By Heiner Giese, AASEW Legal Counsel
Right to Counsel
AASEW legal counsel Heiner Giese and Board member Tim Ballering have analyzed the recent report on Legal Aid and Legal Action's right-to-counsel (RTC) program in Milwaukee. The analysis was submitted to a 35 member group of judges, court commissioners, tenant advocates and social service organizations at its April 10 meeting. The group meets bimonthly on the topic of eviction diversion.
Tim Ballering and I have some comments on the Stout Risius report analyzing the right-to-counsel (RTC) program being run by Legal Aid and Legal Action (called EFM for EvictionFreeMke).
The author Neil Steinkamp did a much better job in soliciting input from housing providers than was done in his reports on RTC in Connecticut and Cleveland, also released just recently. Colleen Foley and I can claim some credit for that because a discussion we had last summer led to us inviting Steinkamp to conduct the forum in Milwaukee last September which featured an exchange of ideas between owners, attorneys from both sides and social service agencies.
The biggest shortcoming of the Milwaukee RTC report (and also for Connecticut and Cleveland) is that rent losses of owners in RTC cases are not researched. I have mentioned this in emails to Meagan, Neil and to Samira Nazem, the NCSC liaison:
One of the gripes Tim B. and I have with Neil's eviction studies . . . is that Neil says researching landlord losses has not been within the scope of a study on the benefits of Right to Counsel. Stout has now done these studies in numerous jurisdictions. Follow up studies are planned in many of them. Federal dollars are used, at least in part, to pay Stout for its work. It is only fair and necessary that future Stout eviction reports give an analysis of the economic costs to housing providers and not just an analysis of the benefits to tenants or governments.
[Tim B.’s observation about this today: Rent loss and the impact on housing due to these losses are more easily quantifiable than out-of-home foster care costs, economic value preserved by reducing migration out of Milwaukee County, cost savings related to housing social safety net responses, retained federal and state funding for Milwaukee Public Schools and cost savings related to Medicaid spending on health care. The alleged positive economic impact of migration out of Milwaukee County and on the Public Schools ignores that others would occupy the units if the RtC clients were evicted.]
Other comments we made regarding Stout’s methods were these:
Tim B. and I believe that the Stout reports on RTC should more strongly emphasize its adverse effects on “good” tenants – especially those of the same income class as persons being evicted – when rental property owners tighten their screening criteria or require increased security deposits because RTC results in delays and more unpaid rent. A resolution to this problem would be to set aside a portion of the money designated for lawyers ($20M just announced by HUD for 2023!!) for whatever weeks of “delay” RTC secures for the tenant to find new housing.
With Milwaukee experiencing record-low vacancies, hold-over renters reduce housing opportunities for others with similar housing needs.
Sealing Eviction Records
The topic of sealing eviction court records is going to get more attention. Tim B. has pointed out that while sealing can help the evicted tenant secure new housing it will have an unintended consequence for the tenants who are now competing with this person for housing in a very tight rental market.
For example, say tenant Alan with monthly income of $2400 applies for housing. Tenant Bob with income of $2200 applies the same day. Alan had two evictions in the last three years which were sealed and not known to the owner screening them both. Bob has never been evicted. The owner will logically pick Alan because of his higher income and supposed better ability to pay rent. Bob will lose out and have to keep looking for housing.
Finally, Tim B. and I are shaking our heads over Gov. Evers’ proposal in his budget bill housing package to pay $66 million to lawyers for RTC in the next biennium! The Governor did a great job in administering and distributing the ERAP money during the pandemic but, c’mon, lawyers??
How about we change that to $60M for tenants who fall behind on their rent and the remaining $6M for the RTC lawyers to settle those cases and get that money to landlords in exchange for a dismissal of the eviction?
By Dawn Anastasi, AASEW Board Member
Did you attend the latest Landlord Boot Camp in March? If not, why not?
I think the AASEW Landlord Boot Camp is one of the best values for landlords, either new or existing, out there in the market today.
