Feb 09

For the past couple of years, we have sold out both the spring and fall sessions of Attorney Tristan Pettit’s AASEW Landlord Tenant Law Boot Camp.

It looks like we are on track to do the same for the upcoming February 18th, 2017 Boot Camp.

Last fall I waited too long to sign up my new staff members and could not get them in. I signed up three staff people very early for this one. ūüėČ

You may ask ‚ÄėWhy would Tim pay $537 plus wages to send three people to Boot Camp when he knows the laws so well?‚Äô

The answer is easy: One small mistake or missed opportunity will cost us far more than this. It is important that my folks know the law as WI landlord Tenant Law is not always what a reasonable person would assume it to be. And this is ever evolving, with both new laws, new interpretations by courts and new tricks by tenant advocates*. This is not the first time we’ve sent staff either.

This course is presented by Attorney Tristan Pettit. Tristan’s law practice focuses on landlord-tenant law, he is a current board member of the Apartment Association as well as former president, and drumroll please, he writes all the standard landlord tenant forms for Wisconsin Legal Blank.

If you want to go, now that my seats are secure ;-), you can sign up online or call Joy at the Association 414-276-7378 and reserve a spot.

http://www.landlordbootcamp2017.com

* Most “tenant advocates‚ÄĚ only advocate for tenants that break the rules. This ultimately costs the rest of the good tenants more in increased rents and decreased service or more noise and disruption‚Ķ but this is another story for another day.

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 ¬†‚Äúbeat the law.‚ÄĚ ¬†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‚Äôs 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. ūüėČ

Note that HUD permits and perhaps even encourage the lifetime rejection of persons with drug distribution and manufacture convictions. ¬†So it seems in HUD‚Äôs 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 ‚Äúbeat the law.‚ÄĚ

* 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 19
Over on  the ApartmentAssoc at YahooGroups list Bill Lauer wrote:
Since we use conviction records as a screening criteria, it is important to consider this in the larger societal context. The disparate impact issue starts way before someone applying for an apartment. This is a simplified version of a much longer story. The sex offender issue is different so lets make that a different discussion.
 
For example, Landlords use felony drug records to screen.  We now know that drug laws were written to unfairly punish one group over another.  For example, the sentencing differences between powder cocaine and crack cocaine.  First offenders with powder cocaine, used largely by white people, often times got off with probation.  Offenders with the same weight of crack, used largely by Black offenders, went to jail or prison. This is where the disparate impact begins.
 
Another example is the criminal  differences between alcohol use, used largely by whites,  and marijuana, used largely by young liberals and Blacks.  http://www.cnn.com/2016/03/23/politics/john-ehrlichman-richard-nixon-drug-war-blacks-hippie/
 
We know that cops overcharge so that “deals” can be made later in the process.¬† Deals usually come with reduced charges with higher fines in exchange for¬†little or no jail time.¬† If you don’t have the money, you sit in jail. We know that if you had¬† the money for a¬†lawyer¬† you could beat the charges and stay out of jail.¬† If you didn’t have the money, well, you went to jail, because there was nobody that could make the deal.¬† And of course, what groups don’t have the money for good lawyers?
 
So now enter the¬†¬†Heroin epidemic. The current form has been going on for about 10 years, about 6 in Wisconsin.¬† It is largely affecting white middle class kids.¬† They go to treatment a few times, they go to prison for possession, maybe¬†theft, prostitution, and¬†burglary.¬† They come out as felons who can’t go home to their parents, they¬†can’t get a decent job, nor decent housing. This is the push behind a lot of these changes, now, at this time.¬†You can’t give the white kids a special deal for their medical condition of addiction without applying that equally across all protected classes.
 
¬†Also, the industry’s response to being made more responsible for tenants behavior, [starting 20 years ago] coupled with easy access to¬†¬†records through the Internet have had a long term, unintended consequence that we as an industry, really need to look at.¬† As Tim says below, this is nothing that was not predictable.¬† But we weren’t proactive, so now we get to be reactive.
 
The wave of change in the criminal justice system¬†that this HUD letter¬†represents has got a lot of momentum. Its 25 years in the making.¬† Coupled with the pressure of governments to reduce the cost of prisons, we’ll see a lot more change in the upcoming¬†5 years as America empties its prisons.¬† And they all need a place to live.
 
Bill Lauer
 
I mean….If you follow Ron Johnson’s career, who in a million years would have guessed that he would be calling for more drug¬†treatment, more action, spending more money on junkie, on national TV in WAUKESHA???????¬† Sitting¬† next to Tammy Baldwin!

Bill is right.  But this is wrong.

Yes, the HUD screening directive is in response to a criminal justice system that appears skewed against racial and social minorities.

The method chosen to correct the underlying problem completely ignores the cause.  Rather, the Federal Government and the Administration made screening more complex and litigious instead of addressing unequal enforcement of criminal and municipal laws. Sure in the most egregious situations like Ferguson you see the government step in.

In general, this is another issue forced upon owners who were not the cause. This is a lot like the lead paint situation where the government permitted the use of a known dangerous product for decades, even requiring its use for some federally funded housing, before leaving most of the cost and legal challenges in the lap of the property owners.

So now owners will have to walk even more of a tightrope – rejecting far less applicants for criminal records may keep HUD happy, but then you have to deal with nuisance property concerns and worries that someone you put in may harm other tenants, employees or neighbors.

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 ‚Äúsubstantial, legitimate, nondiscriminatory interest.‚ÄĚ 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‚ÄĚ

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

ÔĽŅ
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