Pay to stay may be here to stay. rhino!UP for July 4th
Early in the pandemic, a group of lawyers at Advocates for Legal Equality (ABLE) devised a way to solve a glitch in Ohio Law that made tenants liable for eviction if the tenant is one day late with their rent. ABLE's "Pay to Stay" concept is a local ordinance that authorizes courts to require owners to accept late rent payments up to the point of the eviction hearing. Owners would be permitted to collect reasonable late fees along with rent due. While the idea grew out of discussions sponsored by Dayton Mayor Nan Whaley (now an announced candidate for Ohio Governor in 2022), it was Yellow Springs Village, just outside of Dayton, that was the first local municipality to adopt Pay to Stay in May 2020.
Remember the moment. The pandemic was putting thousands of Ohio tenants out of work and unable to pay rent. The Governor had declared a Covid 19 emergency and small scale efforts to provide rental assistance were in their infancy. In short order, Toledo followed the Yellow Springs' example. Later Cincinnati enacted a Pay to Stay ordinance. Local and Federal Moratoriums on eviction provided time for tenant advocates to make the pitch to their local officials that Pay to Stay could make a difference between a stable home or homelessness. RHINO raised the issue in an Opinion article in the Cleveland Plain Dealer early in the pandemic.
The Northeast Ohio Coalition for the Homeless (NEOCH) took up the cause of Pay to Stay in the communities surrounding Cleveland. As a result of NEOCH's work, the cities of Lakewood and Euclid have adopted Pay to Stay. Local advocates in Cincinnati and Akron also won adoption in Cincinnati and Akron. And...after a long delay and local wrangling, Pay to Stay was adopted in ABLE's home base, the City of Dayton.
Of course these local ordinances were challenged by landlords, but two recent decisions in Toledo and Akron have confirmed the validity of the local Pay to Stay ordinances.
A different sort of challenge has been the "sunset clauses" which were adopted in some of the local Pay to Stay Laws. When Governor Dewine declared the end of the COVID 19 emergency on June 18, 2021, some of the original ordinances were set to expire. Again, the Village of Yellow Springs led the way by making their Pay to Stay ordinance permanent. It just makes good sense to help keep families in their homes when all they need is a "grace period" to get the rent together.
The adoption of local Pay to Stay ordinances is an example of an "advocacy" reform that has proven its value when incorporated into court operations. Even without a moratorium, tenants can seek rental assistance that can be used to prevent involuntary displacement. In the past, rental assistance programs from local sources could only be used to pay for relocation.
However, as the pandemic emergency wanes in the minds of elected leaders, more grassroots activism may be required to win or maintain local Pay to Stay protections. This week, NEOCH kicked off a new effort to jumpstart Cleveland City Council's consideration of a local Pay to Stay ordinance. As everyone knows, the need to prevent involuntary displacement is a permanent feature in rental housing. Too many rental households, pandemic or not, are just a paycheck, car repair, or medical payment away from being homeless.
Nan Whaley's 2022 campaign for Governor could provide an opportunity for grassroots activists to get more involved at a statewide level. Surely Mayor Whaley will be talking about her role and support for a statewide Pay to Stay ordinance as she travels around Ohio. Legal Service and other policy advocates, which are barred from electoral activities by their tax exempt status, should start planning now to create an electoral base to seize this opportunity to reduce housing instability.
Housing Bubble 2022? rhino!UP for July 11, 2021
The news is full of stories of aspiring homeowners being blocked from the home of their dreams by skyrocketing prices. Could this be another case of investor speculation that could trigger another Great Recession? So far economists and housing providers say "no." They argue that housing inflation is a temporary imbalance caused by a low supply of houses and a pent up demand fueled by low interest rates. Just wait and the market will fix the problem.