If you haven't attended, you really, really don't know what you're missing. I recently attended again, after attending in the past. And I can honestly say that this continuing education is extremely valuable for my business.
If you attended in the past, you might think, "I've already gone in the past, why go again?"
Because things change constantly! It's not only new laws, but how the court commissioners interpret the existing laws.
It's a good idea to attend, or send your employees, to one of these Boot Camps every 2-3 years, or if there's a new significant law change.
Just the Q&A after the event, which lasts about an hour, is valuable because you get to bring your own questions to get addressed by an attorney.
There's nothing like this Boot Camp in the city of Milwaukee or anywhere in Wisconsin.
If you have questions about the Landlord Boot Camp, or have recently attended and have feedback, please leave your comments below.
By Gary D. Koch, Petrie + Pettit
It finally happened – we’ve had a fair housing challenge to a landlord’s refusal to accept rental assistance. In this case, it’s Wisconsin Emergency Rental Assistance (“WERA”) funds, but the lesson here is applicable to any / all assistance funding.
Under the Wisconsin Open Housing law (found at Wis. Stat. §106.50), discrimination in housing is prohibited. This includes discrimination against any “lawful source of income” (Wis. Stats. §106.50(1m)(h)). Per the Wisconsin Administrative Code, the term lawful source of income “includes, but is not limited to, lawful compensation or lawful remuneration in exchange for goods or services provided; profit from financial investments; any negotiable draft, coupon or voucher representing monetary value such as food stamps; social security; public assistance; unemployment compensation or worker’s compensation payments.” Wis. Admin. Code. DWD § 222.02(8).
In our current case, the Wisconsin Department of Workforce Development’s Equal Rights Division (ERD) has advanced the (unsubstantiated) assertion that “Rental assistance can be viewed as a lawful source of income”. Obviously, the ERD thinks that rent assistance falls into one of the definitions of lawful source of income.
This case is just in the initial stages of investigation. As it works its way through the system, beware, as with almost anything, that if you are taking an action such as refusing to accept rental assistance, our team recommends that your reasons for refusing are nondiscriminatory, non-retaliatory, and made across-the-board (i.e., for ALL tenants, not just the “problem” ones). We also recommend that your non-discriminatory, non-retaliatory, across-the-board reasons be internally documented to establish a record should one become necessary in future.
I guess we aren’t done penalizing landlords because of the pandemic.
Stay tuned!
Like this article? Check out Petrie + Pettit's website here!
Compiled By Dawn Anastasi, AASEW Board Member
Jersey City, NJ
Mayor Steve Fulop and city councilmembers James Solomon, Yousef Saleh and Frank Gilmore have been working together to develop a Right To Counsel program to aid tenants in the city who can’t afford to pay an attorney to represent them in court. The $4 million annual budget would be funded through a 1.5% development impact fee on every residential project, no matter the size. The new fees are expected to generate $20 million annually. The other $16 million would be dedicated to the city’s Affordable Housing Trust Fund.
An office of the Right to Counsel will be created under the city Department of Housing, Economic Development, and Commerce (HEDC). When residents receive an eviction notice, they will receive a free consultation on their rights and be assigned an attorney if the office determines it necessary.
Solomon said developers — and even people building one- and two-family homes — would pay the 1.5% fee based on the property’s assessment before a certificate of occupancy is awarded. He said the fee, which would be phased in, won’t affect current projects that have already received site approval, but is would be fully implemented by 2025.
Read the full article here
Detroit, MI
Taura Brown got evicted Tuesday from her tiny home, a prospect that she has faced for more than two years, but she didn't leave without a fight and a lineup of activists trying to defend her.
Bailiffs and 36th District Court representatives arrived at Brown's tiny home on Monterey Street at 10 a.m. Tuesday, but were blocked by about 30 people with Detroit Eviction Defense, an activist coalition that comprises attorneys, trade unionists and rental tenants who argue she's being unjustly ousted. The group of 30 people linked arms to create a human wall as bailiffs attempted to break through and get into the home.
