Jul 13

With inflation according to the Wall Street Journal: “…last month’s consumer-price index increased 5.4% from a year ago, the highest 12-month rate since August 2008.

I was in this business in the late 70s and early 80s, where inflation reached 13.3% YoY. In October 1981 a 30 year fixed FHA mortgage for a primary residence was 18.45% APR. Crazy stuff. Real unemployment was 10.8% in 1982.

For those who are unfamiliar with inflation, here is a neat little article that explains it in an interesting manner.
https://finmasters.com/how-inflation-works/

Jump down to the “Who Benefits…” section to see opportunities and dangers. (Spoiler alert – owners of leveraged physical assets with fixed rate debt typically do well)

Jun 18

The Guardian has a longer, but interesting article on the end of the CDC moratorium. I recommend reading it

Unpaid rent is a large problem. The article of course looks at this from the renter perspective, but the $50-100B of unpaid rent currently has only impacted owners due to the moratoriums.

In mid-May, 7.49 million US adults said they were not current on rent or mortgage payments and had slight or no confidence they could make next month’s payment, according to the Census Bureau’s Household Pulse Survey.

So far, the eviction moratorium has kept many of these families housed. There were 1.55m fewer eviction cases last year than would be filed in a typical year, according to an estimate by the Eviction Lab.

Without the moratorium, they will need access to the $46.55bn in rental assistance allocated by the government to help renters and landlords – though its distribution got off to a slow start.

The Guardian

The federal aid favors rural states, with few renters over urban areas. The taxpayers’ money should be distributed where the need is, not on political lines. This is a point that Heiner and I agree with Peter Hepburn of the Eviction Lab. We all need to urge Congress to fix this.

And Hepburn has found that because of the way the assistance is being allocated, more money will be available in small, rural states than in larger, urban states.

Black and Latino renters, particularly women, are disproportionately at risk of eviction and face more uncertainty as the moratorium expires.

“It was a series of omissions and mistakes that taken jointly result in a really inefficient and inequitable distribution of this money,” Hepburn said. “I don’t know that that was done with any sort of intent to disadvantage communities of color but I think it inevitably does.”

Geographically the evictions crisis will also be unevenly distributed.

In Wyoming, households can collect more than $5,167 in rental aid, while in New York’s expensive renter markets, households will have access to $766, according to his analysis.

Jun 05

As a rental property owner, it is in your self interest to work with the renter, secure Emergency Housing Assistance, and get the back rent paid.  If you evict, you no longer will be able to recover the unpaid rent through these programs.  

Only 7/10th of 1% of eviction judgments are paid within the first year, over five years that number is only 2.4%.   Smart money says, encourage your nonpaying renters to apply for Community Advocates or SDC ERAP funds. 

Rental Assistance Process | How to Apply for Rent Assistance | Community Advocates in Milwaukee WIor
Milwaukee Emergency Rental Assistance | Social Development Commission

There is an upside though to the moratorium ending, whether that end is next week or in three weeks, in that eviction, or the threat of eviction can be used to compel renters who refuse to apply for aid to do so.  Of course, there are also a few renters who are not paying and do not qualify for assistance because they have not been financially impacted by the COVID financial crisis. 

https://www.cnn.com/2021/06/03/politics/supreme-court-realtors-eviction-moratorium/index.html

The Realtor groups asked the justices to step in — on an emergency basis — arguing that “Congress never gave the CDC the staggering amount of power it now claims.”

They argue that the moratorium has resulted in “over $13 billion in unpaid rent per month.”

May 06

Evicting is so 2019.

You want the rent paid. The partners at the Rental Housing Resource Center have the resources to help your residents pay the rent. My company, Affordable Rental Associates, LLC, has adopted a mediation first policy as an alternative to eviction for a year now, with great success. Renters become current and do not move far more often than the court alternative.

If you are on the fence, look at how much that last eviction cost you in lost rent, repairs, court costs, time and aggravation. When it is all over, statistically you will collect less than 2.7% of your eviction judgment amounts over the next five years.

If you have questions, ask here, or email me directly.

