By Dawn Anastasi, RPA Board Member
With the recent discussion from the government about implementing rent control on a federal level, there's been some articles and discussion refuting that this would be a good idea.
Here is a fantastic article about how Rent Control would not work in the long term and why:
Rent Control Recidivism
Here are some excerpts:
Rent control undermines landlords’ incentives to provide the services tenants want, because it denies landlords the ability to receive adequate compensation to make their efforts worthwhile.
There seems to be a mistaken belief in some circles that 100% of the rent collected by a property owner goes into that owner's pocket. This ignores all the expenses that go into running a property, which include property taxes, insurance, routine maintenance, lawn care, utilities, etc.
Anyone who does a non-volunteer job generally expects to be paid. Rental property owners are no exception.
But as Swedish economist Assar Lindbeck asserted, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”
The article highlights the three key points why Rent Control is a mistake:
By Attorney Heiner Giese
The attached is a comment submitted to the Federal Housing Finance Administration by Goodman Real Estate, owner of a 254 unit low income housing building in Seattle.
It is very succinct -- readable charts showing how a formerly profitable building declined dramatically from 2018 to 2022 due to various "tenant friendly" laws passed by the State of Washington and the City of Seattle.
Attachment
I submitted the following comment on behalf of the RPA to the Federal Housing Finance Administration's Request for Input (RFI) regarding the creation of tenant protections at multifamily properties with FHFA-backed mortgages:
The attached two files are a comprehensive study of all 1,101 residential eviction actions filed in Milwaukee County, Wisconsin in December 2019. The study was published in March 2022 with December 2019 being selected because it was the last month without the need to consider the effects of the Covid-19 pandemic.
The study confirms much academic and other research which establishes that well over 90% of all evictions are filed due to nonpayment of rent. The study refutes a misleading narrative that evictions are often filed for $500 or less of rent delinquencies. Conversely, our study shows $1,436 as the average amount requested in an eviction complaint and $2,672 as the average judgment granted for lost rent and damages.
The study refers to other research which refutes the narrative about Milwaukee landlord “Sherrena” presented in Matthew Desmond’s widely read book EVICTED. Desmond asserted that this landlord renting to low income tenants was operating a very lucrative rental property business. However, she had brought over 70 evictions and actually lost all 18 of her properties to mortgage and tax foreclosures.
Any measure of increased tenant protections must consider that lengthening the time a nonpaying tenant can stay in a property will increase costs and result in higher rents to other low income tenants.
RPA Eviction Study
Compiled by Dawn Anastasi, RPA Board Member
St. Petersburg, FL -- Effective July 1, a new Florida law forbids municipalities from regulating tenant-landlord relationships, including ordinances that carve out stronger protections for renters. St. Petersburg officials recently began the process of repealing its own Tenant Bill of Rights to comply with state law.
Read the full article here
Los Angeles, CA -- LA tenants have until August 1 to pay 18 months of back rent.
Daniel Yukelson, executive director of the Apartment Association of Greater Los Angeles, said tenants have known for nearly three years they would need to repay back rent.
“During that entire time, some have not made any attempts to repay their obligations, and simply have waited around for some miracle to make a large, lump sum payment, which they are unlikely able to do,” Yukelson told the Daily News in an email. “It is time for the city of Los Angeles to stop babysitting these adults.”
Jersey City, NJ -- A group of landlords wants to overturn Jersey City’s “right-to-counsel” legislation, which would provide free lawyers to renters facing eviction by 2025.
The Jersey City Council passed a pair of ordinances last month guaranteeing low-income tenants free legal representation in housing court, using future developers’ fees to pay for it. On Wednesday, the Jersey City Property Owners’ Association sued the city, claiming the new rules exceeded the city’s taxing authority and its municipal powers conferred by the state.
“It’s a tremendous intrusion into private contractual rights,” said Charles Gormally, an attorney representing the association.
The civil complaint was filed in Hudson County Superior Court and alleges the city is creating a new form of taxation that only benefits a group of private residents: tenants who make 80% or less of the area's median income and are eligible for free counsel.
On July 13, 2023, legislators in the U.S. House of Representatives reintroduced the Choice in Affordable Housing Act (H.R.4606).
If enacted, the bill would:
Full Article from the National Apartment Association
See the full article here: White House Press Release
Today, President Biden is announcing a new front in his crackdown on junk fees: rental housing. From repeated rental application fees to surprise “convenience fees,” millions of families incur burdensome costs in the rental application process and throughout the duration of their lease.