Brown has been preparing for removal from her home since a district judge ruled last month that she could be evicted from the space she's lived in since December 2019. The decision on March 22 came after a two-year court battle, and Brown was ordered to vacate within 10 days.
Jacksonville, FL
A mix of renters and home owners gathered in Springfield Sunday afternoon for a rental housing crisis forum.
A speaker from the activist group Florida Rising told the forum about the idea for a tenant bill of rights.
He said the group is pushing Jacksonville city leaders to pass it, requiring the following:
1) Dedicated office of the tenant advocate
2) Create a publicly searchable landlord registry
3) Non-discriminatory rental application process
4) Notice of changes to lease
5) Fee transparency
6) Right to counsel and language access
7) Right to repair
The forum also brought up the idea of a tenant union - a group that could give voices to Jacksonville's tenants and make sure that bill of rights is followed.
By Tristan Pettit, Gary Koch & Jennifer Hayden, Petrie + Pettit
Clauses requiring tenants to provide a 60-Day Notice to terminate a month-to-month tenancy are popular – we see them in a lot of rental agreements. Recently, though, we have seen the Wisconsin Department of Agriculture, Trade and Consumer Protection (“DATCP”) take issue with provisions in rental agreements in month-to-month tenancies that require tenants to give anything more than a 28-Day Notice to terminate the tenancy.
These DATCP challenges can end one of two ways: (1) the landlord can fight the Department, or, more likely, (2) the landlord concedes and removes the clause from its rental agreements, potentially paying a fine for the pleasure of doing so.
We have not yet had a client want to fight DATCP on this issue, but we believe that there may be statutory grounds to do so.
DATCP’s argument is found in Wisconsin Administrative Code ATCP § 134.06(3)(a) (2), prohibiting withholding from the security deposit for any charges other than for “Unpaid rent for which the tenant is legally responsible, subject to s. 704.29, Stats.” (Emphasis added). DATCP believes that any notice period in excess of 28 days is illegal.
Wis. Stats. § 704.19 discusses what notices are necessary to terminate periodic tenancies (such as month-to-month tenancies). Wis. Stat. § 704.19(3) provides that “At least 28 days’ notice must be given” to terminate a month-to-month tenancy (emphasis added).
It seems straightforward that “at least” does not mean “exactly”.
Elsewhere in the same statute, we find that a month-to-month tenancy can be terminated “only by giving to the other party written notice complying with this section, unless any of the following conditions is met: (1) [t]he parties have agreed expressly upon anther method of termination and the parties’ agreement is established by clear and convincing proof.” (Emphasis added).
Again, it seems straightforward that a clause in the rental agreement calling for a 60-Day Notice to terminate the month-to-month tenancy would be clear and convincing proof that the parties have expressly agreed upon another method of termination.
Nevertheless, DATCP takes the position that landlords can ONLY require a 28-Day Notice to terminate the tenant’s month-to-month tenancy.
Do DATCP’s arguments win? That remains to be seen. It might be a serious undertaking to find out the answer, but the Landlord-Tenant team at Petrie + Pettit is ready to take on that challenge for you!
Did you find this article interesting? See more articles from Tristan's Landlord--Tenant Law Blog!
Effective March 1, 2023 -- HACM Partners with AffordableHousing.com
AffordableHousing.com is a website that used to go under the name "Go Section8". It rebranded a while ago and the Housing Authority of the City of Milwaukee (HACM) started a partnership with this site.
Rental property owners used to call or visit HACM to add their available properties to a list that the Section 8 client base could browse.
Now, new listings can be added to AffordableHousing.com at any time by the rental owner themselves, including adding pictures and other details about the property.
Prospective tenants can communicate directly through the website to rental property owners about their listings.
The first step is that a rental property owner needs to make an account on the AffordableHousing.com website.
