Apr 12

From today’s Milwaukee Journal Schneider: Desmond’s ‘Evicted’ is a flawed masterpiece

The article misses the mark in some aspects.
 
Homes in Milwaukee’s poorest areas often can be bought for as little as $8,000, with rents running upwards of $500 a month. In virtually no time, landlords can own the properties free and clear and the rent they collect is pure profit — as long as they can collect. As succinctly put by one of the landlords featured in the book, an African-American woman named “Sherrena,” (pseudonyms are used throughout the book) “The ‘hood is good.”
 
This furthers the misperception that landlording is a “get rich quick” scheme. Sherrena made statements to Desmond that sent up red flags, at least to us in the industry,  that she was already in the throes of failure at the time of the interviews.  

Attorney Heiner Giese did the research to discover Sherrena’s identity.  She was not becoming wealthy on these properties.  Instead, Sherrena began losing her buildings to foreclosure shortly after the Desmond interviews and was out of business well before the book was published.  Many of her properties have since been razed.

However, Schneider does recognize a fact that is missed by many who look at rental housing and urban issues from the outside

 

Further, despite the book’s grim portrayal of landlords, one can only imagine how far these neighborhoods could fall if landlords weren’t there to keep at least some semblance of order. If housing laws were to squeeze the amount of money property owners could make on their rental units, they may simply abandon these homes altogether, leaving a lawless landscape devoid of structure.

 

Mar 25

Published in the 3/25/16 Milwaukee Journal
By Heiner Giese

Matthew Desmond’s book “Evicted” with the subtitle “Poverty and Profit in the American City” has generated much discussion in the Milwaukee community and among us Milwaukee landlords. We generally agree with the Journal Sentinel’s March 13 editorial calling for more discussion on how to provide decent housing for the poor.

While Desmond does an excellent job of presenting and humanizing the struggles of the poor to pay their rent, he doesn’t adequately cover the “profit” aspect of his subtitle. Out of 30 landlords interviewed, he only presents case studies on two successful ones. The marginal operators and the failed shoestring capitalists (to say nothing of the many nonprofit housing groups who have failed) are not featured.

I have been involved in housing issues for over three decades — as a former hands-on landlord, as attorney for the Apartment Association of Southeastern Wisconsin and as an attorney representing landlords (and sometimes tenants) in eviction and foreclosure court.

My clients have properties in all areas of Milwaukee and nearby suburbs. But in the inner city, many landlords have failed. I have sued them or defended them when their rental property was foreclosed on because they couldn’t make the mortgage or land contract payment because the rent money wasn’t coming in. A good chunk of the abandoned houses you’ll see when driving through central city Milwaukee were once owned by landlords.

Desmond is right in pointing to two correlating equations: difficulty paying your rent because you’re poor = getting evicted; getting evicted = getting deeper into poverty. And there is a third equation: getting evicted once = getting evicted again.

The details are not in the book but one of Desmond’s featured tenants had seven evictions filed against her in the 12 year period from 2003 through January, 2015, three of them since she was in his survey in August 2008. So ask yourself, what responsible landlord who needs the rent to pay the mortgage, the taxes, the water and sewer bill and the repair costs for the windows broken by neighborhood vandals would rent to this struggling lady?

Housing vouchers for all, so no one pays more than, say, 40% of their income for rent is an answer. Except you wonder if it is politically doable. Will John and Mary Homeowner give up some of their mortgage interest tax deduction so their government subsidy can instead help their neighbor on the other side of the tracks pay her rent?

Converting part of cash welfare benefits to a voucher for those who have an eviction record would make them more acceptable in the private rental market.

Another remedy touted by Desmond is to provide lawyers for those facing eviction. But that will not prevent eviction for the vast majority of defendants in eviction court who are behind on the rent.A lawyer can only help them delay the eviction. So they get another free month out of their landlord and who winds up paying for that “free” month? It is their low-income neighbor in the unit upstairs whose monthly rent is $50 higher than it should be to make up for the landlord’s loss. No wonder, as Desmond shows, that rents in the inner city aren’t much less than in the suburbs.

Some solutions proposed by Desmond would work, but others won’t or can’t garner legislative support in today’s political climate.

Ron Hegwood, our association president, recently wrote: “A good tenant is worth their weight in gold. How can we create more good tenants and protect and help the ones we have?” We look forward to meeting with tenant advocates and public officials to seek answers to that question.

Heiner Giese is a Milwaukee attorney who represents the Apartment Association of Southeastern Wisconsin, Inc.

Mar 19

Desmond and others have a nifty little saying “Rent eats first” that implies landlords get paid at the expense of people eating.  The truth is food stamps (SNAP/Food Shares) are given to most people and families under the poverty level while housing assistance is given to very few.  That’s why we read about evictions and homelessness and not about starvation.  In a country as wealthy and great as America, we should not be hearing of either.

One workable voucher program could be similar to food stamps where all people and families below the poverty level, in addition to food stamps, would receive a housing allotment that can only be spent on housing.

The recipients would have a choice of renting from anyone without the government saying, for example, ‘you have two small kids so you are only eligible to rent a two bedroom in the $630 price range and we will pay $500 of that’   Instead the recipient would receive a $500 housing allotment.  They then could rent a $500 place and pay nothing out of pocket or decide they want to rent a $750 three bedroom in a different neighborhood and must figure out how to pay the other $250 themselves.

Such a plan would help stabilize the private housing industry while at the same time would allow the recipients much more freedom of choice in their housing decisions.  It would also be less costly to manage than Section 8.  To achieve this the payments would have to be available to all rental owners except of course those banned due to fraud or similar.

Some of the money could come from adjusting the current W2.  As the vouchers would earmark monies for housing the volume of evictions should subside.

Mar 18

On March 7th, 2016 Matt Desmond, author of EVICTED was interviewed on the Diane Rehm NPR show, guest hosted by Tom Gjelten.  I was privileged to be an invited guest on the show.  I do not feel I did as well as I wished but am sharing it as this show was a good overview of the issues presented in the book.

EVICTED will have a huge impact on our industry for many years.    Whether that impact is positive or negative to rental housing is up to us and how we react.

Listen to NPR’s Diane Rehm Show EVICTED Interview with Matt Desmond

Mar 18

Slate magazine has a large interview with Matt Desmond, author of Evicted. You should read the article, heck you should read the book, but I’ve taken a snip from the article that I think accurately portrays Desmond’s view of owners. It is a view that I’m sure will be lost upon many as the community reacts to his writings.

It is our job, for the sake of our industry as well as for tenants, to ensure this does not happen. Much anti-landlord sentiment out there is really an anti-tenant sentiment. But we are a more politically appetizing target.

Slate:

You don’t demonize the landlords. You really emphasize how difficult the business is and how close to disaster many of these operators frequently are when they get an unexpected bill. What do you think is the most useful way for reform-minded readers, who might be tempted to villainize these people, to understand these actors?

Desmond:

I think we are letting ourselves off easy if we just say, “Oh those landlords they’re so greedy,” or “Oh these tenants are so irresponsible.” If we as a nation are going to house the vast majority of our low-income families in the private market, landlords have to be at the table. We have to understand their perspective; we have to understand their incentives. The book does not shy away from moments where landlords have massive discretion over families’ lives or where landlords drive their properties into the ground. But it also documents when landlords work with families and let them slide sometimes.

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