Apr 25

This one-hour Harvard webinar is a well-done,  “must watch”  if you are interested in the negative impact of the COVID economic crisis on housing. 
 https://www.youtube.com/watch?v=5Ke2xkZwwYA

Apr 09

HT Tristan Pettit

This WaPo article is a good read, should read piece. The bottom line is if the rent is paid evictions for nonpayment stop, eliminating the need for moratoriums.

There was a need for stopgap measures at the beginning. Today everyone would be best served by effectively using the money that is currently available to pay for the housing of people who truly are in need.

The idea is to get the money to renters before courts nationwide begin processing evictions again.

“We are running the Emergency Rental Assistance Program every day like we’re going to lose the moratorium tomorrow,” said a Treasury Department official, who spoke on the condition of anonymity to discuss the program before any formal announcements.

Washington Post The $50 billion race to save America’s renters from eviction

Mar 07

The article linked below is so wrongly anti-housing provider. If the rent is paid, the need for free legal representation disappears in most cases. Discriminatory housing policies are not those of the property owners. We want our houses full as that is the only way we make money. Instead, for the most part, discriminatory housing policies were created years ago through government programs. But now, we are being made the scapegoat by the very governmental bodies that created this mess. 

Redlining of mortgages and insurance, leading to housing segregation or worse? These were federal government-mandated rules. https://en.wikipedia.org/wiki/Redlining

But articles like the one below try to paint property owners and managers as the causation. The truth is housing and renters must succeed for the other to succeed as well. We are two sides of the same coin. There are those who profit from encouraging conflict between owners and renters. This harms both residents and housing providers alike.

Contrary to the conclusion of the article, rental assistance is the solution. If the U.S. enacted a FoodShare for Housing program, where people below a certain threshold would receive portable housing vouchers, this would change many urban American problems. Multiple studies show the costs of such a program to the taxpayer are less than what we now pay for intervention when renters fail. 

Addressing extreme housing precarity requires more than rental assistance; it requires an overhaul of the system and redress of the longstanding discriminatory housing policies that led to this moment.

https://theappeal.org/the-lab/explainers/the-american-eviction-crisis-explained/
Mar 01

The Apartment Association, in conjunction with Community Advocates, Legal Action, Legal Aid, and many others, have been working to create a one-stop resource to help both renters and housing providers weather not only the current economic problems but to encourage sustainable, affordable rental housing.

Let’s get right to today’s big announcement: The Rental Housing Resource Center website is now live at: www.renthelpmke.org

This is THE place for you and your renters to find available financial and other help. Under the latest program up to 12 months, arrearages are covered as well as rent going forward. It is a big deal. The Resource Center is the culmination of many efforts by lots of folks hard at it for years.

I encourage you to take a look around the site and share the link with your colleagues. If you have any feedback about the site’s functionality or features you would like to see, just let me know.

Secondly, and previously announced, the Association in conjunction with the Rental Housing Resource Center partners, is having a meeting at 1 and 6 PM this Wednesday, March 3rd, where you will learn how you and your residents can apply for the Wisconsin Emergency Rental Assistance. To register, go to AASEW.org

Side note: I was a participant on the web design committee. I want to give a shoutout to Carl Cummings and his team at carldesigns.com. He did an excellent job, taking in many different design and flow viewpoints in a positive manner. Having been involved in other web design projects, this was one of the best processes I’ve seen. They also did the new site for Mediate Milwaukee.

Feb 22

[Thank you to Joe Murray for the research]

First, let me preface this that in general, I feel that Governor Evers has done well in the distribution of housing aid during the pandemic.

However, his proposed budget has a number of concerning provisions.  And how the heck does Wisconsin allows laws unrelated to spending to be part of a budget is well beyond me.

