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

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.

Feb 22

[Thank you to Joe Murray for the research]

First, let me preface this that in general, I feel that Governor Evers has done well in the distribution of housing aid during the pandemic.

However, his proposed budget has a number of concerning provisions.  And how the heck does Wisconsin allows laws unrelated to spending to be part of a budget is well beyond me.

  • If passed, municipalities will be able to restrict how you screen, what you can charge, prohibit showing occupied units, making certain you lose a month or more between tenants, limit charging for damages, limit or prohibit security deposits and allow for rent abatement for minor issues.  
  • If passed municipalities will also be able to enact their own eviction moratoriums.
  • If passed, you will be inhibited from evicting for criminal activity. That should make other renters and neighbors feel safe — Not!  
  • If passed you can be required to disclose code violations “regardless of whether the landlord has actual knowledge of the violation

Actual details are below.  
—————————— 
Local landlord-tenant ordinances

Current law prohibits political subdivisions from enacting certain ordinances relating to landlords and tenants. Political subdivisions may not do any of the following:

1. Prohibit or limit landlords from obtaining or using certain information relating to a tenant or prospective tenant, including monthly household income, occupation, rental history, credit information, court records, and social security numbers.

2. Limit how far back in time a landlord may look at a prospective tenant’s credit information, conviction record, or previous housing.

3. Prohibit or limit a landlord from entering into a rental agreement with a prospective tenant while the premises are occupied by a current tenant.

4. Prohibit or limit a landlord from showing a premises to a prospective tenant during a current tenant’s tenancy.

5. Place requirements on a landlord with respect to security deposits or earnest money or inspections that are in addition to what is required under administrative rules.

6. Limit a tenant’s responsibility for any damage to or neglect of the premises.

7. Require a landlord to provide any information to tenants or to the local government any information that is not required to be provided under federal or state law.

8. Require a residential property to be inspected except under certain circumstances.

9. Impose an occupancy or transfer of tenancy fee on a rental unit.

10. Current law also prohibits political subdivisions from regulating rent abatement in a way that permits abatement for conditions other than those that materially affect the health or safety of the tenant or that substantially affect the use and occupancy of the premises. 

The budget bill eliminates all of these prohibitions.

Local moratorium on evictions

Current law prohibits political subdivisions from imposing a moratorium on landlords from pursuing evictions actions against a tenant. 

The budget bill eliminates that prohibition.

Notification of building code violations

Under current law, before entering into a lease with or accepting any earnest money or a security deposit from a prospective tenant, a landlord must disclose to the prospective tenant any building code or housing code violations of which the landlord has actual knowledge if the violation presents a significant threat to the prospective tenant’s health or safety. The bill eliminates the condition that the landlord have actual knowledge of such a violation and that the threat to the prospective tenant’s health or safety be “significant”; under the bill, the landlord must disclose to a prospective tenant a building code or housing code violation, regardless of whether the landlord has actual knowledge of the violation, if the violation presents a threat to the prospective tenant’s health or safety.

The budget bill eliminates these provisions.

Terminating a tenancy on the basis of criminal activity

Current law allows a landlord, upon providing notice to a tenant, to terminate the tenant’s tenancy, without an opportunity to cure the tenant’s default, if the tenant, a member of the tenant’s household, or a guest of the tenant 1) engages in any criminal activity that threatens the health or safety of other tenants, persons residing in the immediate vicinity of the premises, or the landlord; 2) engages in any criminal activity that threatens the right to peaceful enjoyment of the premises by other tenants or persons residing in the immediate vicinity of the premises; or 3) engages in any drug-related criminal activity on or near the premises. 

The budget bill eliminates these provisions.

Jan 07

There was a discussion on the free  Apartment Association listserv about application fees and move-in fees. One member told of how large management companies charge many hundreds of dollars in application and move-in fees.

In WI an owner can charge for a credit check fee up to $25 actual costs and, if the applicant is from out of state, additional actual background costs, up to $25. In WI all other application and move-in fees appear to be illegal.

WI Administrative Code ATCP 134 RESIDENTIAL RENTAL PRACTICES.

134.02 (3) “Earnest money deposit” means the total of any payments or deposits, however denominated or described, given by a prospective tenant to a landlord in return for the option of entering into a rental agreement in the future, or for having a rental agreement considered by a landlord. “Earnest money deposit” does not include a fee which a landlord charges for a credit check in compliance with s. ATCP 134.05 (3).

coupled with

134.05 (2)(b) A landlord who receives an earnest money deposit from a rental applicant shall do one of the following if the landlord enters into a rental agreement with that applicant:

1. Apply the earnest money deposit as rent or as a security deposit.

2. Return the earnest money deposit to the tenant.

makes it clear that all application and move-in fees, except credit reports and out of state background checks, are illegal in WI.

Owners that try to circumvent this with fancy wording will eventually find themselves in trouble as “any payments or deposits, however denominated or described” is extremely clear.

Aug 23

Bold highlights are mine:

https://www.zillow.com/research/zillow-weekly-market-report-27151/

 

Previous Zillow research found that this recession’s wave of layoffs disproportionately affected renters, and now the unemployed are having even more trouble paying their bills. The National Multifamily Housing Council’s rent payment tracker showed a two-percentage point increase in the share of renters who had not paid August rent as of August 13, compared to the same time in 2019. While many renters are currently covered by eviction moratoria, very few can expect rent forgiveness or extensions on the same scale, or structured similarly, to the forbearance policies that have protected homeowners. Consequently, many renters are moving out and looking for other shelter when unable to pay rent. Millions of young adults, predominantly 18-25 year-olds, moved back in with their parents or grandparents this spring. And as detailed above, many of the most financially secure renters in the Millennial generation are taking advantage of low mortgage rates to jump into homeownership. 

Jul 20

From $30 a day sounds cheap.  $930 a month not so much so.

A concern, as raised on the ApartmentAssoc@Groups.io discussion board is – does this expose the owner to sales taxes?

Apartments-30_dollars _a_day
Jun 18

We should not need the courts to tell us not to reject applicants for things that do not impact the tenants’ ability to pay or indicate they will be disruptive to other tenants or neighbors. It is simply good business practices to ignore things that don’t matter and keep your units full.

However, if you are confused about this, the recent US Supreme Court ruling on sexual orientation and employment, while not directly related to housing, should be a stern warning for landlords who exclude rental applicants based on sexual preferences.

But if you feel you must reject people despite having a history of paying their rent and not creating a ruckus, send them over to us. We’ll take all the good tenants we can get.

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 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.

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