Twilight Zoning in Bellingham: Slumlord Business Plan

Thursday, February 27, 2014

Slumlord Business Plan

The piece below first appeared in the Cascadia Weekly*. The column is by Dave Hopkinson of the York Neighborhood who has supported legislation in Bellingham to ensure the health and safety of renters. Dave, himself, is a landlord.

LANDLORDS NEED A LICENSE LIKE EVERYONE ELSE

After the lease has been signed, it is up to you, the tenant, to identify safety hazards and ask the landlord to fix them. If the landlord fails to do so in a timely fashion, you can file a complaint with the city, and an inspection will be scheduled. Safety code violations that are verified will then be subject to enforcement.

It is ridiculous, said one tenant, to have to go to so much trouble just to get the landlord to do his job. The landlord-tenant law is appropriate for disputes such as a retained deposit, but less so for landlord failure to comply with building safety codes. Instead of creating an incentive for the landlord to attend to the safety hazards of the building, landlord-tenant dispute creates an incentive for the landlord to defend himself.

The City of Bellingham receives relatively few complaints. Some believe this means there are few rental hazards. Actually, hazards are under-reported. Tenants cannot accurately identify hazards, nor will they reliably report them. The Centers for Disease Control and Prevention (2008) says tenants do not complain for fear of landlord retribution. That a hazard may be dangerous does not seem to make any difference. Many tenants will not report it to the landlord, and many more will not file a complaint. The CDC says that tenant complaint systems are “highly ineffective” and “foster the decline of rental housing.”

To find a safe rental home, prospective tenants must depend upon gossip, rumor and hearsay to guide them. What tenants need is what we take for granted whenever we eat at a restaurant: consumer safety. Food vendors undergo inspection for compliance with health and safety codes. Imagine a restaurant for which inspection occurred only after you filed a complaint. That would be similar to the archaic tenant complaint system that now regulates

rental homes.

An owner-occupied building is a long-term investment that is maintained to protect its value. Slumlords turn this upside-down with rental buildings. Deliberate neglect is the business plan. Costs are reduced by putting off repairs. Maintenance is ignored. Rent continues to be collected from tenants who have no other place to go. Buildings deteriorate and become increasingly dangerous. When no longer rentable, due to deterioration, the slumlord can sell the remaining husk of a building or demolish it.

The slumlord business plan is a form of resource extraction. Deliberate neglect is non-sustainable business practice that exploits tenants and places them at risk. The rental industry defends the existing situation by insisting that most landlords are doing a good job. Without inspection, there is no way to know whether any particular landlord is, or is not, doing a good job.

Doing a good job is faint praise for landlords who struggle to use sustainable practices, while being undercut by slumlords, who do not.

It is said that the costs of a rental licensing program will be passed on to tenants. This presents with an implicit false choice. Given capable landlords and strong regulation, why can’t there be both reasonable rent and safe rental homes? More than half of this city’s housing units are rentals. A license would be an incentive for every landlord to do a good job.

In 2011, a rental licensing program was researched by city staff and modified by Bellingham City Council, but the proposal did not go forward at that time. How about now? City-supported rental licensing would level the playing field for landlords by eliminating the utility of deliberate neglect, protecting tenants from an unsafe home environment, and slowing the loss of rental stock in the city.

A single email on rental licensing will reach all members of Bellingham City Council: cc@cob.org

*Reprinted with permission of the Cascadia Weekly.

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The Rationale for Rental Licensing

There is the definitive experience of cities that have already adopted rental licensing and inspections in the face of exactly the same opposition as we saw in Bellingham over the last decade. Ultimately, each of these cities was proven correct in its resolve to move ahead to protect the safety and health of the renters. We already know that the city of Pasco, WA found that 15% of the units inspected under their program had serious life/safety issues. 10% had mold problems. A full 85% had problems of varying degrees. The city of Gresham, OR performed over 1600 inspections in 2009 and issued, as a result, over 4,000 citations. Lexington, KY performed inspections of units near the University of Kentucky and found that 50% had life/safety issues. Sacramento, CA began an inspection program during which one third of the units inspected had serious safety and health issues. The question why does anyone believe that the condition of rental housing here in Bellingham does not mirror that which is found in cities that have the statistics to show that time and time again the condition of rentals in our cities is problematic? All we have had to date from those who oppose licensing are broad statements by the landlords and their paladins that are completely and utterly unsubstantiated. The Zonemaven has searched in vain for the horror stories that these opponents of licensing and inspections have predicted. On the other hand, The Zonemaven did find over 100 cities that have licensing AND inspections without the catastrophic effect for the rental markets that the landlords would have you believe. (See this blog's sidebar at bottom left for list)

One Reason Illegal Rooming Houses Do Not Work

The limit for unrelated persons at a single family home rental is three residents. Leases are signed by three people who then invite additional renters to join them to lower per capita rental rates. The perverse effect is that rental rates tend to rise under these circumstances making it difficult for single families to rent single family homes. Some local rental agencies facilitate this practice.

"To say that a family is so equivalent to a ragtag collection of college roommates as to require identical treatment in zoning decisions defies the reality of the place of the family in American society, despite any changes that institution has undergone in recent years. Only the most cynical among us would say that the American family has devolved to the point of no greater importance or consideration in governmental decision making than a group of college roommates." (Stegeman v. City of Ann Arbor)

That being said, accommodation ought to be made for protected classes, especially non-traditional unions and group houses for the disabled. These classes are laid out in federal and Washington State law.