Choosing Between Squalor Or The Street: Housing Without Government Aid

Enlarge this image toggle caption Allison V. Smith for KERA Allison V. Smith for KERA

This story was reported in partnership with PBS Frontline's podcast, The Frontline Dispatch. You can listen to the extended podcast version of the story here.

Pearlie Mae Brown's wooden house is listing a little. The screen door is broken, and another screen door is nailed sideways over a window.

Inside, most of the outlets don't work, cockroaches scurry across the appliances and the kitchen floor has a large hole in it down to the dirt below the house.

"It's supposed to be a wooden floor," Brown, 81, says with a wry smile.

This house is a rental — just minutes away from the booming heart of downtown in West Dallas, the newly gentrifying neighborhood where Brown has lived all her life.

Many of the houses are cheap in this part of town, but the conditions are often poor. Brown says she has little choice. She cares for her disabled granddaughter, and she can just barely afford the $430 monthly rent on the $770 she receives from her deceased husband's social security and disability checks.

Her landlord is a man who has the same first and last name — Khraish Khraish. He works just a few blocks away in a small, bleak office. Some, including Khraish himself, say he is a champion of the poor providing people like Brown with low-cost housing when they have nowhere else to go. Others say he's one of the city's worst slumlords.

And lately in this neighborhood - and in cities all across the country - the line between those two is increasingly clouded and complicated.

Nationally, only about a fourth of the people who qualify for government aid with housing actually receive any help, through programs like the Section 8 Housing Choice Voucher program. Millions of others end up in what is often referred to as the "unassisted market." They live in places like West Dallas, where our investigation found the system is often stacked against them and the choice more often than not is between squalor and homelessness.

Cracking Down On Code

This Hobson's choice has existed in West Dallas for decades. But one day, two years ago, the city of Dallas changed the status quo and fundamentally altered the state of housing in West Dallas.

In 2015, city officials began a crackdown on landlords. Inspectors ticketed and fined Khraish and other landlords and took them to court over the conditions of their properties. Nobody at the time had any idea how this story would end.

Not even Khraish. He and his father bought more than 300 West Dallas homes in 2003. He says the homes are not fancy, but they are livable.

"My father and I went into every single home, cleaned up drugs and needles and human waste," Khraish remembers.

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"Twelve hour days, six days a week. We're still open six days a week," he says. "I've been proud of what I've done in providing housing to the lowest income households in Dallas."

But when Executive Assistant City Attorney Melissa Miles sent inspectors into dozens of Khraish's homes, they found many problems.

"Houses falling off their foundations ... walls that don't connect anymore," she says, "rooms where you look through in the seams of the walls, you could see light from the outside."

Miles and the city created a book of hundreds of violations and ordered Khraish to make repairs.

Khraish called the book devastating.

"It was just bankruptcy," he said. "They want me to bring these to a standard these houses cannot attain. These were built in a time without code. It's like how do you make a 1930's engine meet modern day emission standards? You cannot."

Enlarge this image toggle caption Allison V. Smith for KERA Allison V. Smith for KERA KERA Series: No Place To Go KERA News has been on the ground documenting the upheaval in West Dallas, in a digital project by Courtney Collins, Jessica Diaz-Hurtado, Molly Evans, Justin Bowers and Christy Robinson.

But from the city's standpoint, that was Khraish's problem.

"I don't have a ton of sympathy for someone who got away with something to their benefit to the detriment of other people who weren't in a good negotiating position," Miles said. "I don't have a lot of sympathy for people who say, but I've gotten away with it all this time, why are you changing the rules on me now? To that, I would say we haven't changed any rules."

The city recently added some new code requirements, but mostly officials were asking Khraish and other landlords to meet longtime standards that many say the city had not religiously enforced until then.

They were the kind of standards that tenant Pearlie Mae Brown says she never had while living in a rental house. That's the case for many people nationwide.

Across the country, the majority of poor families are spending more than half of their already small incomes just to cover rent. And while median rent has increased 70 percent over the past two decades, housing conditions haven't improved, according to a 2015 Harvard study.

Brown's daughter, Pearline Brown Harper, wastes no time explaining what she thinks of Khraish.

"It shouldn't come out of anybody's mouth what I think about him," she said. "He didn't come fix nothing. He just told the tenants that they would have to take care of stuff their selves. He's just a slumlord. And these people out here have made him the rich man that he is."

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Khraish isn't flashy. He lives in an upper middle class neighborhood and drives a 10-year-old car. For years, he was also collecting as much as $180,000 each month in rent in West Dallas.

He's not the only one to see the investment potential here. Across the country, mom-and-pop landlords are on the decline, and owners with dozens or hundreds of properties are on the rise, according to an analysis by Harvard's Joint Center For Housing Studies. It's the same in Dallas.

