Nov 14

HT: Dawn Anastasi


Note that this site most likely violates the Fair Credit Reporting Act, but it shows a level of frustration that owners are seeing

https://nypost.com/2021/11/13/fed-up-landlord-makes-website-outing-squatters/amp/

“Most landlords are good & hardworking people,” SquatterRegistry.com declares. “Some tenants need protection, but many have simply lied and leaned into recent provisions that make it impossible for homeowners to defend themselves or their properties.

_._,_._,_

Nov 07


Second-order effects in action again. 

Since January of this year, the national median rent has increased by a staggering 16.4 percent. To put that in context, rent growth from January to October averaged just 3.2 percent in the pre-pandemic years from 2017-2019.

https://www.apartmentlist.com/research/national-rent-data?

We expected to see rents increase as a result of the moratoriums. In fact, using RentoMeter.com we are witnessing even slightly higher increases in many Milwaukee neighborhoods. 

  • Owners need to make up for lost rents caused by the moratoriums.
  • The lack of units available for rent. I find this due to owners removing them from the market to sell or out of fear of removing nonpaying renters. Many owners I’ve spoken are prepping units for sale rather than offering them for rent.
  • The dramatic increase in real estate prices drives up both the cost of ownership and the income needed to meet cap rate expectations. Home Prices Continue Record-Setting Pace, Rising 19.7 % in July | Economy | US News
  • Inflation will force rents to increase. The CPI is up 5.4% year over year. CPI Inflation Calculator Private sector hourly wages in Milwaukee have increased 5.6% YoY Sept. If you look at weekly earnings, it is 11.9%. Databases, Tables & Calculators by Subject At my company, labor costs have risen nearly 10% since June, as we keep up with the wages others are offering. And it is very hard to find employees today.

Point one is temporary, as is the second point. We have already seen a slight increase in vacant units in the past two weeks. We are still below 0.5%, a tenth of what we expected.

I anticipate the third and fourth points having a lasting impact on rents. In part, the sale prices are driven up by artificially low-interest rates. In part, sale prices are up due to the inability to build new homes due to material shortages, U.S. homebuilding stumbles amid unrelenting supply constraints | Reuters and labor shortages U.S. Chamber Commercial Construction Index – Q3 2021 | U.S. Chamber of Commerce

Some will clamor that this calls for rent control, but rent control has failed communities terribly

Oct 09

A good, should read, article

https://reason.com/2021/10/08/the-eviction-tsunami-that-wasnt/

The predictions were dire.

“The tragic, consequential, and entirely avoidable outcome of this ruling will be millions of people losing their homes this fall and winter, just as the delta variant ravages communities and lives,” said Diane Yentel, president of the National Low Income Housing Coalition, in late August.

“The Supreme Court failed to protect 11 million households across our country from violent eviction in the middle of a deadly global pandemic,” said Rep. Cori Bush (D–Mo.), citing one estimate of how many renters were behind on rent.

But the reality was different

“It’s going up but it’s not going up by a ton,” says Peter Hepburn, a sociology professor at Rutgers University and researcher with Eviction Lab. “You look at September relative to historic averages, that leaves eviction filings at 48.5 percent below historic averages…We didn’t see a jump up to normal, let alone a jump past normal into a giant wave of eviction filings.”

Sep 30

My company receives messages and phone calls daily from prospective renters who are upset that we have nothing for rent.  Prior to March 2021, on a typical day, we would have 35-60 units for rent.  The number of total units we run has not changed.  One of the small local papers that we used to advertise in told my staff they were struggling financially because, like us, so many owners stopped advertising rentals.  Rental housing today is the Cabbage Patch Kids of 1983.  


In talking to owners it appears the dramatic reduction in vacancies is largely due to small properties being taken off the market and being made ready for sale.  Sellers want the place freshly prepped to sell fast and are aiming for owner-occupant buyers, who typically pay more.  


It is a perfect storm for this disruption.  


Small owners were severely, financially battered by a year and a half of moratoriums.   Dramatically reduced rent collection made it difficult for them to pay their bills, let alone receive compensation for their work and investment.  Harvard had a good report this week, Findings and Lessons from Two National Surveys of Landlords | Joint Center for Housing Studies  Generally, you can not harm one side of an economic equation, without ultimately impacting the other.


There is a general fear amongst owners that the government can step in at will and prevent rent collections anytime in the future for any reason, making selling more attractive.


Housing prices have skyrocketed, in part driven by low-interest rates and in part by a slow down in new construction as both materials and labor are harder to obtain.  Home Prices Continue Record-Setting Pace, Rising 19.7 % in July | Economy | US News


If you burned through all your savings, maxed your credit cards, and are three months delinquent on the mortgage, why would you not sell at the prices offered today?


I fully expect to return to normal vacancy rates within a year as we did not lose 8% of our housing stock and Milwaukee’s population continues to decline.*  However, I do not expect rents to return to 2020 rates due to the prices that are being paid for properties today and the large volume of sales.


The state, federal, and in some places local governments’ actions to “cancel rent” is the prevailing wind in this storm.  Peer pressure- I had to use a weather-related analogy. 😉  The story that these moratoriums simply delayed payment is a false narrative. Less than 2.4% of eviction judgments are ever paid, and less than a third of unpaid rent is reflected in eviction judgments.  So a short-term cancel is resulting in what is undoubtedly long-term harm for lower-income renters.


