Landlady Lupe Valdez: Better to offer low rent than pay taxes on time


Highlights

Lupe Valdez said it was better to be late paying her property taxes than raise her tenants’ rent.

Valdez has been providing below-market rent to tenants for decades.

Valdez’s approach to real estate investing has been to buy the worst house on the block and fix it up.

Colin Howell and Jayme Thompson have a dream to start a mobile food truck — the Flying Pineapple Baking Company — selling retro desserts in Dallas-Fort Worth.

What’s made the numbers work on their ambition is their phenomenal rent — $700 a month for a piece of a fourplex on the outskirts of Oak Cliff’s trendy Bishop Arts District.

“This is Bishop Arts. For what?” Howell said he responded when he was shown the place and told the rent. “It’s like half the price of all the other places around here. It’s great.”

The couple’s landlord — Lupe Valdez, the former Dallas County sheriff and current Democratic candidate for governor — said the low rent was about giving Howell and Thompson a chance to succeed.

“That gave them the opportunity to be able to go beyond themselves and be able to start the food truck and be able to get engaged and be able to do things they would never have been able to do if they had to spend so much to be in an area like this. It’s about giving people the opportunity to get beyond themselves,” Valdez said.

For 25 years, Valdez — alongside jobs as sheriff and a federal agent for various agencies, including Customs and Homeland Security — has purchased properties in Oak Cliff, fixed them up with her own money and muscle, and rented them at below-market rates in what she describes as an act of entrepreneurial social conscience and giving back.

“These people are getting an opportunity that somebody gave me,” Valdez said. “You’ve got to pay it forward, except I’m doing it eight times or 10 times more than it was done for me.”

Despite her prominence in Dallas — she was the county’s first female, Latina and lesbian sheriff when she was elected in 2005 — Valdez’s small portfolio of unusually affordable housing was unknown to the broader public until just after her primary runoff victory in May, when she earned the right to face Gov. Greg Abbott in the fall.

That’s when the Houston Chronicle reported that Valdez hadn’t paid all of the property taxes she owed for 2017 on seven of her 13 Oak Cliff properties — nine residences and four empty lots, excluding her own home — as well as some acreage she owns in Ellis County.

The headlines were not good.

Abbott featured the Chronicle story in his speech at the Republican State Convention in June. It seemed further evidence that Valdez — who had loaned her cash-starved campaign $25,000 early in the year, money that could have covered her overdue taxes — had not planned her run for governor very well.

By the end of June, Valdez had finished paying nearly $22,000 in back property taxes, penalties and interest just ahead of July 1, when an added 20 percent penalty would have been applied. She had paid only $4,100 in taxes on those properties before the customary Jan. 31 deadline.

But during a tour of some of her rental properties with the American-Statesman just after the July Fourth holiday, Valdez said her first responsibility was to her tenants, even if it meant paying taxes late and at a premium.

“Those people over there, those people over here,” Valdez said, referring to tenants of her two fourplexes on West 10th Street in Bishop Arts, “they basically said we’d never be able to live a decent life if we didn’t have this, and that’s a lot more important than being late on taxes — a lot more.”

That a failure to pay her taxes on time was not politically smart does not seem to have occurred to Valdez, or particularly matter to her.

One answer would have been to sell one or more of her properties to cover the costs of skyrocketing property taxes.

One fourplex at 625 W. 10th St. had a market value of $85,840 when she bought it in 2013, rising to $268,660 in 2017. The proposed value for 2018 is $321,600.

The other, where Howell and Thompson live, had a market value of $117,000 in 2013 and a proposed value this year of $251,000.

Valdez isn’t interested.

“I’m not selling it, because you know what they are going to do? They’re going to gouge the renters. I’m not doing it,” she said.

“Maybe when I’m 95 and I can’t make sure everything is done anymore, maybe then I’ll sell them, but by then you know how many people I would have helped?” Valdez said.

Her property manager and accountant have suggested raising rents, but Valdez refuses.

“If you’re the working poor, I’m not going to raise the rent on you,” she said. “I’ve made it a point for 25 years to be able to give the working poor a decent place to live.”

