Dallas officials have identified $1 million in federal funds to help provide rental assistance for people facing eviction from homes in West Dallas and elsewhere after landlords say tough new housing codes forced them to stop renting the properties.

The funds could be used to assist ​working class tenants in rapidly gentrifying West Dallas and in southern Dallas as they are uprooted in a crisis over affordable housing. Renters pay $300 to $600 a month for their homes and can’t afford more typical market prices of about $900 for a two-bedroom rental in north Oak Cliff to $1,400 in the Oak Lawn area.

Next week, the Dallas City Council will discuss a proposal to tap the funds. A final vote isn't likely until early August, after a required public hearing.

Last September, Khraish Khraish, co-owner of HMK Ltd., told city and county officials his company planned to yank about 300 rent houses off the market. That sent tenants scrambling for new housing. The HMK tenants, about half of whom have relocated, mostly live in small, ramshackle houses tucked into neighborhoods near new high-dollar apartments in West Dallas. A court has given them until October to get out of the houses.

"So many lives have already been so disrupted," said council member Scott Griggs, who heads the city's housing committee. "I am not claiming this is going to solve the HMK housing crisis in West Dallas. This is more looking forward."

Vacant houses and scraped lots owned by HMK can now be found in West Dallas. HMK sold some homes for $65,000, but other tenants found new rentals. (David Woo / Staff Photographer)

The money to help tenants rent other homes would come from a program called HOME Investment Partnerships through the U.S. Department of Housing and Urban Development. The initiative gives cities flexibility with federal dollars: They can use funds to build affordable homes, repair existing ones and help families with mortgage or rent payments.

The federal government gave Dallas more than $4 million in HOME funds this fiscal year. But the $1 million in rental assistance the city proposes is "program income" — money paid back to the city from loans issued through HOME, said Raquel Favela, the city's new chief of economic development and neighborhood services.

Under program rules, rental assistance must be channeled to families making 80 percent or less of the median income in the area where they live. Eligible families would have to pick a home within the Dallas city limits and could get help for up to two years.

Favela said the city plans to mirror how the Dallas Housing Authority calculates rent payments. That agency uses fair market rents by ZIP code.

For example, if the fair market rent for a two-bedroom apartment in a Dallas neighborhood is $1,000, and a family can afford a payment of $500, the city would pay the difference.

“There’s an underwriting process ... that ensures the family can actually afford the $500 to begin with,” Favela said.

A home is considered affordable if payments don’t exceed 30 percent of a family’s monthly income.

The city’s stringent housing code, known as Chapter 27, was never meant to displace families and make them “collateral damage,” Griggs said. But that’s exactly what happened when Khraish and other landlords chose to shutter homes rather than face expensive repairs or fines.

The city's new rules require code inspections of single-family rental homes.

Dallas City Council member Scott Griggs heads a city housing committee working on challenges to low-income residents.

The measure under consideration could cover others potentially displaced by Chapter 27 and not just HMK tenants, Griggs said.

Griggs, who represented a portion of West Dallas for two years, recently worked with state Rep. Eric Johnson, D-Dallas, on a failed bill that would have blunted the impact of new West Dallas properties on the appraisal of older homes, among other things. West Dallas now falls in District 6 and is represented by Mayor Pro Tem Monica Alonzo.

Alonzo declined a request for a phone interview about the city’s proposal.

“These funds were not available until now and requires a public hearing,” she wrote in a text message.

Dallas budgeted $130,000 in HOME funds for rental assistance in 2015-16. Favela, who joined the city in April, said Dallas officials discontinued that assistance last year to focus instead on homeownership and housing repairs.

The city’s housing director, Bernadette Mitchell, told council members in March that disbursing rental assistance was “lots of headache for what you’re pumping out there.”

“The production is low, and there’s a lot of regulation,” said Mitchell, who resigned last month.

HMK landlord Khraish Khraish congratulates Merced Correa, a former tenant who bought his HMK house for $65,000 in a surprise reversal of position by the landlord for West Dallas tenants in May. (Tom Fox / Staff Photographer)

Favela oversees the directors of housing and code compliance, among other departments.

“We expect that we are going to come up with other solutions because, frankly, we have an overall shortage of housing units,” Favela said.

HOME funds might not be an option in the future. President Donald Trump's proposed 2018 budget eliminates the program.

In May, Khraish reversed a previous position and said he would sell some of his aging rental houses in West Dallas to tenants. Earlier, he said he'd only sell in southern Dallas. As of this week, the landlord said he has sold 59 houses in southern Dallas and 19 houses in West Dallas.

"Gracias to everyone in this struggle," says Merced Correa, who moves fm tenant 2 homeowner in Dallas housing drama. HMK reverses stance. pic.twitter.com/M1Qhmz6KpH — Dianne Solis (@disolis) May 22, 2017

Twenty additional tenants in West Dallas have begun the process to buy HMK homes, he said. That could ultimately make homeowners out of a third of the 300 HMK tenants.

Khraish also plans to use some of his vacated properties in certain West Dallas areas for new housing, including townhomes for sale for about $200,000 or more. About 45 tenant households now live in those areas, the landlord says.

Khraish also wants to build apartments with units at affordable rates and is pushing for government tax credits to do so. On Thursday, three elderly tenants older than 72 accepted contracts for the homes as life estates, which provides mortgages but only for the duration of a person's life. Afterward, the property reverts back to the landlord, Khraish said.

#WestDallas resident Pearlie Mae Brown will stay in her HMK home. #AffordableHousing crisis takes another surprise turn. New plan 4 elderly. pic.twitter.com/CdovB87RBt — Dianne Solis (@disolis) June 8, 2017

Esther Perez is one of the tenants who could potentially be helped if the assistance is approved by the City Council.

Catholic Charities of Dallas, which has a smaller city-financed fund to help tenants, has indicated it may help Perez with her first month's rent at a new home. But Perez, 64, said her rental prospects all have prices of $1,200 — more than double what she now pays.

She lives in a neighborhood marked for redevelopment by HMK, so she can’t buy the house she’s in now.

“I can’t find a place to live,” she said. “Where do I go?"