Renters Rights and $10 Cocktails

Even a high-school educated waitress could have predicted the affordable housing crisis.

If the population grows, and the housing stock doesn’t, the price of housing will rise, and people will have to pay more for whatever they can find.

It has turned out just like my mother said it would. How come the politicians couldn’t figure it out? Some of them did but bowed to pressure from the IGMs (I Got Mine).

The IGMs command a lot of attention, especially when they pack a City Hall’s council chambers and demand that the council not approve a neighboring housing development that wouldn’t be at least as nice as theirs. You know, so as not to attract the wrong home buyers. Or worse – renters.

I had my first glimpse of IGMs while working in Southern California and reporting on Rialto and Redlands city halls, east of Los Angeles.

My favorite IGM in Rialto, a racially diverse community where Rodney King would spend his final days, was a black nurse named Hattie Inge. She absolutely did not want the city council to approve a housing subdivision that would have allowed smaller lots and smaller houses next to her neighborhood. It would attract the wrong kind of people.

“The kind of people who spit over the fence,” Inge said.

I wanted to laugh. I was renting a small two bedroom at the time, and I had never spit over a fence in my life.

Redlands, a college town, was less diverse than Rialto but had a substantial Hispanic population on the north side of town (where I lived). When a local developer proposed a project that included an apartment complex, North Redlands residents protested. They wanted nicer, bigger houses in their part of town. Go build an apartment complex on the more exclusive south side of town.

The developer tried to sell his project by pointing out the kind of people who needed the housing he wanted to build. He mentioned police dispatchers and librarians. No deal. The IGMs were not mollified.

My mother would occasionally attend city council meetings in Medford, Ore., so I would tell her about some of the public participation I witnessed.

Because my mother was a homeowner, she understood people wanting to protect the value of their home, especially when it might be their only investment. But she mixed in some common sense.

“Those people have kids, don’t they? Where are their kids going to live? And their grandkids? People will always need a place to live.”

Portland, Ore., has catered to its own contingent of IGMs. The politicians Portlanders have elected over the years have pursued various policies that have limited the housing stock or driven up the price.

Nobody – even Portland’s famous progressives – wants to see his or her property values drop. Nobody wants to live next door to loud, trashy neighbors — people who spit over the fence.

In Portland’s current housing crisis, the I-Got-Mine crowd has been momentarily shoved aside by angry tenants and displaced renters.

The angry ones sound like they could start a new planning phrase:  I-Want-Yours.

These are renters who discover they can no longer afford the Portland lifestyle, but they don’t want to move. They have adopted a city that likes to brag about its $10 cocktails, $20 burgers and $3.50 doughnuts (Blue Star, not Voodoo), yet they expect their rents to remain reasonable. They want landlords to accommodate them.

But then there are the other tenants who have truly sad stories – good, long-time renters, forced out when the rents shoot up to meet “market rate,” as if there were a law requiring all landlords to keep rents at market rate. These are renters who understand they have to move; they just wish they had a decent place to move to. It’s not the Portland lifestyle they are clinging to. They want a roof over their heads, preferably clean and safe.

The angry crowd’s misplaced demands will do little to increase affordable housing stock.

They like to blame Portland’s affordable housing crisis on house-rich Californians who move north, cash in hand from their home sales, and drive up the price of property. Another popular scapegoat is “corporate America.” For example, this post on the website of Portland Tenants United.

“Building-wide, no-cause evictions are popping up like brush fires across this city, fanning the flames of displacement as our communities continue to bleed. The flood of speculation from Wall Street, corporate landlords, and private investors, buying up buildings to empty them and raise rents, has dire consequences on people’s health, economic stability and their children’s educational opportunities.”

Blaming house-rich Californians ignores the fact that everybody wants to make money off the sale of their home. How many of the tenants protesting rent increases hope to cash in when their parents die and leave them the family home?

Blaming landlords ignores the fact that landlords cover a wide spectrum. My former landlord in Southeast Portland was a retired mail carrier who owned a duplex and a four-plex, paid for by long years of delivering mail. He did not gouge me on the rent ($850 a month for a two-bedroom duplex). He occupied the other half of the duplex, dined on micro-waved frozen dinners and paid for his granddaughter’s college. He didn’t drink alcohol, let alone $10 cocktails.

Technically speaking, this retired mail carrier is a “private investor.”

“Corporate landlord” is probably supposed to conjure an image of Donald Trump. Certainly he is one of America’s most famous landlords, but he’s not representative. Even a small-time investor can form a limited liability company and buy rental property.

When I first moved to California, I briefly rented an apartment in a complex that was owned by an LLC comprised of dentists. Would they qualify as corporate landlords?

It may be philosophically wrong that something as basic as housing has been turned into a money-maker, but blaming landlords and corporations leaves out a key driver – ordinary people who want to make money. If they’re property owners, they want the value to go up. If they’re renters, they want their rents as low as possible so they can have more money.

Lack of affordable housing is a problem in many parts of the country and contributes to the diminishing middle class. It’s not restricted to popular urban areas like Portland. In Oregon, employers in Pendleton have reported problems with employees unable to find adequate housing.

Some of the solutions being offered by Portland city officials and Oregon state legislators are misguided and will lead to new problems. Among them are variations on rent control, restrictions on no-cause evictions, and requiring landlords to pay relocation costs in some cases. These are bad ideas that would likely lead to a more contentious relationship between renters and landlords.

These policies could backfire and make it even harder to find housing. I could imagine a landlord seeking new tenants simply by word-of-mouth among selected sources, and renting only to tenants with known references.

Various bills proposed in the Oregon legislature would allow cities to force developers to include a percentage of affordable units in residential projects – a policy called inclusionary zoning. Would other home buyers and renters end up paying more so others could pay less? And what exactly would be considered “affordable?” It’s an important question considering how the Affordable Care Act produced some very unaffordable health insurance for the middle class.

And who would get first shot at this affordable housing? Friends with connections to government bureaucrats?

One of the best solutions to the housing shortage was outlined in a story in The Portland Tribune. Builder Rob Justus of Home First Development explained how he built 78 one-and two-bedroom units that rent for $395 to $775. He used no public funding and was able to avoid “social costs” that add to the price of housing but are not necessary to build solid, attractive apartments that meet code.

According to the Tribune, “Justus says more efficiently build affordable housing can only become a reality if city and state officials undergo a major change in their thinking.”

Unfortunately, many of the proposals being considered by city and state officials exhibit little change in thinking. Creating additional “tenants rights” won’t build a single new apartment.

– Pamela Fitzsimmons


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