Property Zoning Nightmares: How City Government Destroyed Josh Terry

A few months ago, I heard about a 29 year-old couple,  Josh Terry and his wife Jenn, who bought a building in Oak Cliff, a suburb in Dallas, Texas, and converted it into apartments, or should I say, was in the process of doing it before the city, that initially approved the project and issued many permits for it, changed their minds and shut them down.  Today, Josh Terry informed me of new developments in the story and sent me a link to the Dallas Observer’s article detailing those recent developments.

The Terrys tried to fight the ruling.  The city told them that if they didn’t like the city’s ruling, they could take it up with the Board of Adjustment.  Funny thing is, Jim Shultze, the reporter for the Dallas Observer who broke the story, discovered an interesting fact.  One of the members of the Board of Adjustment, “a gentleman by the name of Christian Chernock, had expressed an interest in buying the Terrys’ apartment building some time before” the Terrys bought it.  The article mentions that this information was confirmed by a real estate agent named Guillermo Reyes.  So how do you think the Terrys’ appeal at the Board of Adjustment went?  You guessed it, the Terrys appeal was rejected.  Anyone surprised?

So, what happens next?  The building is currently zoned for use as a single family property.  While Mr. Terry demonstrated in his presentation to the Board that it has been used as an apartment building since the 1920s, the City is still holding to its zoning judgment, leaving it completely worthless for resale.  Sure the renovations are almost completed and those renovations have improved the condition and value of the complex, but the city’s ruling eliminates all potential investors from buying this building and using it as anything but a single-family residence.  To be able to buy this apartment complex and make it work, a buyer would have to have a lot of pull in city hall, especially on the Board of Adjustments, of which, Christian Chernock is a member.

Imagine the investment opportunities that you could take advantage of if you could find an apartment complex that an investor recently bought and is currently renovating, wait for the renovations to occur, then persuade the city to rezone it making it useless to the investor, leaving the owner no choice but to sell it at a deep loss.  Then, imagine being able to buy the newly renovated apartment complex at a deep discount and somehow persuade the Board of Adjustment to allow it to be used as an apartment complex once again.  You may not have to imagine it.  But you have to ask yourself, is this the Christian thing to do?

So, the big question is, “what happens to Josh and Jenn Terry?”  As readers of this blog, I hope they’ll add their comments and insight regarding the events that happened.  I wish them the best of luck and while they may be beat, I’m betting they’re far from beaten.  They are currently challenging this action in court.  Hopefully they can recoup their damages and prevent this from happening to other investors.


On Tuesday (Oct. 19, 2010), the city Board of Adjustment failed to overturn a building official’s decision

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