DHA. He didn’t say this in so many words, but from his tone I got the impression Carney was viewing the appearance of the memorandum of understanding with DHA like legal manna from heaven.

The memorandum suggests that DHA should be allowed in some cases to substitute the annual federal inspections its properties must pass for the Dallas code enforcement inspections that all landlords must pass. In other words, the burden of local inspections would be reduced by some measure to reflect the federal inspections, assuming those earned passing grades.

Primary law enforcement responsibilities at DHA properties would be turned over to private security, which would even run drug dogs and surveillance in the properties. A major benefit to DHA could be the curtailing of calls to city police. Police calls are used as triggers for expensive sanctions brought against private landlords by the city.

I spoke yesterday with Broadnax and Assistant City Manager Jon Fortune, who is over the portion of city government that includes code enforcement. Both insisted that the new proposed relationship with DHA is designed to get more compliance, not less.

“We’re not giving up our rights to drop the hammer should there not be productive conversations about getting things fixed,” Broadnax said, “and we are not taking a back seat to life safety issues with this program, or our cooperation and coordination.”

He conceded that some City Council members have come to him already with exactly that misgiving. “Initially,” he said, “when I was having conversations with council members, they believed it [the new policy] was a carve-out and some kind of relief of expectations with DHA. I truly believe just the opposite.”

Broadnax paints the new policy as a version of catching more flies with honey than with vinegar: “I believe, just as I have done in every other community I have been in, quite honestly, that we need to learn how to work better with our partner organizations on the federal level and or county or even state.

“Any opportunities we’ve got to improve the relationship to get more from each other and not lower the standard and only enhance it, I think it’s better for the citizens.”

In a two-year battle between Dallas Mayor Mike Rawlings, left, and West Dallas landlord Khraish Khraish, right, Khraish came out as a possible future candidate for mayor.
In a two-year battle between Dallas Mayor Mike Rawlings, left, and West Dallas landlord Khraish Khraish, right, Khraish came out as a possible future candidate for mayor.
Jim Schutze

Of course, Broadnax’s list of partners — “the federal level and or county or even state” — doesn’t happen to include Topletz Investments or HMK Ltd. That makes Carney think DHA is a new kind of target landlord for the city — a target for a break.

In an angry email last week to both city officials and investigators with the U.S. Department of Housing and Urban Development, Carney wrote, “I guess we know who the new Target Slumlord is. Only instead of enforcement they get a pass.”

In another email to the City Attorney’s Office, Carney said, “DHA, the largest slumlord in Dallas, is given a waiver from the Chapter 27 code compliance reporting and inspection? I respectfully request you dismiss all allegations against Topletz [in] municipal and district courts.”

Carney went to work immediately researching the legal basis for allowing HUD inspections to substitute in any way or degree for local code enforcement. He thinks the idea flies in the face of HUD’s own legal structure and policies:

“The whole regimen in HUD is not to nationalize a minimum standard in housing, because that would be different everywhere. HUD basically abrogates that back to the local regimen.”

Carney makes one point that seems hard to rebut. Whatever the intent or eventual effect of the city’s proposed new relationship with DHA, it flies in the face of the mayor’s initiative. It also seems to take a tack quite at odds with the City Council’s get-tough attitude in passing Chapter 27.

But if that’s all true, what would be wrong with it? Chapter 27 caused the worst eviction crisis in memory in West Dallas. Together with the mayor’s abortive crackdown — mainly a dragged-out photo op — it was all a debacle of unintended consequences and lack of foresight.

Then there is this: No one was more adept or effective in defeating Chapter 27 and outmaneuvering the mayor than Carney and his clients, especially Khraish. If Khraish didn’t live in such a tony neighborhood, he’d probably be a candidate for City Council by now, and it’s not inconceivable he could wind up running for mayor one day. And Carney, in a two-year boxing match with all the power and glory of the city, never lost a single round.

But I get what Carney’s talking about. I understand why he’s angry anyway. It’s that thing I said at the top about walking in his shoes.

From the very beginning, there was never anything wrong with the ultimate true intention of the City Council in passing Chapter 27. In a city with an absolutely frightening economic chasm between rich and poor, the council felt compelled to do something to improve the lives of the people who struggle hardest at the bottom of the scale.

But you know who knows those people and their struggles best, who’s been dealing with them face-to-face the longest, who has the deepest-running long-term relationships with them? People like Khraish and the Topletzes.

I always found it mystifying, in a city where business is a religion, that the very rich, very privileged people at the top believe that poor people are made poor by the people who do business with them. That would offer an easy way to end poverty, I guess. Don’t allow anyone to do any more business with the poor.

The instinct or impulse that Broadnax and Fortune may be acting on in this proposed deal with DHA doesn’t seem terrible: DHA is in a lot of serous money trouble now. So the idea is to go over there, sit down, meet with them, listen to them and see what ideas DHA may have for improving things. What’s wrong with that?

So I have a question. Why was that not the instinct or the impulse in dealing with Topletz and HMK? The Topletz family has been around forever. They’re major philanthropists.

Khraish has shown himself to be incredibly creative, generous and principled in this entire saga. And anyway, anyone who took the trouble to check out him and his family financially would have found they have a great international history in business and a roster of tenants who have stuck with them for more than a decade since Khraish and his father entered the rental business in Dallas.

So how did these people find themselves on Channel 8 being labeled “junk landlords” with the city threatening to expropriate their property? But DHA deserves the kid glove treatment? Answer me that one.

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