The latest annual report from the Joint Center on Housing Policy (JCHS) insists that rapidly rising sale prices of housing do not signal a "bubble" (unsustainable inflation based on investor speculation), but merely a supply and demand imbalance. That sentiment is repeated in Politico this weekend: "For now, financial markets have shrugged off the recent spurt in inflation, given signs that it is tied to temporary factors that will subside as the country emerges from the pandemic."
However, looking at the real economy of people's lives shows the impact of a K-shaped recovery on housing options. In the current recovery, people who worked from home (white collar, well-to-do households) did very well. Steady income, stimulus payments, a reduction in other discretionary spending, and a booming stock market have made these households unexpectedly wealthy. Meanwhile, wage earners were laid off or faced increased costs for transportation, personal protection, and household necessities. Many were making do with slow-to-arrive rental assistance and on again-off again unemployment supplements.
Granted that supply and demand (microeconomics) could be self-correcting over time. The question is whether there's enough time to keep residential inflation in check. After all rents are not subject to short term fluxations like milk, lumber, or gasoline. Once they go up, they stay up. The facts on the ground offer clear examples of a spill over from home purchase price inflation and rising rents.
Just a month ago, JCHS noted that aspiring first time homebuyers are turning to single family rentals instead home ownership.
WVXU Cincinnati reports Downtown Residents Find Themselves Caught In Affordable Housing Gap — Are Solutions Coming? "Since it was founded in 2018, Vision and Beyond has invested more than $84 million in real estate and acquired more than 1,200 rental units in neighborhoods like Avondale, Mount Auburn, and Walnut Hills. It also has investments in cities like Columbus and Lexington and operates offices in Cincinnati and Tel Aviv."
Cleveland's Channel 5 reports on Akron's housing market: Apartment and housing rental shortage continues as eviction moratorium looms. "Several landlords and property managers told News 5 they're seeing a shortage in available units, similar to what's happening with housing inventory."
One month ago, Slate observed that Investment Firms Aren’t Buying All the Houses. But They Are Buying the Most Important Ones.. "It’s not exactly accurate that investors are 'buying every single-family house they can find,' as some have suggested. [ ] They’re really buying up the stock of relatively inexpensive single-family homes built since the 1970s in growing metro areas."
Back in February, rhino!UP explained the importance of President Biden's pledge of equity investing in America's future. If the President's efforts to shift some income to the lowest economic sector arrive soon, then the economic recovery could lose its K shape and look more like broadly based recovery. Merely waiting for the supply and demand to work itself out could result in a non recovery like the one middle and low income households experienced after the Great Recession. A 2011 study from PolicyLink forecast this problem: "The most vulnerable—low-income people and people of color—were hit first and worst. They are still waiting for a recovery that continues to sputter along and is at risk of 'double-dipping' into another recession."
Politico Money reports NEW APPETITE FOR MORTGAGE BONDS THAT SIDESTEP FANNIE, FREDDIE — WSJ’s Ben Eisen: “Wall Street is diving back into the business of turning home loans into bonds, injecting new competition into a market long dominated by government-backed mortgage giants Fannie Mae and Freddie Mac. 'The so-called private-label mortgage market — in which financial firms serve the middleman role of creating giant pools of loans and selling them to investors — had more than $42 billion of issuance in the second quarter. That is the most since the pandemic started and almost the most for any quarter since the last financial crisis, according to Inside Mortgage Finance, an industry research firm.' ”
Aug. 24, 2021. Cleveland.com. House hunters are increasingly going up against hedge funds in a hot housing market. "Homebuyers are increasingly going up against hedge funds and other big institutional buyers in a hot housing market — and they will need to bring their best offers to the table. Cheri Benjamin, Realtor and CEO of Village Premier Collection, which services Atlanta, Las Vegas and Tampa Bay, said buyers might want to try and put down more than 20% and get their bank to wave an appraisal, as well as see what other contingencies they can do without. That’s because institutional buyers are now paying in cash and often at the listing price or above."
