In a startling turnabout in the deadlocked West Dallas war over low-income housing and gentrification, Khraish Khraish, a landlord locked in a battle with the mayor over hundreds of low-rent houses, turned the tables Monday by announcing he will sell 130 of his properties to the current tenants.

Mayor Mike Rawlings had pushed Khraish to sell his West Dallas holdings to corporate buyers whom the mayor recommended. Khraish brushed off those offers.

Monday’s announcement means he is selling the properties instead to buyers of his choice — the current tenants. If that plan holds, it will create a wall of low-income neighborhoods for at least 20 years around the aggressively expanding gentrification area at the foot of the new Margaret Hunt Hill bridge.

The deal announced Monday means the current tenants, mostly poor and working African-American and Hispanic families, will remain in their homes in an area where land values are soaring and gentrification is rampant. If the solution sticks and the families can buy, the irony will be that a resolution came not from City Hall, whose actions so far have tended toward displacement, but from a private sector landlord whom the mayor had labeled a slumlord.

EXPAND At a private meeting with tenants Saturday, Khraish told them what he would be announcing Monday. Their reactions ranged from applause to disbelief. Jim Schutze

At a press conference in front of the first house to sell, Khraish credited City Council candidate Omar Narvaez and community leaders Hilda Duarte and Ronnie Mestas with leading him to a change of heart.

“I have been moved and transformed by the relationship of Omar, Hilda and Ronnie,” he told a large gathering of media and tenants. “Their concern for these families gave me a change of heart. I realized what needed to be done for these families and this community.

“I cannot take any credit for this decision,” he said. “All the credit must go to Omar, Hilda and Ronnie.”

Khraish and his father, partners in HMK Ltd., vowed last year to evict several hundred families and bulldoze their houses after the city passed tougher building code requirements. Instead, they now intend to sell the 130 houses where tenants remain to the occupants at a fixed price of $65,000 apiece.

HMK will finance all sales at a fixed rate of 4.7 percent over 20 years. Families will pay no money down and no penalty for prepayment, but if a family decides to sell, HMK will retain first right of refusal to buy the property back. Khraish said the right of refusal is designed to prevent speculators from talking families into flipping their land.

Many of the properties Khraish wants to sell to his tenants for $65,000 are on county tax appraisal roles for less than $20,000. But the opening of the new bridge to West Dallas has ignited a firestorm of gentrification, and actual sale prices for some lots are now in the seven figures.

“When he told me the price, it made me surprised," Duarte, president of LULAC Council 4782, said at the press conference. "I said, ‘You know that it’s not the house that they’re wanting, the city and the investors. It’s the property. You are selling two- and $300,000 properties for $65,000. You’re losing money.’ He goes, ‘Yes, but families are gaining homes.'”

At an earlier meeting Saturday where the decision to sell was announced to more than 100 tenants, initial reactions ranged from cheers to disbelief. But after answering questions for an hour, Khraish seemed to win the trust of most in the crowd.

At the press conference Monday, Khraish said he had signed up 10 buyers and would have 120 more under contract within weeks.

The core question of code compliance remains. None of the 130 houses Khraish proposes to sell meets tougher standards imposed by a new housing code ordinance passed by the City Council last year. Responsibility for bringing the properties up to code will now reside with the new owners.

Khraish said Monday he will lobby Catholic Charities to help the new owners make repairs with the $300,000 in grant money it recently received from the city to assist the HMK tenants.

Khraish is not selling all of his properties in West Dallas. He described four areas where he said his company will redevelop its land for higher-end residential and commercial uses.

Also Monday, District Judge Ken Molberg extended a temporary injunction designed to keep HMK tenants in their homes and shield HMK from city code enforcement. Molberg's order set a trial date for the city's suit against HMK for Oct. 2 and allowed an existing injunction to continue in force until then. In an earlier proceeding, assistant city attorney Melissa Miles had argued against an extension of the order. Had she prevailed, mass evictions would have taken place June 3.

