Aug 10

https://www.pbs.org/newshour/show/could-federal-investment-prevent-an-eviction-crisis

DESMOND: In June, cities like Cleveland and Milwaukee saw evictions spike 30 to 40 percent above normal level when moratoriums expired.

[Ignores a greater than 30% overall decrease in 2020 evictions – Tim]

DESMOND: And it also doesn’t solve the landlord’s financial problems. You know, eviction right now, though, is kind of the only tool we’ve given to landlords, right? We haven’t seen a serious investment in housing from the federal government.

[Agreed – Tim]

DESMOND: And so when you’re a landlord and you’re in a pinch, you kind of reach for that pink slip.

[No landlord wants or wins when there is an eviction, rather they generally never recover the money lost. An eviction is either failure to screen or the tenant met with circumstances afterward. – Tim]

DESMOND: You know, we need a national moratorium on evictions. We need to say, look, in this pandemic, the home is medicine. The home is safety. And we have to protect that. Americans deserve that level of protection. Property owners need to pay their bills, too. And so we don’t just need moratoriums. We also need rent relief.

[There is no need for a moratorium if proper need-based rent subsidies are in place. Agreed that property owners need to pay their bills. The outcome if they cant is chronicled at https://bit.ly/MoratoriumImpact – Tim]

DESMOND: We need a serious investment from the federal government with the recognition that everyone needs a stable, affordable place to live in normal times and especially during this pandemic. That’s true.

[Agreed – Tim]

Aug 07

I encourage everyone to download and read the following published research paper

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3641859

“Our research shows that in order to keep rental housing affordable and sustainable for low-income families, lawmakers have to walk a fine line in determining what will benefit the tenant and what may ultimately be detrimental to them,” Shen said. “On the surface, strict landlord regulation sounds good for tenants, but our paper points out, the solution isn’t that simple. The research suggests that conventional thinking on the issue of more regulation may have the opposite effect on tenants.”

“Though advocating for tenant rights seems noble and the right thing to do, the resulting consequences could have a devastating impact on this vulnerable population,” Shen said.

“Our research indicates that if landlords aren’t allowed to evict, rent will likely increase to compensate for their losses. The housing supply would diminish, though the demand would still exist. These landlords may choose alternative investments if owning property is no longer feasible. A reduced housing supply would mean less competition, which would drive up the cost of rent for everyone.

Aug 04

Read the National Housing Coalition letter  to Congress and the Senate. It is a worthy read, even if you are disinclined to reach out to your elected officials, but you should call/write your Senator and Congressperson.

Who are my Senator and Congressperson, you ask?

Find my Congressperson
Find my Senator

No harm in asking your local elected officials to support these efforts as well. You can find your State Senator and Representative on the Wisconsin Legislature home page. The search box is on the right, just below the picture. Tell them you understand they do not directly control Federal legislation, but ask if they could please talk to their party about this.

Also no harm in presenting this to your local elected officials. They hold more political power than many believe. In Milwaukee those folks are:
Mayor Barrett
Common Council
County Supervisors

What are you waiting for… Go make some noise! 😉

Protecting renters and housing
Aug 03

Halting evictions during the coronavirus crisis isn’t as good as it sounds

Read the whole thing, but here are some tasty nuggets

To protect renters from losing their homes, a growing number of cities and states have put a temporary halt on evictions, meaning that landlords cannot evict tenants who fall behind on their rent. While this may buy renters more time, a moratorium on evictions could cause ripple effects that further hurt local economies. But there is a more effective way to help renters by giving them cash that replaces lost income, while also supporting small businesses and local governments.

RENT HAS IMPORTANT MULTIPLIER EFFECTS IN THE LOCAL ECONOMY

Rent checks don’t just line the pockets of fat cat landlords—they also contribute to essential government services and other workers’ wages. If many households are simultaneously unable to pay rent, the economic impacts will be felt throughout the local economy.

The first entity that gets paid by a monthly rent check isn’t the landlord—it’s the local government. Property taxes have a higher priority even than mortgages; if a landlord falls behind on both property taxes and mortgage payments, the local government’s claim supersedes the lender’s.

Landlords are also responsible for paying building-wide utilities, including water and sewer fees, garbage and recycling collection, or gas and electricity for common areas. These are essential services that must remain functional even during the pandemic.