Note that although the site is free to use, it will repeatedly ask for payment for premium services and offerings. These premium services are optional and are not required to use the site.
Come to the member event on April 17, 2023 to hear from Steve Fendt, Landlord Outreach Coordinator, to learn more about this website and more about the Rent Assistance program offered through HACM.
Wisconsin utilities are urging customers who may have gotten behind on their energy bills to apply for energy assistance or inquire about payment plans ahead of the state’s utility disconnection moratorium ending on April 15.
The main forms of energy assistance available to Wisconsinites are the Wisconsin Home Energy Assistance Program through the state, or an assistance program through the nonprofit Keep Wisconsin Warm/Cool Fund. Those programs are available to people making 60 percent or less of the state’s median household income. For example, a family of five earning $5,968 or less per month would qualify.
Last year, the state energy assistance program paid $120 million to aid households. Through March 22 this year, according to the Public Service Commission, $80.7 million funded assistance to roughly 150,000 households.
I. Activities on State Level
The Legislature's Joint Finance Committee continues work on Gov. Evers' budget. None of the Governor's proposals on housing issues (reported in the March newsletter), such as $66M for free attorneys for tenants, are likely to be adopted in present form. However, I did attend a meeting on March 23 in Madison called by Speaker Robin Vos to hear from housing providers and tenant advocates from Milwaukee and Madison. Rep. Rob Brooks, chair of the Assembly Housing Committee, participated.
His committee would draft legislation. Issues discussed were (1) defining "reasonable diligence" as used in the statutes when making attempts to serve a defendant with an eviction notice or summons and complaint in a small claims case; (2) clarifying by statute what amount of late fee is allowable; (3) modifying the tenancy notice statutes to specify that a 60 day or longer notice of termination of tenancy is permissible – a subtopic here is a prohibition on winter moveouts; and (4) creating a statute acceptable to both landlords and tenants on when eviction cases can be sealed.
There will likely be follow up meetings.
II. Activities on Local Level
A comprehensive report on Milwaukee County's Right to Counsel program being run by Legal Aid (they call it EFM, "Eviction Free Milwaukee") by Stout Risius has been published for the period September 2021 through December 2022. The report claims that providing attorneys to defendants (at a cost of $3M) has been very successful in avoiding or delaying evictions and has saved governments $9M in eviction-related social costs.
To its credit, the report acknowledges that the delays and refiling of nonpayment cases have a negative effect on owners. This results in tighter screening (hurting marginal tenants), increased security deposits demands and likely rent increases.
The biggest shortcoming of the report is that it does not acknowledge the millions of dollars in lost rent from evictions. The report does not even give statistics on how much rent is owed in the cases being handled by Legal Aid, though it says it will try to include this data in next year's report.
I had an interesting email exchange with Greg Borowski, Executive Editor of the Journal Sentinel regarding a recent tragic north side Milwaukee fire where three people died. The reporters on the first version of the story – which had a huge headline in the print edition the next day – did not check who owned the property and implied that it was a rental property without working smoke alarms. The JS tried to tie this tragedy into their series alleging dangerous electrical fires are mostly the fault of landlords. However this fire was not electrical in nature and the property was owner-occupied.
The JS corrected its false implications in a follow up story the next day.
Local News
Your AASEW Executive Board and I will have another meeting in early April with a team from the Medical College of Wisconsin on the topic of lead-safe housing.
A lot of financial resources are being dedicated to this topic so we want to give advice on how to spend the money effectively.
At the February membership meeting I gave an alert that WE Energies appeared to be improperly charging sales tax on residential gas and electric bills during the winter months. If you are paying for heat, hot water or lights for a residential unit or for an entire building check your billing since November.
Governor Evers’ Budget Proposals on Housing
Governor Evers announced a number of housing provisions in his state budget bill.
The Governor wants to eliminate landlord/tenant measures which were enacted since 2011, which the Republican leadership in the Assembly and Senate is bound to reject.