  • If passed, municipalities will be able to restrict how you screen, what you can charge, prohibit showing occupied units, making certain you lose a month or more between tenants, limit charging for damages, limit or prohibit security deposits and allow for rent abatement for minor issues.  
  • If passed municipalities will also be able to enact their own eviction moratoriums.
  • If passed, you will be inhibited from evicting for criminal activity. That should make other renters and neighbors feel safe — Not!  
  • If passed you can be required to disclose code violations “regardless of whether the landlord has actual knowledge of the violation

Actual details are below.  
—————————— 
Local landlord-tenant ordinances

Current law prohibits political subdivisions from enacting certain ordinances relating to landlords and tenants. Political subdivisions may not do any of the following:

1. Prohibit or limit landlords from obtaining or using certain information relating to a tenant or prospective tenant, including monthly household income, occupation, rental history, credit information, court records, and social security numbers.

2. Limit how far back in time a landlord may look at a prospective tenant’s credit information, conviction record, or previous housing.

3. Prohibit or limit a landlord from entering into a rental agreement with a prospective tenant while the premises are occupied by a current tenant.

4. Prohibit or limit a landlord from showing a premises to a prospective tenant during a current tenant’s tenancy.

5. Place requirements on a landlord with respect to security deposits or earnest money or inspections that are in addition to what is required under administrative rules.

6. Limit a tenant’s responsibility for any damage to or neglect of the premises.

7. Require a landlord to provide any information to tenants or to the local government any information that is not required to be provided under federal or state law.

8. Require a residential property to be inspected except under certain circumstances.

9. Impose an occupancy or transfer of tenancy fee on a rental unit.

10. Current law also prohibits political subdivisions from regulating rent abatement in a way that permits abatement for conditions other than those that materially affect the health or safety of the tenant or that substantially affect the use and occupancy of the premises. 

The budget bill eliminates all of these prohibitions.

Local moratorium on evictions

Current law prohibits political subdivisions from imposing a moratorium on landlords from pursuing evictions actions against a tenant. 

The budget bill eliminates that prohibition.

Notification of building code violations

Under current law, before entering into a lease with or accepting any earnest money or a security deposit from a prospective tenant, a landlord must disclose to the prospective tenant any building code or housing code violations of which the landlord has actual knowledge if the violation presents a significant threat to the prospective tenant’s health or safety. The bill eliminates the condition that the landlord have actual knowledge of such a violation and that the threat to the prospective tenant’s health or safety be “significant”; under the bill, the landlord must disclose to a prospective tenant a building code or housing code violation, regardless of whether the landlord has actual knowledge of the violation, if the violation presents a threat to the prospective tenant’s health or safety.

The budget bill eliminates these provisions.

Terminating a tenancy on the basis of criminal activity

Current law allows a landlord, upon providing notice to a tenant, to terminate the tenant’s tenancy, without an opportunity to cure the tenant’s default, if the tenant, a member of the tenant’s household, or a guest of the tenant 1) engages in any criminal activity that threatens the health or safety of other tenants, persons residing in the immediate vicinity of the premises, or the landlord; 2) engages in any criminal activity that threatens the right to peaceful enjoyment of the premises by other tenants or persons residing in the immediate vicinity of the premises; or 3) engages in any drug-related criminal activity on or near the premises. 

The budget bill eliminates these provisions.

Feb 08

You are permitted to forbid smoking in your units and in fact HUD has forbidden smoking in public housing since February 2017, mandatory since July 2018. HUD specifically forbids marijuana, as even though some states purport to have legalized its use, it is still federally illegal.

The Public Health Law Center has a great Q&A on this that states

Q: Can tenants smoke marijuana in multi-unit apartment buildings if they live in states where the use of medical or recreational marijuana is legal?

A: There is no absolute right to smoke medical or recreational marijuana in any state, especially when smoking impacts others. Secondhand smoke, whether from combustible or aerosolized tobacco or marijuana products, spreads throughout multi-unit dwellings. A recent U.S. study reports that even in multi-unit buildings where smoke-free policies were enforced, 50 percent of residents experienced smoke entering into their units from adjacent units. Multi-unit residential property owners have the legal authority to make their properties smoke- free, which includes prohibiting the smoking or vaping of medically prescribed marijuana in individual units and common areas, even in jurisdictions in which the use of medical marijuana is permitted by state law.

https://publichealthlawcenter.org/sites/default/files/resources/Marijuana-in-Multi-Unit-Residential-Setting-2019-1.pdf

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