And the less a landlord has to spend on repairs, the more money he or she stands to make.

Hundreds Facing Homelessness

Which could explain what happened next: After the city intervened, Khraish responded with a surprise. In the fall of 2016, Khraish announced that he was not going to fix the homes up or bring them up to code. Instead, he said, he was going to tear the homes down, and kick out the residents.

Suddenly hundreds of residents were facing imminent homelessness.

"When I shut down my rental business and 300 households were facing imminent displacement, you know what the real panic was? It wasn't that they had to leave," Khraish said. "It's that there was no place to go to. There was not 300 ... affordable housing units in the entire city of Dallas."

There was little the city could do. They worked to find housing for Khraish's tenants and reached an agreement to allow them to stay until the end of the school year in June 2017. The city agreed not to fine Khraish for code violations during that time. Eventually, a Dallas County district judge extended the agreement to allow tenants to stay in their homes until October 2017.

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"I understand there's blame to go around," city attorney Miles said about what would happen to the residents. "There's blame for the city. I think there's blame right up the ladder of government and sort of everyone in between, from national policy to the owner of a particular property not caring enough, not being humane enough, not being willing to be a little less personally greedy to do something about it."

But the question looming over all of this is why the city had decided to enforce code more aggressively in the first place.

Khraish had a theory.

"The city of Dallas does not want low-income households in the city," he said.

Khraish's theory goes like this: The city wants him to renovate his homes because if he renovates, he'll have to charge more to recoup the costs. His tenants can't pay more, so they'll go live somewhere else, somewhere other than gentrifying West Dallas or maybe even all of Dallas.

"Their affordable housing policy is not to have one," he said.

Dallas Mayor Mike Rawlings said that's not true. He said the city could no longer allow people to live in such poor conditions.

"I think you have to make those decisions based on principles," Rawlings said. "And that is the principles of making sure that people live in safe environments, okay? Safe and clean environments is not asking too much."

Safe and clean environments is not asking too much.

It took the city decades to ask that much of its landlords. But Rawlings says he hopes low-income, middle-income, and wealthy people will all live together in West Dallas as the neighborhood transitions into a sought-after community.

"We're going to have people live in good housing," he said, "and we're going to keep pushing this thing. So we're going to find better and better answers."

It's a difficult dilemma for many cities: Officials can enforce code so that people live in decent conditions, but rents might rise as a result and the poor might be left with no affordable alternative. Or they can allow the properties to deteriorate and face a reality that in one of the wealthiest countries in the world, some of its most vulnerable residents live in squalor.

Cities could avoid this choice by never letting properties go into disrepair in the first place. But that costs money. Cities have to pay to take landlords to court, staff a code enforcement office and hire inspectors.

"There's a lot of tax money that comes in from downtown," explains prominent housing civil rights lawyer Michael Daniel. "It wouldn't take a lot of it to make some differences. But you can't shift it. If you start telling people, your potholes are going to last a year longer because we're going to do code enforcement in West Dallas, their council members will say, 'I'll lose; I can't do that.'"

Daniel says what's more, the city might be secretly happy Khraish decided to evict the residents.

"The city didn't have to spend the money," he said. "You bring it all down, and you bring it back as something that rises from the ashes."

Except in those ashes, he says, only wealthy people get to live, and you don't even need to do code enforcement.

Seller-Financed Deals

And that might have been the end of the West Dallas story, except Khraish had a coda to add: Last summer, he announced he was sparing about half of his tenants from eviction. Instead, he says, he was going to make them homeowners.

Khraish plans to lend his tenants the money himself to buy the houses. Seller-financed deals are often controversial and can sometimes leave buyers with less-than-favorable terms. For example, some of Khraish's contracts say that if buyers miss one payment, he can demand that they pay off the entire house immediately or lose it.

There's no way to know whether that's what Khraish intends. But in the meantime, when it comes to code enforcement, he will no longer have to worry about repairs. From the city's perspective, he's not the owner anymore.

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Pearlie Mae Brown signed a contract with Khraish called a "life estate." When she dies, the property will revert back to Khraish.

Until that happens, Brown says she can't afford to fix the house, but she has nowhere else to go. Mayor Rawlings called this a happy ending. More than one hundred people will get to stay in West Dallas as homeowners.

"It's not my job to lawyer the papers," he said. "And I don't think that he's got any motivation to outright defraud individuals."

Khraish agrees that he doesn't.

"I was never a slumlord, but I'm certainly not going to trade the slumlord moniker for the predatory lender moniker," he said. "I'm trying to do the right thing. I believe I am doing the right thing. I believe that the community trusts me that I'm doing the right thing."