Other highlights of his program affecting rental properties are as follows:
Five million dollars to create a Housing Safety Grant Pilot Program for Milwaukee to support improvement of rental housing safety, including:
There is $100 million in funding proposed for homeowners and for municipalities to rehab blighted properties. It’s unclear if rental owners would have access to those funds.
It’s proposed that localities could impose their own moratorium on evictions [with no mention of paying owners for their lost rent] .
Another new law would require landlords to disclose serious building code violations “regardless of whether the landlord has actual knowledge of the violation.” [Of course landlords should disclose serious defects but if they haven’t seen them how can they be disclosed?]
Most concerning to us is the proposal to spend “$60 million over the biennium to create a new civil legal assistance program for low-income individuals, focusing on establishing a statewide right to counsel for evictions.”
[So lawyers would earn millions in fees. Couldn’t that money be better spent providing rent relief for the over 90% of tenants in eviction cases who have fallen behind on their rent?]
Better Regulation of Storm Water Utility Charges
You are all familiar with the storm water utility fee which shows up on your quarterly water/sewer bills. Those fees vary widely between municipalities and are sometimes unfair.
For example, Wauwatosa charges duplex owners twice as much as the owner of a single family lot while in the city of Milwaukee the charge is the same for duplexes and singles because the lot size is usually the same.
Tell your State Senator and State Representative to support a change in the law (LRB 1576) which would let the Public Service Commission regulate the often extravagant storm water charges.
Links:
First, an important correction to my January report: I had said that Emergency Rent Assistance funds were likely to run out this spring but Connor Goggans of Milwaukee County Housing Division advises that funds should be available through summer. Here is his info on the situation:
SDC/City of Milwaukee and Community Advocates/County of Milwaukee have enough ERA 2 to last thru at least most of the summer, and it is very possible County will last a bit longer than that.
Further, despite ERA, Milwaukee County will always maintain our own Eviction Prevention Program for those with rent assistance.
Of course, this is not enough, as it does not serve most renters in Milwaukee County without rent assistance … but for landlords with rent assistance households, eviction prevention financial assistance will remain an option through that program.
This will be paired with our long-awaited landlord engagement programming and financial incentives that will finally get off the ground this year (we were able to see that we hire dedicated staff for landlord engagement again this year, but are scaling the effort and have a framework for a team, instead of just one person).
Second, the City’s ZND Committee (Zoning, Neighborhoods, and Development) has again delayed any action on a proposed ordinance to require all rental properties to carry insurance.
I appeared at a hearing on January 31 to point out the flaws in this proposal. The Dept. of Neighborhood Services had reservations because of administrative costs.
Another drawback for the City is that Milwaukee would have to purchase insurance coverage for the approximately 300 rental units (non public housing) which it owns and manages.
Third, DNS (Department of Neighborhood Services) Commissioner Erica Roberts presented the outline of a pilot program to do targeted inspections for substantial health or safety issues in rentals in sub-neighborhoods of the 53206 zip code.
This would be legal if the inspections are limited but the cost of $400,000 to hire two inspectors and clerical help could not be charged to owners. However, some money could be raised from noncompliance fees.
Fourth, the meetings with the County Court’s eviction diversion liaisons are starting up again in February. We are looking at ways to promote early mediation.
State Scene
Gov. Evers will surely have a number of housing provisions in his budget proposal being announced mid-February. The Republican leadership in the Assembly and Senate is seeking input from owners and tenant advocates on issues which might get bipartisan support. We’ll keep you advised of these developments.
National Scene
The big news was The White House Blueprint for a Renters Bill of Rights announced in late January. A fact sheet can be found here. It sets forth five “Principles”:
Various federal agencies such as Consumer Protection or the FTC will study and “promote renter protections” and set “limits on egregious rent increases.”
On the topic of evictions they propose that 30 days notice should be given for nonpayment and that “eviction case filings should immediately be sealed.” Tenants should have the right to counsel in all evictions. HUD is already awarding $20M in 2023 for that purpose.
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