Jul 03

A reader writes of the frustration he was having after being charged by the city for mattresses dumped at his property that were not from his tenants.  With the ever exploding bedbug problems in urban areas, there are a lot more mattresses hitting the garbage.

We had a similar problem with properties in Milwaukee.  At one property mattresses would appear behind it once a month or so even though there were no move outs.  We would the get gigged for the $100 repeat litter fine even though we had our clean out crew drive past the property every couple of days and remove any trash well before getting notified by the city.   Somehow it seemed the city inspector was there the day the mattress was dropped off each month.

I wanted to catch who ever was dropping the mattresses in the act so I bought a trail camera and mounted it to view the garbage area.  Mattresses quit appearing immediately after that.  We have since installed trial cameras or wifi cameras at a number of locations.  The problems generally stopped upon installation (deterrent effect)  In one case we caught a neighbor who is a small contractor dumping.  He quit after being given a picture of him unloading his truck in the garbage cart area of our property.  I’m sure he is now dumping at someone else’s property to avoid paying the construction debris fees at the self help dump.  Most bad happens after dark so Infrared (IR) technology is important for night vision.

An example of a trail camera that uses an SD memory card to record images.  We have a number of the Moultrie cameras.  In fact they were being sold in the sporting goods section of Wal Mart at a similar price to Amazon.

A 64GB card holds a lot of images.  Set it to overwrite when full and then retrieve the card when there is a problem.  These can be mounted anywhere as they are battery powered. A set of batteries lasts three months or so.

If you have a cooperative tenant with internet or provide internet to your building, the other choice is wifi enabled security cameras.  The under $100 ones need to be building mounted for the power, but you can upload to cloud storage and keep a month’s worth of images or movies.

Netgear makes a battery powered wifi camera system that intrigues me, but haven’t bought any yet.

Why do my Amazon links start with smile instead of www?  AmazonSmile donates a portion of the sale to any charity you select.  I chose Children’s Hospital of WI, but there are a million 501 (c) (3) organizations that you can choose from.

 

May 02

A reader suggests  (copy below) that much of the conversation regarding the new HUD directive on the use of criminal records in tenant screening is an attempt to  “beat the law.”  It is not.  Rather it is seeking to answer the question of how do rental owners reduce the disruption and danger of crime at their properties while also addressing the concerns of local governments and neighbors by avoiding renting to those prone to criminal activity.

Back in 2001 our company set a screening criteria that we used with only minor adjustments since.  (Copy Below) This was based on researching our failed tenants.  At that time, we found that misdemeanor convictions and evictions appeared impactful if they occurred within the past three years and felonies for drugs and violence in the past seven years.  I was surprised while reading HUD’s directive on the use of criminal records for screening that it references a report* that states the recidivism rate of criminals drops to the incidents of criminal activity in the general population at 6-7 years.  I guess we got that one right from our own data, without the fancy formulas used by the researchers. 😉

Note that HUD permits and perhaps even encourage the lifetime rejection of persons with drug distribution and manufacture convictions.  So it seems in HUD’s view, a kid with a misdemeanor possession with intent to distribute conviction can be excluded for is life, while the violent person only for a “reasonable” period of time and the habitual thief never. I question whether permitting the exclusion for drug crimes was done out of recidivism data or if it was a case of political will. I know people who have had drug issues and have overcome those problems to lead productive and successful lives.  Many of those charged with possession with intent to deliver often are simply users or addicts selling small amounts to support their habits.

Back when researching our current criteria we recognized that some applicants with criminal histories did not cause future problems. How do you identify those who were not a risk, from those who are?  We chose to accept those with a letter of recommendation from their PO despite having convictions. In the fifteen or so years since that policy has been in place, we found applicants with the PO recommendation have a failure rate below that of general applicants.  It is unlikely that a PO would put their name to paper if they did not believe in the client.

Our company’s existing screening criteria seemed to be close to the requirements under the HUD April 4th directive. We had to modify it to exclude simple possession drug convictions and theft convictions as  disqualifiers.  While I believe that both are indicators of tenancies that may fail, neither are permitted today.  We also reduced the lookback period on felonies from seven years to six.  The report  HUD based their finding on said 6-7 years.   I do not want to be arguing over being at the top end. And finally, we added more options than PO letters, although PO letters will remain an automatic qualifier if our other criteria are met.  Our revised criminal screening is attached below.  Use it at your own risk if you wish and remember that I am just a landlord, not an attorney.