Additionally, many of the expenses incurred by landlords are actually the wages of other workers. Keeping an apartment building functioning, safe, and clean requires the efforts of maintenance and housekeeping staff. Larger buildings typically employ on-site workers, but even small properties have ongoing needs which they may outsource to local contractors, like plumbers or electricians. As rent payments dwindle, small landlords will defer some maintenance needs—which means poorer quality housing for all tenants in the building and loss of employment for maintenance workers.

 

Jul 15

A tsunami, an avalanche, a flood, a pandemic, and now a cliff of evictions.

No wonder no one tries to fix the root causes… some see it as a natural disaster, rather than something that with diligence can be fixed in a manner that is good for both tenants and housing.

When Desmond started, he had a great goal – universal housing vouchers, similar to food stamps, for people in need. But along the way, Matt was abducted by the Eviction Defense gang, a zero-sum game where individual tenants have small wins at the expense of the greater good for all tenants and housing.

Rather than eviction “defense,” which harms other tenants and housing by passing the cost burden to both, the better solution is eviction “prevention.” Even the recipients of the eviction defense come out of it with damaged rental histories. Excluding the attorneys, there are no long-term winners, only multiple losers.

Often eviction defense results in a tenant being able to stay for an extra month without paying rent. I wonder if there would be similar or better results if the money spent on eviction defense attorneys is used to pay a month or two of rent.

How many tenants have multiple evictions, or move without fulfilling their rental agreement every few years? Some get parents and friends to “front” for them as they cannot obtain housing independently from property owners. Others seek out small owners who do not know how to screen or go to owners who don’t care as long as they have a fist full of move-in money.

Prevention needs to occur before the rent is missed.

People at the bottom rung of the income scale will always have problems paying rent unless there is something like rent vouchers to help. What other societal costs could be reduced if the constant moving were to be reduced? I think there is a significant safety factor in knowing your neighbors, making it more likely you watch out for one another. What is the impact on schools as kids move, not just due to housing, but also utility disconnects? And so much more.

As I have said to Desmond in the past, I fully support his universal housing vouchers and am willing to work hard to promote it.

The numbers of people at risk of going over this “evictions cliff” are staggering: Data collected by the U.S. Census Bureau indicates that between 43 and 45 percent of adults live in renter households affected by recent job or income losses, and nearly half of all renter households were struggling to make ends meet even before the virus hit. A UCLA analysis projects that in Los Angeles County alone, about 120,000 households—including 184,000 children—are likely to experience homelesseness, and Black, Latinx, and poor families will suffer the most.

Having a lawyer in housing court can give tenants facing eviction a fighting chance: A March 2012 Boston study, for example, found that about two-thirds of people in the group with full-service representation were able to keep their homes, compared to one-third in the group that received more limited legal help. In Seattle, the King County Bar Association’s Housing Justice Project found that tenants with counsel are more than three times as likely to avoid a forced eviction executed by the local sheriff’s office and reach an out-of-court agreement with their landlord. When the agreement includes a payment plan for catching up on rent, tenants remain housed nearly two-thirds of the time.

Jul 05

Below is the letter the Apartment Association sent to Mayor Barrett, President Johnson, and the Common Council on June 15th, 2020. We have yet to receive a response, but still hopeful that those representing housing providers are included in designing a meaningful solution to these problems

Dear Mayor Barrett

We are pleased that Milwaukee is considering offering financial help for tenants who are struggling to pay rent, and we would like to be a part of the process. We have been working with a coalition that includes Community Advocates, Legal Action, Legal Aid, and Mediate Milwaukee. The AASEW can bring valuable experience and insights to this effort, and we hope you will strongly consider our offer to participate in your deliberations.

While we applaud Governor Evers’ $25 million Wisconsin Rental Assistance Program, it represents approximately $30 of assistance per rental unit in Wisconsin. We believe the size of the rental population in Milwaukee and the financial fallout from the COVID-19 pandemic may necessitate a more robust response.

In our view, sustainable rental housing is critical to the well-being of Milwaukee. Nearly six in ten, 58.2%, of Milwaukeeans live in rental housing.[i] In some neighborhoods, such as 53233, the number of renters exceeds 97%. The success or failure of neighborhoods and rental housing are closely tied. Currently, Milwaukee offers some of the most affordable metropolitan rents in the nation, a significant advantage compared to similar-sized communities in the country.

