Mar 23

The right to counsel and eviction case sealing are two legal provisions that can provide significant advantages to non-paying tenants. These measures aim to protect the rights of tenants, especially those who may be facing eviction. However, they can also create an unfair advantage for non-paying tenants compared to similar applicants and renters. This white paper will examine the unfair advantage these legal provisions give non-paying tenants and how it can impact the rental market.

Right to Counsel

The right to counsel is a legal provision that guarantees tenants the right to legal representation in eviction cases. This provision ensures tenants are not unfairly evicted without proper legal representation. While this provision can benefit tenants facing eviction, it can also create an unfair advantage for non-paying tenants.

Non-paying tenants with access to legal representation can use this to prolong the eviction process. They can file motions and appeals that delay the eviction proceedings, giving them more time to stay in the property without paying rent. This can be a disadvantage for rental owners who may be losing money due to the non-payment of rent.

Moreover, tenants with access to legal representation can negotiate better settlement terms with their landlords. They may be able to negotiate lower rent payments or more favorable lease terms, which can further disadvantage other renters who do not have access to legal representation.

Eviction Case Sealing

Eviction case sealing is another legal provision that can provide an unfair advantage to non-paying tenants. This provision allows tenants to seal their eviction cases, which means that the eviction proceedings and outcome will not be publicly available. This provision protects tenants’ privacy and prevents discrimination based on eviction history.

However, this provision can also create an unfair advantage for non-paying tenants. Sealing eviction cases can make it difficult for landlords to screen tenants effectively. Landlords may not be aware of the tenant’s eviction history, which can increase the risk of renting to non-paying tenants.

Moreover, sealing eviction cases can make competing in the rental market difficult for other renters. Landlords may prefer tenants with no eviction history, and non-paying tenants who have sealed their eviction cases may have an unfair advantage over other similar applicants.

Impact on the Rental Market

The unfair advantage provided by the right to counsel and eviction case sealing can impact the rental market in several ways. Landlords may become more hesitant to rent to tenants, knowing that they may face legal challenges and prolonged eviction proceedings if the tenant stops paying rent. This can lead to a decrease in the supply of rental properties, making it harder to find homes.

Sep 08

A good article on the current try at zero-down mortgages.

Why “zero-down” mortgages are gaining ground

Details: Bank of America’s “zero down payment” loans are a bit of a misnomer. They do technically require a down payment, but the bank is offering grants of as much as $15,000 to cover it.

So buyers don’t have to come up with the down payment, but they are not borrowing the entire cost of the home, and they wind up holding some measure of equity right off the bat.
That’s distinct from the zero-down loans that, along with questionable underwriting standards, helped make such a mess in the run-up to the Great Recession.

It is great that more folks have the opportunity to buy homes and create equity and stability. However, for these programs to achieve what they set out to, they cannot facilitate the purchase and then leave the new homeowner to fend for themselves, but instead also provide resources for the buyer’s future success.

A significant problem with these first-time buyer programs is they focus on the sale and do not offer ongoing support for the buyers, many of whom are generational renters. When something needs repair, even if you broke it, call the landlord or the city. Problems with neighbors, move. Financial issues, stretch out rent payments as far as you can. Landlords in lower-income neighborhoods are often the unwilling lender, the financial rubberband.

A prime example: Around 2006 or 07, one of our long-term, great renters bought a home. A couple of years later, she was in our lobby crying, ‘Would we rent to her again?’ Child Protective Services threatened to take her kids because one of them mentioned to their teacher that they had not had hot water in months. The former tenant told me she called Blau Plumbing to fix it. They told her the water heater was bad and needed replacing at $900, which she could not afford. I sent one of my maintenance guys out. The water heater was maybe five years old, in good shape, and needed a $6 thermo coupling.

A well-designed program would have had a helpline that the new homeowners could call for advice.

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 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.

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.

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)

Apr 25

This one-hour Harvard webinar is a well-done,  “must watch”  if you are interested in the negative impact of the COVID economic crisis on housing.

Feb 08

You are permitted to forbid smoking in your units and in fact HUD has forbidden smoking in public housing since February 2017, mandatory since July 2018. HUD specifically forbids marijuana, as even though some states purport to have legalized its use, it is still federally illegal.

The Public Health Law Center has a great Q&A on this that states

Q: Can tenants smoke marijuana in multi-unit apartment buildings if they live in states where the use of medical or recreational marijuana is legal?

A: There is no absolute right to smoke medical or recreational marijuana in any state, especially when smoking impacts others. Secondhand smoke, whether from combustible or aerosolized tobacco or marijuana products, spreads throughout multi-unit dwellings. A recent U.S. study reports that even in multi-unit buildings where smoke-free policies were enforced, 50 percent of residents experienced smoke entering into their units from adjacent units. Multi-unit residential property owners have the legal authority to make their properties smoke- free, which includes prohibiting the smoking or vaping of medically prescribed marijuana in individual units and common areas, even in jurisdictions in which the use of medical marijuana is permitted by state law.

Jan 18

President elect Joe Biden proposes a $15 minimum wage claiming it will lift 1 million people out of poverty.

Clearly, it is not possible to pay current rents working full time at the current minimum wage. That needs to be addressed. I said similarly in New York Times interviews in 1991 and 2010:

“On $673 a month, how do you buy tennis shoes for the kids, clean shirts for school and still pay your rent?” Mr. Ballering said.
($673 was the W2, WI’s welfare program, cash payment in 2010)

I do not think increased minimum wage is the answer though. Such programs will cause rapid inflation, leaving those making minimum wages in a similar position in a few years as they are today. A better answer is something like FoodShare for Housing, which addresses the needs without rampant inflation.