These fees are often more than the actual cost of providing the service, or are added onto rents to cover services that renters assume are included—or that they don’t even want.
Today, the President will outline several new, concrete steps in the Administration’s effort to crack down on rental junk fees and lower costs for renters, including:
These companies are making the following announcements:
Zillow is today launching a Cost of Renting Summary on its active apartment listings, empowering the 28 million unique monthly users on its rental platform with clear information on the cost of renting. This new tool will enable renters to easily find out the total cost of renting an apartment from the outset, including all monthly costs and one-time costs, like security deposits and application fees.
Apartments.com is announcing that this year it will launch a new calculator on its platform that will help renters determine the all-in price of a desired unit. This will include all up-front costs as well as recurring monthly rents and fees. The Apartments.com Network currently lists almost 1.5 million active availabilities across more than 385,000 properties.
AffordableHousing.com, the nation’s largest online platform dedicated solely to affordable housing, will require owners to disclose all refundable and non-refundable fees and charges upfront in their listings. It will launch a new “Trusted Owner” badge that protects renters from being charged junk fees by identifying owners who have a history of adhering to best practices, including commitment to reasonable fee limits, no junk fees, and full fee disclosure.
On May 30, the Federal Housing Finance Agency (FHFA) issued a Request for Input on tenant protections. This exercise could result in the adoption of a range of negative policies including national rent control, a “source of income” mandate requiring acceptance of Section 8 vouchers, just cause eviction requirements that effectively prohibit nonrenewals, and extended notice procedures for residents in federally-backed properties, to name a few.
As the FHFA considers expanding federal landlord and tenant requirements on Fannie Mae and Freddie Mac-backed properties, it is essential for members of the rental housing industry like you to provide perspective about your business practices.
The feedback FHFA receives will inform their future decision-making, so it is critical that the agency hears directly from our industry. This is your chance to engage directly to protect your business and your communities from potential harmful policies!
The deadline to submit comments is July 31.
Take action TODAY!
Deputy Chief Judge William Pocan has announced that small claims cases in Milwaukee County will return to in-person hearings starting Monday, August 14.
The schedule will be the same as before COVID: Collection cases in the AM, Return date for evictions at 1:30 and adjourned eviction cases at 2:30. Also (good news!) affidavits of noncompliance will be taken as walk-ins at 2:30 daily.
At 11:00 AM is the time set for walk-ins asking for a case to be reopened. This will mostly be tenants but could be landlords who maybe missed a return date and had their case dismissed.
There will be three commissioners assigned to return date and adjourned date hearings and a fourth commissioner iin SC4 will conduct trials.
Judge Pocan said that requests could still be made to appear via Zoom. He gave examples of illness, no child care, etc. and in those cases the CC will have a screen in their hearing room to allow participation via Zoom.
An article published today by the Journal Sentinel states:
Milwaukee County is looking for new ways to get landlords to accept more renters who use housing vouchers.
The article also included a statement from Milwaukee County Board Supervisor Shawn Rolland:
"If Milwaukee County cannot use a metaphorical stick to force landlords to accept tenants with a Section 8 voucher, then we should consider offering a carrot," Rolland told the Journal Sentinel.
However, I don't think Milwaukee County is taking into account the Housing Authority's own statement (as mentioned in my previous blog article) that the HACM Section 8 program has over 15,000 people on the waiting list.
Isn't the actual problem that there's not enough housing vouchers for everyone who wants one?
What did you think when you read this article? Share your thoughts in the comments below.
The eviction moratorium which ended in August 2021 is still having some aftereffects. A major Milwaukee nonprofit housing provider has gone into receivership. One of Heartland Housing's developments is the St. Anthony's apartments for the homeless at 1004 N. 10th St. Four other apartment complexes are also in the receivership.
A Milwaukee apartment development for homeless people faces questions (jsonline.com, Subscribers Only)
The problems at St. Anthony's are partly tied to the 2020-'21 federal evictions moratorium. It was enacted after unemployment soared during the COVID-19 pandemic. The moratorium, along with property management issues, caused rent collections to fall short, said Don Laackman, chief program officer at Heartland Alliance. The Chicago-based nonprofit social services provider is the parent of Heartland Housing.
The problems at St. Anthony's are partly tied to the 2020-'21 federal evictions moratorium. It was enacted after unemployment soared during the COVID-19 pandemic.
The moratorium, along with property management issues, caused rent collections to fall short, said Don Laackman, chief program officer at Heartland Alliance. The Chicago-based nonprofit social services provider is the parent of Heartland Housing.
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