However, if landlords cannot collect rents and continue to cover the operating expenses for their properties, the impact could be worse than the 2008 housing crisis. “The economic impact of the Great Recession and mortgage foreclosure crisis has had a significant, detrimental, and ongoing effect on City households.” DCD 12/2019.[ii] Foreclosure filings in Milwaukee County were three times higher in 2009 than last year.[iii] From 2008 through 2010,16,000 Milwaukee properties were in some stage of foreclosure by lenders and the City.[iv] In those two years, the tax base lost almost $2 billion in value, with a resulting $16.7 million loss of tax revenue. The resulting demolitions had a large impact on the City’s budget due to the cost of razing along with the impact on the property tax and municipal services collections.[v] The neighborhoods where those properties were located suffered long-term damage. We continue to feel that impact even today, and we certainly hope to avoid a similar outcome in the future.

Rental Housing is the largest small business in Milwaukee, with over $10 billion[vi] invested in the City. Rental properties account for more than $700 million dollars per year of economic impact, starting with $270 million[vi] paid in property taxes.

In 2018, the Census Bureau found the yearly mean operating costs, excluding mortgage payments, per unit for rental properties was $5,270. [vii] Milwaukee’s rental housing contributes $1,198 in wages per unit, $161 Million per year. But more than direct wages are involved. There is also the local multiplier effect because the wages paid to employees of Milwaukee landlords are a major economic factor in the well-being of the City and its residents.

These numbers highlight the critical importance of a healthy and vibrant rental housing market in Milwaukee. We hope you will accept our offer to participate in the upcoming process to deal with the fallout from the COVID-19 pandemic and Eviction Moratorium this year. Thank you for your consideration, and please feel free to use the contact information above for any clarifications or questions you may have.

Sincerely,

Ron Hegwood
President
Apartment Association of Southeastern WI, Inc

[i] https://data.census.gov/cedsci/table?g=0600000US5507953000&layer=VT_2018_040_00_PY_D1&t=Housing%20Units%3AOwner%2FRenter%20%28Householder%29%20Characteristics&tid=ACSDP1Y2018.DP04&vintage=2018&hidePreview=true&cid=B25008_001E

[ii]Section 2: Housing Needs and Demand Housing Affordability Report Department of City Development  |  December 2019

[iii] State’s Foreclosure Rates Have Plummeted » Urban Milwaukee

[iv] www.sewrpc.org/SEWRPCFiles/HousingPlan/Files/foreclosure-in-milw-progress-and-challenges.pdf

[v] Tom Barrett wants to spend $2.4 million on home demolition, rehab

[vi] MPROP assessor records April 2020

[vii]  https://www.census.gov/data-tools/demo/rhfs/#/?s_byGroup1=12&s_tableName=TABLE4

Jun 11

Housing Choice Voucher Wait List. A random lottery will be held from the applicants with 3000 families to be added to the waitlist.

Why will only 3,000 applicants be selected in the lottery to be on the wait list?

The wait list will be limited to 3,000 applicants so that they will have a reasonable expectation that they may receive a Housing Choice Voucher within a 2- to 3-year time period.

This shows how great the need is for expanded rent assistance.

May 24

The NY Mag has an excellent, sorry depressing, article about “Dr. Doom” Nouriel Roubini prediction of an extended depression.

In September 2006, Nouriel Roubini told the International Monetary Fund what it didn’t want to hear. Standing before an audience of economists at the organization’s headquarters, the New York University professor warnedthat the U.S. housing market would soon collapse — and, quite possibly, bring the global financial system down with it. Real-estate values had been propped up by unsustainably shady lending practices, Roubini explained. Once those prices came back to earth, millions of underwater homeowners would default on their mortgages, trillions of dollars worth of mortgage-backed securities would unravel, and hedge funds, investment banks, and lenders like Fannie Mae and Freddie Mac could sink into insolvency.