The part of the challenge is municipalities attempt to shift responsibility for criminal acts from the criminal to the owner of the house they live in through nuisance ordinances.  These laws encouraged owners to have strict no criminal screening policies.

If you go to neighborhood meetings, you will find that most people who live in neighborhoods where your properties are located will be angry if you rent to anyone with a criminal history regardless of the charge or how long ago it was.

This attempt by HUD to solve a problem that was not created by the housing industry (discriminatory law enforcement) creates a solution that makes screening and complying with nuisance laws far more difficult and far more prone to litigation.

All this leads to a tough balancing act for the property owners – far more difficult and involved than simply trying to “beat the law.”

* Megan C. Kurlychek et al., Scarlet Letters and Recidivism: Does an Old Criminal Record Predict Future Offending?, 5 Criminology and Pub. Pol’y 483 (2006) (reporting that after six or seven years without reoffending, the risk of new offenses by persons with a prior criminal history begins to approximate the risk of new offenses among persons with no criminal record).

http://www.albany.edu/bushway_research/publications/Kurlychek_et_al_2006.pdf

Affordable Rental Associates’ Revised Screening Criteria (To open the conversation, not for your use without your attorney’s review):
  • Municipal Convictions* related to manufacturing or distributing a controlled substance, crimes that indicate a demonstrable risk to the safety or peaceful enjoyment of residents or neighbors, and/or property damage: No convictions in 2 years.
  • Misdemeanor Convictions* related to manufacturing or distributing a controlled substance, crimes that indicate a demonstrable risk to the safety or peaceful enjoyment of residents or neighbors, and/or property damage: No convictions in 3 years.
  • Felony Convictions* related to manufacturing or distributing a controlled substance, crimes that indicate a demonstrable risk to the safety or peaceful enjoyment of residents or neighbors, and/or property damage: The latter of 6 years after conviction or 4 years after release from custody
  • Unresolved Cases* related to manufacturing or distributing a controlled substance, crimes that indicate a demonstrable risk to the safety or peaceful enjoyment of residents or neighbors, and/or property damage or charges that may result in imprisonment for more than 15 days: Application will be considered after resolution of the case.
    * Criminal record exception will be made for applicants with otherwise acceptable rental history and income upon positive written reference from their Parole Agent or other official on government letterhead. Other factors may be considered on a case by case basis. It is the responsibility of the applicant to supply any supporting information and documentation
Bill Writes

Much of the conversation I hear about this new directive is about figuring out ways to beat the law. I’m sure we landlords will come up with something and our lawyers will try to protect us.  But lets be realistic.  Most rental policies look back 3-5 years. Each town is different,  but most people returning from incarceration can only afford to live in low income neighborhoods. Much of this won’t apply to the higher end of the market.

Here is a little recognized fact.  About 50% of the people leaving Wisconsin prisons are Caucasians! With the increase of drug felonies and prison time courtesy of the Heroin epidemic, more are released to places like Waukesha, Appleton, Wausau, Green Bay, Janesville, La Crosse, Stevens Point than ever before.  Its true Milwaukee has a larger racial component that other parts of the state, but the fact remains, people returning from incarceration will likely live in rentals in the low income neighborhoods of your city. They make up a significant portion of the tenant pool.  Figuring out a good way to bring these people back into the market is good business.

So why not  define the best practices way of working with our tenants?   HUD issued a letter [ Notice PIH 2015-19] in 2015 to the Public Housing Authorities doing just that for PHA’s http://portal.hud.gov/hudportal/documents/huddoc?id=PIH2015-19.pdf

Not all of this applies to us private landlords, but we can come up with our own list, run it by the attorneys, and Fair Housing.  Please email me your thoughts at billtoday43@aol.com.
In some neighborhoods the percentage of people without criminal history is much smaller than those that do.  

Second interesting fact. Most people do not re offend.  Recidivism is steadily going down in Wisconsin.  Most of the people sent back to prison are for crimeless revocations, meaning that a P.O. sent them back because of a rule violation, not a new crime. While caution in rental practices is warranted, fear is not.

Lastly, Felons are among us!!!  Its estimated that about 700,000 felons live in Wisconsin and they don’t all live in Milwaukee!  But most will live in low income neighborhoods. People on supervision make better tenants than those who are not because the fear of going back is a greater influence on current behavior.  They usually double up with family, friends, spouses, or partners. Anybody who owns property in these neighborhoods know the signs.  So lets be the leaders we are and get in front of this!

