On the surface, the white hats and the black hats in the West Dallas housing fight seem pretty obvious. Khraish Khraish at first looks like a black hat. That’s what I thought when I first discovered his company’s name on property records a couple of years ago. His firm, HMK, owns 263 properties--many of them tiny, five hundred square foot houses built in the 1940’s--constructed before West Dallas was even annexed by the city. Many are unoccupied. And at least a fifth are empty lots. This guy’s gotta be a slumlord, I said to myself.
The white hat in what’s evolving into a range war over land appears to be Mayor Mike Rawlings. Last fall, the city amended Chapter 27 of the city code. It beefed up rehabilitation standards for rental properties. Landlords not meeting the standards could face fines of $1,000 a day for each violation and possible criminal penalties. The mayor and his posse of code enforcers rode into West Dallas and said Khraish’s properties were not up to snuff.
Khraish knew two things: the properties were physically incapable of being brought up to code at any price and that he couldn’t afford the fines. So he called the city’s bluff and said he would close his business. He began notifying his tenants they would have to leave. He knew the residents had no place to go. (Most of the homes rent for about $400 a month and there is scant comparably-priced housing for them to move to). At the same time, he says the mayor had been telling him since 2015 he should sell the property.
The matter went to court. Under mediation, it was agreed no one would be forced to leave until the end of this school year, June 3rd. Kraish and the mayor are now squared off at two ends of Singleton Boulevard, their fingers poised to draw down on each other. Singleton is key to this drama, which I’ll come back to shortly.
The gunfight over West Dallas has been brewing since last fall, and it’s been clear that something cataclysmic is in the offing.
I’m teaching a class in investigative reporting at SMU this semester with Professor Jake Batsell. We assigned our students to canvass the neighborhood. They visited the six streets in West Dallas where most HMK properties are located: Nomas, Chicago, Rutz, McBroom, Conroe and Ladd.
They went to 117 properties in all, knocking on doors and speaking to whoever would talk to them. It wasn’t entirely successful. Many folks didn’t answer their doors. Some weren’t home. Forty-two of the properties are either unoccupied or empty lots. But the tenants who did chat revealed a surprising portrait of their landlord.
Khraish Khraish, many said, is not a bad guy. A resident at 3515 Rutz said “I don’t blame the guy (for what’s happened here). I’ve never seen him cry, but when he told us we’d have to leave, he had tears in his eyes.”
Others weren’t that happy, saying that repairs they’d asked for weren’t made. Tenants are accustomed to seeing Khraish because they are required to pay their rent in person, by money order, each month, at his office on Singleton a few blocks away. They know him, he knows them.
Since most of the neighborhood is hispanic, Hilda Duarte has been doing her own digging on Khraish Khraish. She is president of LULAC (the League of United Latin American Citizens) Council 4782. She and a colleague visited more than two hundred HMK properties in the neighborhood last fall. Then they went to see Khraish in his office. She says they found a teary-eyed landlord meeting with his tenants. “His back was up against the wall. He knew the properties could not be repaired. He was telling his tenants they would have to leave,” she says.
She’s now a Khraish supporter, a lightning-rod stance in a neighborhood where frustration mounts by the day. At average rents of about $400 a month, tenants have nowhere else to go at a comparable price and they are growing restive as June 3rd approaches. When Khraish told tenants they’d have to leave last fall, about 35 of them quit paying their rent.
Why pay rent, they surmised, when the endgame is a foregone conclusion? That conclusion for many seems to be homelessness. Khraish has a contract to sell 110 lots in the area to Habitat for Humanity in two weeks. But those homes can’t be built overnight. In addition, as reasonably-priced as Habitat homes are, most are out of financial reach of tenants with less than $45,000 in annual income.
Cindy Lutz, Habitat’s Executive Vice President for the Dallas area, knows as much about low income housing as anybody in the city. I ran into her in West Dallas while driving the neighborhood last week. We stood looking at an HMK house which, like most of the properties, she said could never be economically repaired to meet city codes. “This all isn’t going to end well for anybody,” she said.
There’s an economic steamroller lumbering across the Margaret Hunt Hill Bridge in West Dallas, and a lot of little people stand to get crushed by it. Because the battle over little houses owned by HMK is fueled by a hunger for the property they stand on.
Most of them have a value of about $10,000 according to the Dallas County Appraisal District. But the lots, by all accounts, are worth much more. That’s because gentrification is performing plastic surgery on the neighborhoods bordering Singleton and their value is skyrocketing.
The sprawling Trinity Groves restaurant incubator now serves up sushi, tapas, and night life on property that used to be fallow. Over the last three years, Trinity Groves has become a catalyst for construction of upscale apartments and a David Weekley residential home development. Gentrification is marching up Singleton, with HMK’s West Dallas holdings right in its path.
That’s where Mayor Rawlings and the color of his hat come in. A few days ago, identifying himself as a private citizen, he contacted Khraish, saying he knew of investors who wanted to buy the property. A letter of intent to purchase HMK’s West Dallas holdings was indeed presented to Khraish, who says the offer is confiscatory. When all is said and done, he says, the proposal is worth about ten cents on the dollar. That could be high or low, value being determined by what a buyer is willing to pay and a seller willing to take. Kraish says the offer starts with an evaluation of $20 million, but there are several deductions for the costs of repairs to the properties which decimate the eventual value of the deal. Since it’s generally believed the properties are beyond repair, there’s a question of why repair costs would even be an issue.
Khraish says the mayor’s motive is a land grab to benefit his friends. The mayor’s spokesman Scott Goldstein says Rawlings acted because Khraish Khraish told him he would sell the property, and the mayor was simply following through. Khraish says the mayor told him “I turned over rocks to find these guys.” The would-be buyers, Paul Jackson and Richard Morgan, work for a firm called Residential Equity Partners and have a background in the R2R, or ‘rehab to rent’ business.
They told the Dallas Morning News their plan is to rehabilitate the properties and lease them back to the residents. The net effect would be to replace one landlord with another, in homes the city currently deems out of code compliance. The city says three families are negotiating with HMK to buy their homes back. Khraish Khraish this is absolutely untrue.
A first generation American, Khraish is definitely an outsider in Dallas’ power elite. His father, Hannah (the ‘H’ in HMK) emigrated from Lebanon in 1987. His son says his father grew up dirt poor in a village and vowed that his son wouldn’t face the same fate. Khraish the younger grew up at his dad’s side in the West Dallas business, got a bachelor’s degree from UT and three master's degrees. He vows not to squander a business that has symbolic as well as material value to him.
Now Khraish has decided to joust with developers on their own playing field. He’s formed Oasis West Dallas with architect/designer Alexander Terra from Washington, D.C. and his owns plans for the property. The first goal is to develop 100 units of multi-family housing along Singleton. The price point for these homes, he says, are the $190’s, above what his tenants could afford but far less than what home builder David Weekley is putting up in the area.
Meanwhile, in the neighborhood, about a hundred families have already moved, Khraish says. The rest have less than six weeks to be gone.
The city and Kraish are due back in court on May 22nd when Judge Ken Molberg will determine if that changes.