His predictions for 2020 are far more dire

A decade later, “Dr. Doom” is a bear once again. While many investors bet on a “V-shaped recovery,” Roubini is staking his reputation on an L-shaped depression. The economist (and host of a biweekly economic news broadcastdoes expect things to get better before they get worse: He foresees a slow, lackluster (i.e., “U-shaped”) economic rebound in the pandemic’s immediate aftermath. But he insists that this recovery will quickly collapse beneath the weight of the global economy’s accumulated debts.

Go read the article

May 12

The AASEW has done a lot of great things for the industry and sustainable rental housing.

One that benefited many owners was the change to Sheriff moves to eliminate the mover, which is a large portion of the costs.  

Our attorneys, working against their own personal interest, changed the law to allow LLCs to be represented by a member or agent, rather than requiring an attorney. This saves a lot of money as well as making the case less confrontational.

Here are the laws passed through the work of the AASEW in:

2018  https://bit.ly/3bryZ0Y
2016  https://bit.ly/2Lj7NXM
2014  https://bit.ly/3dCRRM1
2012  https://bit.ly/2zx3NQZ

It is important that we work together as an industry for the betterment of all.

Apr 29

What is missing from the MN tenant advocates’ demands below is the cost of operating rental housing includes far more than mortgage expenses.  There are taxes, which are mention, but not asked to be forgiven by the tenant groups, insurance, maintenance, management costs, utilities

I’m sure most of the proponents of this are still expecting to still be able to take a warm shower, which is not possible it the owner can’t pay water and utilities as well as other “luxuries” like having the trash emptied weekly, the sidewalks shoveled, the lawns mowed, to have someone answer their calls, and have someone repair what breaks, etc.

In many cases the mortgage cost is less than half of the operating costs.

And why are property taxes the sacred cow? If governments are supporting the nonpayment of rent, then they should also support not receiving property tax and other payments such as sewer, water, municipal electricity, garbage pick up fees, etc.  Tenants and municipalities alike should not expect properties to be maintained or improved if they sanction rent abatement.

The world is changing.  If we are not at the forefront of these changes, many folks in our industry will be bankrupted.  

While today’s tenants benefit from such actions in the short term, they and future tenants will pay a large price in the unavailability of housing and the higher costs of what is available as seen in the years post-2008.


Subject: Letter to residential landlord

Some tenants organizations in Minnesota prepared the following letter for their members to send to their landlords.

I think you might enjoy reading it. Dale
Dale A. Whitman Professor of Law Emeritus, University of Missouri

To Whom It May Concern:

We hope you are all staying healthy during this time. We are reaching out regarding our rent for the upcoming months. A State of Emergency has been declared in the United States of America and the State of Minnesota due to the COVID-19 global pandemic. As a household, we have lost income due to forced work closure, reduced hours, and insufficient or unavailable unemployment insurance.

We are emailing you to inform you that though we had been able to pay rent on April 1st due to careful planning, we will be unable to pay rent on May 1st. Until we are able to leave our home and return to our jobs, which is impossible under the stay at home order, we are all holding on by the skin of our teeth. In addition, we are unable to accrue the May rent as a debt. Due to our inability to work, we are all facing limited resources and increased financial instability for the time being. We love this house, and we’ve enjoyed being your tenants. We would like to continue living here long term.

We understand that our ability to pay rent will affect your ability to cover your expenses as well; likely, our rent at least covers the mortgage payment and taxes on this house. Having a stable home is a critical part of the healthcare infrastructure that protects us all from illness. It is our collective responsibility to stop the spread of COVID-19 during this time of emergency, in order to keep ourselves and our communities safe.

We believe that mortgage and rent moratoriums at the state or national level are real possibilities at this moment, and we hope that our government steps in to support you and us, but again: we cannot take on this rent as debt. We need a rent freeze, and we support you in seeking a freeze on your mortgage. Some people in our networks are already receiving this support from their landlords.

The social and economic effects of the global pandemic are predicted to last over a year. We encourage you to join us in contacting elected officials to call for an immediate Universal Suspension of Mortgage and Rent Payments.

Representative Ilhan Omar (612) xxx-xxxx
Governor Tim Walz (651) xxx-xxxx
Senator Tina Smith (651) xxx-xxxx
Senator Amy Klobuchar (202) xxx-xxxx

This is a very stressful and uncertain time, and we are all trying to do our best to stay healthy and afloat. Thank you for your support and understanding,

Tenant names removed

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