Footnotes
July 10, 2021. WaPo. Rent prices are soaring as Americans flock back to cities. "If a renter is not willing to pay the higher rate, landlords are confident they can find someone else — or sell the property. The post-covid luxury spending boom has begun. It’s already reshaping the economy. Nick Kasoff, a landlord of 15 properties in Ferguson, Mo., gets at least a call a day from investors asking if he is willing to sell one of his rental homes. So far, he has said no."
JULY 23, 2021. Slate. Why Inflation Could Linger. "Rents, for instance, have been rising much more slowly than normal since the pandemic began. But, as the New York Times explained this week, they could soon start escalating again. Since housing makes up a big chunk of the consumer price index, that could have a major impact on inflation." More risky is the reality that inability to afford rent will trigger an fall in the overvalued property market.
Aug 5, 2021. Marketplace. Report shows decrease in underwater mortgages. "ATTOM, the real estate data company, said in the second quarter of this year, only about 4% of mortgaged homes were seriously underwater, with the homeowner owing at least 25% more than the house’s value. ATTOM’s Jennifer Von Pohlmann chalks this up to rising home prices. 'It’s really having – helping homeowners get out of any hole they may be in,' she said. Pohlmann doesn’t expect a wave of foreclosures like we saw in 2010, at the height of the housing crisis when, according to Redfin chief economist Daryl Fairweather, nearly a quarter of homeowners were underwater. She said there could be forced sales, instead of foreclosures." rhino responds: If or when house prices drop from their current nosebleed levels? Those houses which were floating on the bubble go PFFFFT and investors scoop up the failed mortgages to convert them to single family rentals...just like happened in 2010.
The future of multifamily organizing -- rhino!UP newsletter for July 18, 2021.
A largely overlooked Supreme Court decision in June could be a warning shot for tenant organizers doing multifamily organizing. In CEDAR POINT NURSERY ET AL. v. HASSID ET AL., the Supremes (SCOTUS) ruled in favor of two California fruit farmers who argued that union organizing on their property was unconstitutional. According to MarketPlace "The justices ruled that this law amounts to an invasion of the growers’ land. But the ruling opens the door for other employers to block unwanted oversight of their worksites."
What does this decision mean for tenant organizers seeking to organize a multifamily building or seeking support for a community-based or issue-based tenants organization?
In the short term, organizers working in HUD assisted properties have some protections. Federal Regulations (24 CFR 245.125) permit "non tenant organizers" to canvass residents in privately owned Federally assisted properties as long as the non tenant organizers are accompanied by a tenant of the property. This specific regulation does not apply to organizers working in conventional public housing properties, however, a bill introduced into Congress last month would, if enacted, expand organizing rights in all assisted housing.
There is an important distinction between housing organizing and worksite organizing that makes it unlikely that tenant organizers will fall under the precedent created by the Cedar Point Nursery decision. Unlike workers, tenants have a constitutional right of free association to invite guests on to the property, even if those guests are tenant organizers. Ohio Law requires that a tenant must:
"Personally refrain and forbid any other person who is on the premises with his permission from intentionally or negligently destroying, defacing, damaging, or removing any fixture, appliance, or other part of the premises" and
"Conduct himself and require other persons on the premises with his consent to conduct themselves in a manner that will not disturb his neighbors’ peaceful enjoyment of the premises...."
Securing an invitation into the building is a critical step for organizers seeking to bring information and enter into a dialogue with tenants.
All around Ohio, tenants' and their advocates' rights to be on the owners' property are being challenged by banning policies and trespassing ordinances. Often owners will establish "no trespassing" or "no soliciting" notices and create a "banning policy" on a behavior that falls into the categories of damaging the property or disturbing the quiet enjoyment. On the strength of these policies, an owner can ask the police to remove the trespasser or guest from the property without ever showing proof of a violation of the Ohio Landlord Tenant Law.
