Let’s get real about what’s really going on with the Khraish family, called slumlords by Dallas Mayor Mike Rawlings and WFAA Channel 8 for shutting down 300 low-rent houses in West Dallas and South Oak Cliff.
This is a land play. The city has offered no provision, no contingency, no shred of a plan by which the 300 families in the houses to be shut down could live anywhere else inside Dallas. Everything the city has demanded results in those families tossed to the curb. The city has not lifted even its little teacup finger to provide other housing within the city limits at equivalent rents, $300 to $450 a month for a house.
When the Khraishes proposed looking for a reputable nonprofit that, unlike a for-profit business, might be able to sustain occupancy of the houses at a loss, the city went even more on-the-muscle with them and began trying to talk their tenants into suing them.
None of the actions taken by the city — not one — offers any hope of continued occupancy of those 300 properties or any other properties by the current occupants at rents they can afford to pay. Meanwhile and not coincidentally, the properties in West Dallas owned by the Khraish company, HMK Ltd., are directly in the line of impact for an enormous wave of gentrification spreading west from the foot of the Margaret Hunt Hill Bridge.
If the city were to do something decent and permanent to provide affordable housing on the West Dallas properties owned by HMK, that band of affordable housing would operate as a limiting barrier on the blitzkrieg of new $300,000 condo units marching west from the bridge.
Clearly, somebody doesn’t want that to happen. Clearly, somebody wants not only to buy the Khraish property but to buy it at extremely depressed prices.
Khraish H. Khraish, the younger of a father-son team who own and operate HMK, told me his company already is getting exploratory calls from major developers asking if they are ready to sell or develop their land, but with a hitch.
“I tell them, ‘Let’s talk about it,’” Khraish said Sunday. “But then they say, ‘You have a problem at City Hall. There is no political support for us to work with you.’”
I asked him what in the world that means. Why did they call?
He said, “It means I am an untouchable.”
I asked him again what in the world that means. I still didn’t get it. If he’s untouchable, what do they want?
He said it means they are calling and telling him they might be interested in his land, but that he would have to acknowledge that in selling it to them he would have no leverage, no rights, no bargaining position. His land is worthless as long as he owns it.
Finally the slow light bulb. “So they want it,” I said, “at that price? The worthless price?”
“Exactly,” he said.
The other handle of the vice-grip is this: HMK apparently is not going to be allowed to simply sit on its property, to not rent it, not sell it, sit on it and pay the taxes until they can sell it to the gentrifiers at market prices. City Hall is making sure of that.
After a July 2015 meeting in which the Khraishes declined to agree to certain “voluntary terms” set out by Rawlings, the city imposed liens on Khraish-owned properties for failure to mow weeds, totaling $52,000 in fines. They paid the fines but filed an open records request demanding to see the record of notices and warnings they should have been sent by law before a single lien could be filed. Rather than produce records of its own actions, the city refunded the full $52,000.
You know what that is? That’s City Hall acting as a goon squad. They couldn’t find their own record of inspections, because they didn’t do any inspections. They just hit the Khraishes with 52 grand worth of fines and liens as a shot over the bow. Get out. It gets worse.
Khraish talked to me at some length about the new rental standards passed by the City Council. Not once did I hear him say anything negative about the standards themselves.
All I heard him say was that the properties he and his father bought en masse in 2003 include some hundreds of houses that the Khraishes cannot bring up to the new required standards for one of two reasons: either the houses are not physically capable of being brought to the new levels or bringing them to the new levels would require charging higher rents than can be collected in those neighborhoods right now.
“Some of these houses were built 70 years ago according to a different construction technique than what is used today,” he told me. He said the only practical approach in many cases would be demolition. “We would have to rebuild the whole house. We are not in that business. We are not builders.”
So what are they? What business are they in? The mayor and Brett Shipp at Channel 8 say they are slumlords.
They bought hundreds of houses 13 years ago from another family. They say they have never raised a single tenant’s rent in that time. Khraish told me his company “can patch the houses and keep a roof over people’s heads.”
It was a business that was acceptable under the standards of the time when they entered it. They have operated that business within the law. The city’s recent campaign of so-called code violations against them has blown up in the city’s face, like the mowing liens, because the Khraishes have always stayed within the law.
But that was the old law, before the recent reform. Was it a good law? Maybe not. The recent reforms were strongly endorsed by a coalition of community groups and activists who argued persuasively that Dallas needs to do more to guarantee safe, healthy conditions for poor renters.
The Khraishes looked hard at the new ordinance. Remember that even before the ordinance was passed they took a $52,000 hit in bogus liens from the city after declining to enter into a “voluntary” agreement with Rawlings in July 2015 — not exactly a signal of good or trustworthy intentions.
Under the new ordinance, the Khraishes could be looking at fines of several thousand dollars a day for each structure the city deems noncompliant. If the city says 300 or 400 of their houses are noncomplaint, the theoretical fines could be a million dollars a day.
And they could go to jail.
Here is where this story gets really interesting. The Khraishes look at all of that. They weigh it. They decide they are landlords, not builders. The new standards don’t pencil out for them in terms of the rents they think they can get in their business. So they decide to get out of that business.
Every single thing they have done since taking that decision has been in accordance with state law. State law requires them to notify the city and their tenants that they are taking the 300 properties out of the rental business. Then they must demolish the houses or rebuild them within six months and get the rebuilt structures to pass a new inspection.
They can’t use going out of the rental business as an excuse to throw out the tenants and then stay in the rental business. “We can’t close the properties and then open them back up,” Khraish said.
The only way for the Khraishes to get out from under the threat of devastating fines and jail and also hold onto their land is to go through the process they are using now: notification to the city, notification to the tenants, removal of the tenants, demolition or repurposing of the houses.
I asked Khraish if the promise of gentrification is good enough to make it worth just sitting on the land and paying the taxes until some future sale date. He said sitting on the land without collecting any rent could almost be worth it, given the steep escalation of values accompanying the approaching wave of gentrification, if the city were not holding community meetings to actively recruit people to sue them.
The combined effect of the city’s actions is to pressure them with litigation costs while depressing the price they can get for their land, because the city has painted them as political lepers.
Let me pause here and ask you something. Why sue them? Aren’t they gone? Aren’t they out of the rental business or in the process of getting out? This is America. You can quit a business if you want to, can’t you?
Ah, but if they could get out clean and cold, just stop, clear the land, sit on it like anybody else, then they could hold out for a price for their land. They wouldn’t get calls saying, “We’ll buy your land, but you have to sell it to us at the leprosy price.” They could hold out for an honest price if the city would let them just leave the business.
We Believe Local Journalism is Critical to the Life of a City
Engaging with our readers is essential to the Observer's mission. Make a financial contribution or sign up for a newsletter, and help us keep telling Dallas's stories with no paywalls.
Support Our Journalism
Now put these two pieces back into the picture: Not once in any way has the city shown any interest in finding or providing housing for the people. Not once has the city expressed any interest even in helping the Khraishes convey their property to a housing nonprofit, which they have offered to do.
This is what I mean by get real. Mayor Mike Rawlings and his allies do not want the kind of poor families who rent from the Khraishes to stay where they are. The mayor and the top city brass know all too well there is no other place in the city where these families can find houses at $300 to $450 a month.
They want these people out of this neighborhood. They want them out of the city. They want the Khraishes’ land. They want to steal it.
And then they want to fill the area with $300,000 condo units and people walking beautifully groomed poodles to cunning little coffee shops. That’s how Dallas City Hall rolls — right over the bodies of the poor.