Apr 12

Last week HUD issued a directive on the use of criminal records in tenant screening.  On the surface, this ruling would prohibit blanket rejections for criminal records, ostensibly including a blanket prohibition against sex offenders.

Renting to registered sex offenders cause anxiety for your neighbors. And I do not disagree with their sentiments.  I would not have wanted someone on the registry living next to me when my children were small and I certainly would not want one living next to my grandchildren today.

I expressed my concern that owners would have to begin accepting  sex offenders to AASEW General Counsel, Heiner Giese.  Heiner brought to my attention that in Milwaukee only 55 properties meet the Milwaukee Sex Offender Residency rule.  The rule penalizes the offender, not the property owners.

If your properties are outside of Milwaukee you may be required to accept sex offenders under the HUD directive.  However, this HUD rule was implemented to address disparate impact of such screening processes as they impact existing protected classes.  It does create a new protected class per se.  Most sex offenders are White males which should make this less of an issue under the April 4th, 2016 HUD Fair Housing letter.

Some people are very passionate on these issues as the recent FaceBook discussion regarding screening for criminals shows. There is, of course, many larger issues with the sex offender registry.  The two kids experimenting in the back of the Chevy probably should not be branded for life on an offender registry.  Remember that 48% of kids have had sex by the time they are 17.  The first sex offender in WI was a case similar to this in Palmyra.

Not that I am an advocate for sex offenders, Affordable had a prohibition against sex offenders renting from us for as nearly as long as the registry existed, but the abundance of residency restrictions will ultimately cause politicians or judges will make them a protected class.  Then all owners, including government housing, will have to rent to them unrestricted throughout the community.

Miami adopted a similar 2,500-foot restriction in 2006.  This resulted in the sex offenders forming a cardboard box camp under the bridges of the Julia Tuttle Causeway, I-195.  In 2010, the city of Miami bulldozed the camp.  It then cost the city $1000 per month per offender that was relocated to house them in hotels.  256 offenders stopped reporting their addresses in the process.

People smarter than me need to find the answer but trust that it will become a problem for everyone if left unaddressed.

 

Apr 05

On April 4th, 2016 HUD guidelines on the use of criminal records in tenant screening were released. This is a game changer that negates much of what was achieved with the crime-free portion of Wisconsin 2015 ACT 176. It also impacts all screening.

No longer can arrests be considered in screening. Convictions may be considered, but only those convictions that directly relate to the safety of the property or its residents.

“A housing provider with a more tailored policy or practice that excludes individuals with only certain types of convictions must still prove that its policy is necessary to serve a “substantial, legitimate, nondiscriminatory interest.” To do this, a housing provider must show that its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and/or property and criminal conduct that does not”

Amazingly the directive does not appear to allow consideration of neighbors safety, only residents. So does this mean an axe murdering rapist drug dealing member of the local street gang must be allowed to rent any single family as long as they meet your income guides?

The real losers in this will be the law-abiding tenants and their neighbors

Mar 01

Governor Walker signs AB 568

AB 568 was signed into law on 2/29/2016 as WI ACT 176
 
Present at the signing were Attorney Tristan Pettit, to your left, WI Governor Walker’s right. Tristan presents the AASEW Landlord Tenant Law Boot Camp.
 
To your right, Governor’s left, is Joe Murray, the AASEW lobbyist.
 
Tristan and Joe, along with AASEW Attorney Heiner Giese and folks from the WAA, led by Gary Goyke, did a lot of work on this bill.
Feb 28

Yesterday I wrote about 2016 revision to the Wisconsin Landlord Tenant Law.  Over on FaceBook Brian Peters, whom I respect, responded.  I thought the discussion warranted bringing it over here for those who do not follow me on FaceBook.

Brian Peters Unfortunately, those changes, along with other changes in past, allow for abuses by bad landlords. Which is why I’ve been calling them the Slumlord Protection Acts.

For example, you mentioned drugs. I doubt people who do “white collar” crimes will find themselves tossed out. This will impact some people more than others.

This provision is also dangerous as it makes it easier for a landlord’s prejudices to come into play.  

Finally, do you really want landlords to be in that position? You once told me about how community prejudices would cause calls to building inspectors. Do you really want calls from neighbors claiming they saw suspicious activities and demanding you evict the person?

