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.

 

Feb 27

Governor Walker is scheduled to sign AB568 into law on Monday 2/29/16.  Link to the text of the new 2016 Wisconsin Landlord Tenant  law, ACT 176   This is the third major revision to WI Landlord Tenant Law in three years.

It will take a while to digest all the implications of the new bill, even for those of us who watched it go through the legislative process over the last six months or so.

Some of the highlights:

  • The new law allows the termination of a tenancy for criminal activity. Drug dealing is one of the crimes you can evict for, but simple possession or use of drugs is not. Politically, allowing possession was necessary. But it is still disappointing that owners that wish to, still cannot expect drug free housing.  With this new tool to address problems  year leases are practical in more situations than they are today. An advantage of leases is less turn over and that should make neighborhoods more stable. Keep in mind that the Wisconsin protections for domestic abuse victims remain in place.
  • Another change affects month to month tenancies – The ability to use 5 Day notices for breaches.  Now when the tenant shows up with a pit bull you can respond with a 5 Day instead of a 14 Day.  An advantage to the tenant is they can correct their mistake and not lose their home.  This may also permit the including of late fees and other charges that the tenant owes on a 5 Day notice.  I will get clarification on this.

There are a bunch of changes that should help keep local governments a bit more in check.  This legislation:

  • Prohibits  rental property inspections except upon a complaint or as part of a program of regularly scheduled inspections conducted in compliance with state or federal law.  Think fire inspections.
  • Dramatically changes “Reinspection Fee” by limiting the the escalating fee scheme as well as allowing fees only when there was an actual, physical inspection of  the property.  Currently these fees double every 30 Days until they are six times the original fee, plus often there is no actual inspection associated with the fee. This is important as many of the abandoned and foreclosed homes in my neighborhoods appear to have ended up in that state in part due to fees imposed by Milwaukee.  The fees imposed these properties also make it harder for someone to come in, buy the property and put it back in service.
  • Prohibits rental property certification or licensing  schemes unless the requirement applies uniformly to all residential rental property owners, including owners of owner-occupied rental property.
  • The law still allows for programs such as Milwaukee’s Property Recording Ordinance, but most likely they will no longer be able to charge a fee.
  • Prohibits an occupancy or transfer of tenancy fee on a rental unit.

Time of Sale protections

  •  The bill prohibist local regulations with respect to taking title to or occupancy of property.

The new law also changes things with regards to sprinklers, historical buildings, trespass and towing.

Stay tuned as we get more information on what these changes mean to us and what lease language will be updated.

Feb 22

Bill Lauer writes on the Apartment Association email discussion group:

I was having breakfast with a friend familiar with landlord issues and we were agreeing that in this business, our tenants are our customers, low vacancy rates are cyclical, and things always change.
 
“The enemy of my customer is my enemy”.  The issues that conflict with my customer buying more product are issues that I need to be concerned about.
 
In the rental housing industry the issues that cause my tenant to not pay rent, are my issues too. We are joined at the hip.  To think otherwise is foolish.
 

I have thought about this often from a political perspective.

Why are the Democrats typically the political polar opposite to providers of lower cost housing and the Republicans often more supportive of our issues?  Every proposal that increases costs or decreases competition in that market adversely impacts the lower income residents, a constituency the the Dems purport to be theirs.  If you think about it the Dems should be the allies of rental housing.

A decade or so ago I hired former Governor Schreiber to  represent the Association at the statehouse.  More than a few people thought I lost my mind.  But it was a good choice as he understood the dynamics of the market and could explain to other Democrats how our bill was good for  the lower income families. We succeeded with a major piece of legislation at a time that even Green Bay Packer stadium financing was at a stalemate.


Tim Ballering
Jan 25

It appears the Metropolitan Omaha Property Owners Association’s lawsuit against their code enforcement will settle favorably for the owners.

1,000 Omaha rental property owners  filed a federal lawsuit in July 2013 alleging arbitrary and capricious enforcement of the city’s housing code.  Speaking to a couple of the owners their complaints are similar to ours, including the city ignoring owner occupied properties in disrepair while enforcing stringently on rental homes.

From the Federal complaint:

The City of Omaha has not adopted any specific rules, regulations, or interpretations of its very broad and general housing code. Instead, the City of Omaha has unlawfully designated the ability to make, interpret, and enforce Omaha housing law (including through unconstitutional means) on a case-by-case basis solely upon the unfettered discretion of each of its code inspectors. The system has no uniformity, consistency, or standard operating procedure and has fostered gross abuses, hardship, and violations of Federal and State Constitutional rights upon Omaha property owners. There are no adequate safeguards or protections in place and Omaha property owners are left without an adequate remedy or meaningful judicial review under State law.

Read the full complaint here.  Link to other case files

The Omaha World-Herald is reporting:

A proposed lawsuit settlement agreement between the City of Omaha and a landlord group faces questions and amendments when it goes before the Omaha City Council on Tuesday.

The agreement would settle a federal lawsuit filed against the city by the Metropolitan Omaha Property Owners Association.

The agreement includes an overhaul of the city’s ordinances and procedures on housing code enforcement.

It also includes a consent decree under which the landlords could haul the city back into U.S. District Court if the city changed those codes or procedures in the future.

 


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