The person with some skills who is making $15 dollars an hour today is not going to accept the person with no skills making the same amount, they will demand more. Now that the former $15 an hour person is making $25, the one-time $15 an hour person will expect $40—this causing the costs of goods and services to rapidly increase.

The other factor is it will result in far less lower-paid jobs, as companies will move work overseas and automate all that can be done by a machine. But you can’t replace the hamburger flipper … oh wait, they just did. Miso Robotics Flippy robot for $30,0000 replaces 3-4 employees, produces better quality and works 100,000 hours between major servicing. 24/7 staff for 30¢ an hour, no overtime, no worker comp, no paid holidays, no calling in sick because there was a Packer Game last night…

At many fast food places, when you talk into the drive-through speaker, you are speaking to someone that is in an off-site call center. When was the last time you were at Home Depot or or the large grocery chain store that the checkout person was not you? 😉

The winners of the increased minimum wage programs will be people who own hard assets when the increase becomes law. THe more you own at the beginning of an inflationary cycle, the more you win at the end.

The biggest winners will be those with a fixed rate mortgage. Let’s say you own a $100,000 duplex with a $75k loan. Today you have $25k and 25% equity. Ten years at 7% inflation, and it is worth just shy of $200k. Now you have $125k and 62% equity, plus your principal paydown. If inflation hits 12%, you reach those numbers in 6 years.

Crazy- This will never happen. But it did. From 1973 to 1981, we saw an average of 9.25% inflation, with three years over 12%. Mortgage interest rates in 1981 were north of 18%. Interest rates were over 8% for the entire period of 1973 to 1992.

If they pass a new minimum wage, the smart answer might be to buy as much highly leveraged real estate as you can manage, unless, of course, the inflation it causes and the trillions spent on COVID relief crash the entire economy…

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.


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.

Dec 30

Matt Desmond author of EVICTED often claims “the rent eats first.”

However, the truth is municipal governments are first at the table for that rent check, with their ever-increasing property taxes, sewer and water bills, those extras that are attached to the water bills as well as all the special assessments added to the tax bills.

Municipal governments also are the ones who will be paid even if you don’t and even ahead of the mortgage holder.

If rents increased year over year the same 9-286% as the city taxes, there would be rioting in the streets. There are a lot of news articles where there has been outrage at modest rent increases because that is not what one expects in an economic downturn.

However, owners will have to raise rents substantially to cover these tax increases. Add to that the reduction in rent collected many owners are experiencing this year and 8-20% rent increases will be required just to maintain the financial position of last year.

When costs exceeds the property’s income, the property will eventually fail. If this happens on a widespread basis, all tenants will be harmed and face much higher rents in the future.

Dec 20

How do landlords think unemployed people will pay rent?:

…an average of 8% of renters don’t pay rent in normal times. During the coronavirus crisis to date, that share has gone up to 15 to 20% of renters not paying.

“But generally, I think we need a better approach instead of just pitting owners versus tenants,” he says. Both the tenants and landlords need some larger, holistic fix from the government that acknowledges that there just isn’t as much money flowing through the system as there should be.

Nearly 12 million renters will owe an average of $5,850 in back rent and utilities by January, Moody’s Analytics warns. Last month, 9 million renters said they were behind on rent, according to a Census Bureau survey.   

The over $70 Billion in unpaid rent, as reported by Moody’s will cripple many housing providers and will cause a housing crisis that will impact both tenants and municipalities for years, if not decades.  In May of 2020 Milwaukee property values finally recovered from the 2008 Great Recession. 

Less than 2.5% of rent judgments are paid in Milwaukee County five years after the eviction.  And eviction judgments represent only a small fraction of the unpaid rent.  In surveying owners, we see on a high end 42% of their lost rent is included in eviction judgments, with most owners reporting less than 10%.  Some owners never pursue money judgments. So the million dollars a month in eviction judgments represent somewhere between $28.5 million to $100 million a year in money that should go into housing but does not.  I peg the number at least to be $48 Million a year in lost rent in one county.  This is just insane. 

The right answer is for the government to step up to the plate and create a portable housing voucher to cover a portion, to all, of the rent /housing costs for people below a certain income, similar to food stamps.

Instead, the government pits tenants against landlords in a zero-sum game where one must lose for the other to win. In the end, this makes housing more expensive or limits choices.

This has been a problem long before COVID. In 1991 I was interviewed by the New York Times on evictions. I asked the reporter, “On $574 a month, how do you buy tennis shoes for the kids, clean shirts for school, and still pay your rent?” Nothing has changed much since then. $574 was the AFDC (now W2) payment amount. Twenty years later in an NYT interview, my comment was basically the same:

“On $673 a month, how do you buy tennis shoes for the kids, clean shirts for school and still pay your rent?” Mr. Ballering said.” 

Some suggest canceling mortgages and rents, thinking that this equivalent and will prevent the economic failure of housing.  Sadly, it will not.

The average mortgage payment is 36-39% of gross income. The average owner earns 7-9% of gross income for their investment of capital, financial risks, and physical efforts.  If you stop mortgage and rent payments, as well as prevent owners from being paid for their investment and efforts, there is still 52-57% of gross rent that is needed to cover other operating costs such as sewer, water, property taxes, maintenance, insurance, etc.

In Milwaukee, for most properties, the City takes a far bigger cut of the rent in property taxes, and sewer/water bills, than the owner gets to keep.

If you read the Brookings report, you will see this plus the “local economic multiplier” effect of wages and other monies expended by owners.

The Census Bureau reported in 2018 that, on average, every unit generates almost $1,200 in wages. Those wages, the property tax money, etc, circulate throughout the community many times over.

Here’s what scholars believe will happen if there is a moratorium without rental assistance; It goes into the economic impact on housing and the cost borne by other current and future tenants. It is an informative read.

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