Back in the golden days of tenant organizing, it was unlikely that an organizer would show up on premises and be observed by the owner or staff. The emergence of pervasive tenant surveillance systems over the past 10 years makes casual entry more difficult. An incident in Newark, Ohio illustrates the problem. SpencerW reports: "I was observed by office staff being buzzed into the property by a tenant. My path to the tenants' apartment was observed in the management office by hallway cameras. Shortly before the meeting in the tenant's unit began, there was a knock at the door. The owner had been summoned to the building and announced that several of us were trespassing."
Enhanced surveillance by off duty cops, mandatory sign-in and ID procedures at the building entrance, license plate surveillance of parking lots, and doorway or hallway cameras with facial recognition have augmented human snitches who can alert management when an organizer is distributing information door to door.
While the Cedar Park Nursery ruling by SCOTUS doesn't bar the door to onsite tenant organizing, it does encourage rental property owners to exercise more control over who's visiting their tenants.
Paying rent to the portal? rhino up for July 25, 2021
Imagine that your landlord just set up an online rent payment system. What could possibly go wrong? For many tenants, paying rent to a faceless robot goes against their temperament. Other tenants may not be computer savvy, or might not have a computer, or a credit card, or a bank account. Some tenants may be differently abled and unable to use a computer. What about them? For tenants who live in HUD assisted housing or in California, no problem. HUD notice H-2020-10 (section VI, a, 1) and California landlords must offer an alternative method for payment. However, tenant protections in other jurisdictions seem non-existent.
Here's an example of how a payment portal works. Zillow's rent payment service is free for landlords, but charges tenants fees for paying with a credit or debit card. Tenants may pay for free only if they set up Automated Clearing House (ACH) which sets up an automated funds transfer system to siphon rent payments from your bank account to the landlord's bank account.
This past week, RHINO has gotten reports that some HUD tenants in Ohio are being forced into payment portal schemes which require a computer, some technical skill, a bank account or credit card...and sometimes come with a fee for the right to pay your rent on time! If that's your situation, don't panic. Instead, call your local legal services office to get help in challenging mandatory portal payment policies. It will be interesting to see if attorneys can challenge these payment portal practices under the Consumer Financial Protection Bureau.
Fight the power
Maybe it's just summer in Ohio, but this week seemed like a wayback from the 1970's when Cincinnati's Isley Brothers told us: "Time is truly wastin', there's no guarantee, yeah/Smile is in the makin', we got to fight the powers that be."
This week, group of residents of a Ramada Inn in a Cleveland suburb began resisting moving back to the men's shelter which is located in an industrial setting on the fringes of the downtown business district. These men had benefited from an effort to deconcentrate congregate shelters at the onset of the pandemic. But as the pandemic fears eased, the snap back to the shelters began, encouraged by the mayor of Independence Ohio. NIMBY concerns rather than health and safety seem to be driving much of the rush to return these homeless people back into the downtown shelter system. Despite the fact that the Ramada owner has expressed support for his customers who have been staying at the hotel, Independence Mayor Greg Kurtz, County Administrator Armond Budish, and the shelter operators, Lutheran Metropolitan Ministries supported shifting financial support back to the downtown shelter.
Meanwhile in Cincinnati, predatory rent increases have tenants at Court View Apartments protesting against being displaced from their homes. Many, they argue, will be forced into homeless shelters due to the absolute lack of affordable alternatives in Cincinnati. A local ballot initiative that would fund new affordable units was soundly defeated in May. A multinational investor bought Court View and has ordered residents out of their homes following a 30 day notice to terminate their month-to-month rental agreements.
In both of these situations, the local homeless coalitions are working to amplify the voices of resistance against a return to the shelter system.
Meanwhile, tenants at Colonial Village apartments in Columbus are protesting the owner's failure to provide basic health and safety at the 502 unit development on the East Side of Columbus. In this case, the City of Columbus and Columbus Legal Aid are supporting tenants to bring pressure on the owners to comply with court orders that address health and safety concerns.