Spotty tax history

While public attention focused on Valdez’s failure to pay her property taxes on time for 2017, Dallas County records indicate a spotty taxpaying history.

For example, on her highest-taxed property — 625 W. 10th Street — Valdez paid $782 of her 2013 taxes on time and $1,704 late. The next year she paid the full amount — $2,660 — on time. For 2015, the total payment of $2,635 was late. For 2016, $1,041 was on time and $2,848 was late. And for 2017, $500 was on time and $7,725 was late.

After the story of her unpaid taxes broke, Dave Carney, Abbott’s chief strategist, tweeted: “Question: What’s the best definition of the term Slumlord? Does one need to own a bunch of places? Do they need to be rundown & have code issues? Absentee, neglectful, proxy owned to avoid taxes? Discuss!”

Katie Letts, who is just moving out of 625 W. 10th to be closer to a new teaching job in Arlington, admits she wondered early on whether the setup was too good to be true.

“I lived here over a year, and there is no catch,” Letts said. “I moved from New York, so I wondered, is this a slumlord situation? I had that in New York. But no.”

“There’s nowhere in Dallas you can live affordably with this kind of space, at all, and I have a background in apartment leasing and rental — that’s what I used to do — so I know the market really well,” said Letts’ neighbor, Jaclyn North, who, with her spouse, Donielle Edler, has lived there going on four years.

“The thing that I like is that she’s purposeful about what she’s doing,” North said. “This is not a one-time thing. This is not a recent thing.

“She’s looking for people that are here long-term, that are here to build their home,” said North, who sells medical equipment. Edler is a teacher. “She’s trying to build a community, even in her buildings, that is stable and solid and is good.”

David Spence, a pioneering developer and investor in Oak Cliff, thinks the rap on Valdez for not paying taxes on time is unfair.

“As a property owner myself, I would be thrilled for my governor to know what it’s like to feel the pinch. That’s a job qualification,” Spence said. “I live in the hood; I don’t know her. I just don’t see that she is neglectful of her affairs generally. You might not want her for governor for other reasons, but I don’t think that’s a real legitimate one — that she doesn’t, quote, pay her property taxes.

“What she’s doing, picking up properties here and there, having tenants here and there, in this neighborhood, that is a very healthy and natural thing, and a lot of people are lamenting that the way the ownership patterns are happening here and the way they’re changing is, we’re going to have outside people owning this neighborhood,” Spence said.

And, Spence said, the addition of high-end, high-density housing on West 10th means Valdez’s fourplexes are “bulldozer fodder.”

“That’s just an economic fact,” he said.

Living in a dream house

For a little over a year, Patrick Graves and his fiancee, Shannon Kennimer, have lived in a 725-square-foot Valdez rental house on Padgett Street in Oak Cliff’s Cedar Cliff section, a drab neighborhood of small houses. The 1925 house has an assessed value of $19,230, right about where it was when Valdez bought it in 1997.

But for Graves and Kennimer — who had found themselves broke and hopeless living with her family in Lake Wales, Fla. — it’s been a dream house.

“Lake Wales is where we hit bottom,” Kennimer said.

Now they and their Chihuahuas have a home near where Graves works, with a big backyard, sheltering pecan trees and an above-ground swimming pool, for $675 a month.

“People say this is not the best neighborhood in the world, but I’d rather live here than most of the upper-class neighborhoods I’ve lived in,” Graves said. “We can have our radio going; neighbors don’t complain. My truck’s a little bit loud; neighbors don’t complain. Everybody pretty much keeps their yards up, and everyone’s real nice and friendly.”

Valdez, Kennimer said, understands that “sometimes the first doesn’t land on payday” and lets them pay when they are able. Sometimes she’s let them do home improvements in lieu of rent.

“She’s willing to put people in housing that they can afford, and that just changed our lives right there,” Graves said. “We went from nothing to living like normal human beings again.”

“She said as long as we’re here she won’t raise the rent,” Kennimer said. “That’s crazy.”