My response to Brian was as follows:

While you and I often agree on many issues, I think you have this one wrong.   

The notion that landlords enjoy or profit from evictions is a myth perpetrated by those with a bias against landlords or rental housing.  The typical eviction costs the owner at least two months rent, court fees and damage to the property. I have yet to meet an owner who enjoys the process or comes out ahead. Landlord’s prejudices, although rare today, most likely appear in the application selection process.   This law will not add to nor prevent this.
 
Owners already face demands by neighbors and city officials to evict for activity where there has been no arrest or even credible evidence that the tenant is engaged in wrong doing.  This provision will not add to nor prevent this as it is the result of the neighbors’ prejudices that elected officials willingly participate in hopes of getting reelected.  This is a nationwide issue. Google Minority Threat Theory to read many scholarly articles on this, or read the work of Matt Desmond that was based on his work in Milwaukee. Matt will be in Milwaukee for a book signing on Tuesday.  I will email you a copy of our HUD complaint.
 

The new law does not allow for eviction for use or simple possession, which actually makes it harder to evict by invalidating the Cobbs case, which permitted eviction for simple possession or use in Section 8 Housing 

The change in the law however allows owners to act when there is a major problem.  I would expect that you would want an owner to address rampant drug dealing or the violent person next door to your home.  This change allows that to happen easier, but contains protections for the tenant.

One change included that I wanted is the one that permits the use of 5 Day notices to address lease violation in month to month tenancies.  The law, as it was, only permitted the use of a 14 Day termination without the tenant having the right to cure when a month to month tenant violated the rental agreement.  Now we can give the tenant a 5 Day to address things like the pit bull they brought home.  If the tenant removes the dog, then they cannot be evicted and everyone wins.
Brian replies:

How does it benefit the tenant to not have the opportunity to cure the violation?

I was imprecise with my language earlier, BTW-good that you clarified it for anyone reading this.

Tim:

You have this backwards. The new law ADDS a right to cure notice for month to month breaches where none existed before.

We championed the addition of the right to cure notice because our industry wants to avoid evictions when possible, but we also want disruptive removed as soon as possible if they will not make the correction. Remember all evictions are costly to both landlord and tenant.

Brian:

I realize that. I guess you see the bad tenants while I see the bad landlords so we both have our perspectives.

Tim

Actually I see very few bad tenants. While some fail due to economic fragility, I would not call them bad. Out of approx a thousand tenants last year, it looks like we evicted 7 during the year that would be considered bad.

Tenants and landlords need each other just as Clownfish and anemones need each other. A quick view of this is at the post: The enemy of my customer is…. Of course it is more complex than that.

Both sides need to be careful not to be played by people who try to create strife between us only due to their dislike of tenants for reasons unrelated to housing.
Feb 25

A reader writes:

I was in one of my units the other day working on a plumbing problem. I noticed a strong smell of Pot, as I was walking from the kitchen to the bathroom I could smell the pot even stronger. I noticed There was an extension cord going into the living room closet. I looked inside the closet and there was a heat lamp a grow light and aluminum foil around the walls with a nice big plant of pot.

I called the police, when they came they advised me that there was nothing they could do since I found it with an illegal search. I explained to them that I have the right to inspect my units for damage or illegal activity. They said there was nothing they could do except watch the place and tell inspectors about the activity.

The police were wise not to make an arrest based on your discovery. The search would be invalid for the police to make an arrest, but that does not mean you did anything illegal as long as you properly noticed the tenant that you would be entering the property. Although seeing that you were there for plumbing you may wish to say you thought you smelled a strong sewerage odor and instead pot. 😉

 

The reason is a published Wisconsin Supreme Court case on landlords allowing police to search their tenants unit without a warrant, State, v. KIEFFER

¶ 45 For the foregoing reasons, we conclude that Garlock [the landlord] lacked actual authority to consent to a search of the defendant’s living area.   In addition, we conclude that the police made insufficient inquiry and thus could not reasonably rely upon Garlock’s apparent authority to consent to a search of the loft area.   Our conclusions on the Fourth Amendment questions render the initial entry and search constitutionally invalid, and thus avoid a need to address the other issues raised by the defendant.

You, assuming of course that you gave proper notice prior to entering the property, can evict based on this accidental finding.

Aug 15

Milwaukee’s wave of violent crime has not subsided.

