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.


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:

*Reprinted with permission of the Cascadia Weekly. 

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