The answer is FoodShare for Housing.

Aug 30

As the first step, the CFPB urges renters to talk to the property owner/manager.  Urging communication is important.  I would add as step two; seek mediation. 


The CDC eviction moratorium has ended: Learn your options | Consumer Financial Protection Bureau

https://www.consumerfinance.gov/about-us/blog/the-cdc-eviction-moratorium-has-ended-learn-your-options/

If you are facing eviction now, we have resources to help

Whether you are facing an eviction lawsuit or worried about getting evicted in the future, it’s important to understand your rights and what next steps you need to take.

Talk with your landlord about making a repayment plan. Find out if your landlord is willing to work with you or if they plan to file an eviction lawsuit. Here is information to start that conversation.

Talk with a lawyer, don’t delay. You may qualify for free legal help. If you’re a servicemember, talk with your local Legal Assistance Office.

Housing counselors can help you make a plan based on your situation and needs. Again, you may qualify for free help. Find a HUD-certified housing counselor.

Learn more about rights and protections based on your situation

Aug 26

Last night the Supreme Court ruled that the CDC eviction moratorium is invalid.

What should you do now as a rental property owner?

Little should change with or without the CDC moratorium. It remains in the owners’ and renters’ best interest to work together to get the ERAP funding. The only reason to evict for nonpayment at this time is if the renter refuses to apply for ERAP or does not qualify due to no loss of income. In Milwaukee or Waukesha Counties, they can apply at Community Advocates. City of Milwaukee residents can also apply at SDC

If the renter is refusing to apply, try Mediate Milwaukee or call (414) 939-8800. It will only delay for a few days and often provides superior results to eviction as renters often stay and pay. If the renter refuses this as well, then eviction is probably the only option, but it should be the last option.

Remember that in Milwaukee County less than 2.4% of eviction judgments are paid within 5 years, less than 7/10ths of 1% within 18 months. So rushing to court only stops future losses, it seldom results in recovering past rent.

Aug 22

This is not about the streetcar per se, which is a political lightning rod, but rather effective use of available resources.

I was reading an article on the eviction moratorium and Emergency Rental Assistance on the Fox 6 site. Ironically the next suggested article was “Milwaukee streetcar sales tax floated to fund $330M expansion

This made me once again question our governments’ spending priorities. Unpaid rent in Milwaukee County is at least $36M to $48M a year,  BC (before COVID). For the price of a novelty bar hopping ride, we could end all the problems associated with the nonpayment of rent for 7-9 years. This kind of funding could solve many housing and social issues for far longer due to the benefits of stability.

The median rents in 53204 and 53208, two zips with lots of renters, is less than $800 per Census data. The median rent of two-bedroom units that are currently available is $950/$850 in 53204 and 53208 respectively, using rentometer.com So the streetcar expansion will cost 367,000 to 412,000 months of rent…

Streetcar or no streetcar will have limited impact on those who will use it. ~400,000 months of rent on the other hand could have a significant impact on a great number of people as well as the overall local economy.

Sure, 80% of the $330M is federal, but we can’t give a pass to any level of government for not using taxpayer money for the greatest good.

Aug 06

Little should change with or without the CDC moratorium. It remains in the owners’ and renters’ best interest to work together to get the ERAP funding. The only reason to evict for nonpayment at this time is if the renter refuses to apply for ERAP or does not qualify due to no loss of income. In Milwaukee or Waukesha Counties, they can apply at Community Advocates. City of Milwaukee residents can also apply at SDC

If the renter is refusing to apply, send them to Mediate Milwaukee https://www.mediatewisconsin.org or call (414) 939-8800. If the renter refuses this as well, then eviction is probably the only option, but it should be the last option. Remember that in Milwaukee County less than 2.4% of eviction judgments are paid within 5 years, less than 7/10ths of 1% within 18 months. So rushing to court only stops future losses, it seldom results in recovering past rent.

The current CDC order addresses this issue at page 14, explicitly permitting challenges to improper declarations. Milwaukee County Court previously was requiring a motion hearing to challenge the dec. With the new CDC order, and if owners state the challenge to the declaration in the initial pleading/complaint, the Court should hear the challenge without the extra delay of a motion hearing.

The new CDC order at page 14:

This Order does not preclude a landlord challenging the truthfulness of a tenant’s, lessee’s, or resident’s declaration in court, as permitted under state or local law.

Aug 05
Fox 6 Interview on mediation
https://www.fox6now.com/video/962073

Jul 13

With inflation according to the Wall Street Journal: “…last month’s consumer-price index increased 5.4% from a year ago, the highest 12-month rate since August 2008.

I was in this business in the late 70s and early 80s, where inflation reached 13.3% YoY. In October 1981 a 30 year fixed FHA mortgage for a primary residence was 18.45% APR. Crazy stuff. Real unemployment was 10.8% in 1982.

For those who are unfamiliar with inflation, here is a neat little article that explains it in an interesting manner.
https://finmasters.com/how-inflation-works/

Jump down to the “Who Benefits…” section to see opportunities and dangers. (Spoiler alert – owners of leveraged physical assets with fixed rate debt typically do well)

preload preload preload