Yesterday (8-14-15) a unit prep crew for one of the other larger Southside owners were robbed at gun point while unloading their van at 8:30 AM.  The crime happened on 24th and Maple.

One work suffered serious injuries from being struck with an iron bar across the face. The guy has a broken lower jaw, upper jaw, nose and eye socket.

What did the thieves get from this violent attack?  $40.  They did not even steal any tools.  What was the most the criminals could have expected to get robbing a couple of apartment painters art work?  Maybe… $40.  WTF.  Who robs paint crews at 8:30 in the morning?

Two guys in a grey Hyundai were driving slowly down the street, as though they were looking for an address.  They pulled in and parked a couple of car lengths ahead of the worker’s van.  Two workers were unloading the stuff they needed to finish the prep.

One of the bad guys calmly walked up to a worker and asked him for a light for his cigarette.  The worker gets out his lighter, looks up and sees the gun.  Fixated on the gun, as you would be, he doesn’t see the other guy until he was struck in the face with the iron bar. Had the worker turned his head he could have been hit across the back of the neck.

The worker never had a chance to simply hand over his wallet. These criminals were willing to possibly kill someone for a couple of dollars.

How do you even protect yourself in a situation like this?   Even if the worker had a carry permit, there would have been no time to react between this being a stranger looking for a light and a violent attack.

Later that same day two people were shot in a robbery on 34th and Lincoln. A few days earlier and a few blocks east, a ten year old was shot in his own home as bad guys decided to shoot out in the street outside.  Things are seriously headed in the wrong direction.

I used to walk the neighborhood that are properties are located in every chance I got.  Today walking what use to be the fairly safe Southside, would be insane. We are close to eclipsing Detroit as the most depressed city in America.

May 13

Bloomberg has an article based on the U.S. Department of Labor report on how many people die at work, and why. (Click “as a percent”  and “violence or homicide” in the third chart)

As far as total number of deaths, landlords rank near the bottom, but as a percentage of those on the job deaths that are violent death, we are #4.  Still, it is more dangerous to be a cashier, which should be motivation for not taking cash in your business. At least it is at mine. 

Milwaukee has seen a couple of landlords murdered while working on their properties over the past few years.

 “Let’s be careful out there.” Sgt. Esterhaus, Hill Street Blues 1981

violent crimes against landlords

Mar 12

The Housing Authority, with support from the Apartment Association wins an important decision on eviction for drug activity.

The Apartment Association of Southeastern WI  filed an Amicus Curiae ( legal-dictionary.thefreedictionary.com/amicus+curiae ) brief in support of the City Housing Authority.   

The brief filed was jointly on behalf of the Apartment Association and the Wisconsin Association of Housing Authorities was drafted by AASEW attorney Heiner Giese.  It is a fun read:

A. Hard Cases Make Bad Law

We start with a disabled 62 year old public housing tenant in the City of Milwaukee. He was perhaps smoking a bit of weed in his own apartment, doing it quietly, and when the security officer knocked on his door to ask, “What’s that smell?” he understandably didn’t let the officer in. And for this small, albeit criminal transgression (we are in Wisconsin, not Colorado!) his Housing Authority landlord serves him with an eviction notice.  

The Wisconsin Supreme Court writes:

Tenants will have an incentive not to use illegal drugs in the first instance if they can be evicted for, and given no right to cure, drug-related criminal activity. The potential to be evicted for any drug-related criminal activity, including a first offense, provides a powerful incentive to avoid such activity. See Rucker, 535 U.S. at 134 (citing Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 14 (1991)) (“Strict liability maximizes deterrence . . . .”). By contrast, if a landlord were required to give a “free pass” on a tenant’s first drug offense, tenants would have little incentive not to use illegal drugs because if they are caught, they can just promise not to do it again. For the other tenants of the building, this after-the- fact promise is far from a remedy for completed criminal activity and “‘stan[ds] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.'” See Barnett Bank, 517 U.S. at 31 (quoting Hines, 312 U.S. at 67). The objective of Congress is to provide safe, drug-free public housing, not to provide housing that allows criminal drug activity so long as the offender promises not to do it again.

  

http://www.jsonline.com/news/milwaukee/supreme-court-upholds-milwaukee-mans-eviction-over-smoking-pot-b99460952z1-296077981.html

Tim Ballering

Tim@ApartmentsMilwaukee.com

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