Take the worst, fix it

Valdez was living in Mesquite when she moved to Dallas in the late 1970s.

“I was looking for affordable housing, and at that point, Oak Cliff was known as the drug town, the drug area, and housing was very affordable because that’s where the robberies were in the ’70s, ’80s,” Valdez said.

She bought a house on Ivandell Avenue in the Sunset Heights section of Oak Cliff, where she lived for about eight years.

“I was an agent and I had a dog, and I used to say, ‘The dog will let me know you’re coming and the gun will greet you, so don’t bug me,’ ” Valdez recalled.

The Ivandell house is now home to security guard Reynaldo Mancilla Jr., his wife, Nancy Ortega, and their 7-year-old son, Jonathan.

“I used to love this little house,” Valdez said on revisiting it.

Mancilla said he didn’t know Valdez was his landlady until he signed the lease.

“So, the sheriff,” he said. “We should definitely take care of the house then.”

In 1983, Valdez bought a house on Ravinia Drive in the Ravinia Terrace neighborhood. The Ravinia home, steps away from a corn stand and two taco restaurants, is valued at $66,000, right where it’s been for two decades. She now rents that out, with four bedrooms and three baths, for $900 a month.

Valdez, who grew up in San Antonio as the youngest child in a family of migrant workers, said her Oak Cliff real estate plan was simple: “Buy the shittiest house because it was real inexpensive, and then I would beautify it, and nobody wants to be the worst house on the block, so you take the worst one and you start fixing it up, and then everybody starts fixing up their stuff.”

Poor as they were, her father bought a lot in the 1930s. “He built the house room by room, so it was kind of oddly shaped,” Valdez said.

“My dad kept the outside of the house looking well. He painted it, fixed the roof; he did everything himself,” Valdez said. “And my mom always had flowers and a pretty lawn, and later I found out we were one of the poorest people in the city, but I didn’t know that.”

The first thing she did when she bought the fourplex at 625 W. 10th was put up a fence for security and to keep the neighborhood riffraff from walking across the property, strewing trash. She later put up three cement barriers to protect her fence from cars in the next-door driveway that kept hitting it.

She cleared the brush and weeds. “I got poison ivy twice,” she said.

She mowed lawns, at this and other properties, “but I’m 70 now.”

She had roofs and foundations redone. She replaced an unsafe balcony. As tenants left, she added central air, replumbed, rewired. She planted fruit trees.

“I also pick my renters,” Valdez said.

“I would actually drive unannounced to their house to see how they did the outside, because if they don’t maintain at least the yard, they are not going to maintain the rest of the house,” Valdez said.

“Somebody comes in here that doesn’t know how to take care of things, or doesn’t learn, we ask them to leave,” she said. “And that’s happened twice.”

A community garden?

Some of Valdez’s properties are still mortgaged. Others are paid off, though she has used them as collateral for other purchases.

On one of her vacant lots, Valdez wants to build affordable housing. On another, she’d like to create a community garden.

About 30 years ago, Valdez purchased some acreage in rural Ellis County through the Texas Veterans Land Board. It remains undeveloped.

“Wait till you hear my plans for that one, you talk about giving back,” Valdez said without divulging her plans. “That’s after I totally finish service to the public.”

Valdez’s last purchase was an odd one.

In February 2017 she bought a small lot on Bliss Street for $2,000 from the city of Dallas. It was a parcel that had been sold at a sheriff’s auction in 2015 to the city for a little more than $10,000 after no bids were offered.

Valdez said that, as sheriff, she couldn’t buy properties at the sheriff’s auction.

But, she said, “when they’re done with the auction, they go back to the city; they are the rejects of the rejects. Then I could buy them because it was from the city.”

Bliss Street doesn’t appear to be a particularly promising lot, though the county assessor values it at $13,800.

The street is little more than a dirt road, with train tracks on one side and the back end of a hulking paper mill, which emits a rhythmic pounding day and night, nearby.

What did she see in the Bliss Street lot that others hadn’t?

“That one,” Valdez said, “the neighborhood is about to go up.”



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