by Michael Kachelries
As if low-income Americans didn’t shoulder enough, it’s becoming increasingly hard for many of our country’s poorest residents to find homes. And we’re not talking the best, highest quality rental housing - we’re talking any affordable housing at all.
We feel this in Ohio, where there are 40 available and affordable homes for every 100 “extremely low-income” renters.
The market doesn’t meet the need. Not even close.
This gap creates low-income households with a high housing cost burden, with some spending 50% or more of their monthly income on housing and utilities. It’s not hard to see how this could go terribly wrong - creating a never ending spiral of debt and stress that could end in homelessness, bad health, and a lack of hope.
Unfortunately, a recent national trend is making things even harder for these households who are just trying to get by. And we’ve seen evidence of it happening here in Ohio, too. Corporate property investors - often with headquarters cities or even states away - have been purchasing homes and apartment complexes at an alarming rate, and with detrimental impact on the rental market and the renters themselves.
The problem is, as these lower rent housing units transfer from smaller local landlords to larger corporations and their property management companies, myriad problems arise. These include:
Changing terms: Many low-income renters use the Section 8 Housing Choice Voucher Program to access housing, where eligible low income families can choose to have a rent subsidy paid on a residence in the private market. Often, these new owners are announcing they will no longer be accepting Section 8. Leases are left to expire, and families are evicted. With the dearth of affordable housing options, it’s not as easy as just taking your voucher elsewhere. Not to mention the detrimental impacts of housing instability on the family unit.
Increased rent: This trend is making an obvious impact on the renting households themselves and a less obvious one of the community. For renters, increased rent often means inability to pay followed by eviction. With precious few other options, these households may be left homeless or forced to live somewhere unsafe or unsuitable. At a community level, we are often seeing these investors buy up entire blocks. This essentially creates a monopoly. With rents hiked sky-high, we are seeing vacancy and blight or gentrification. And neither is good for the low-income household just looking for a safe place to call home.
Poor housing conditions: When ownership transfers to corporate or out-of-state entities, it gets a whole lot harder to contact your landlord to ask for repairs. Or about anything, for that matter. For some, what used to be an easy call to a fellow resident who lived down the street has become a confusing and frustrating maze to navigate. This often means conditions deteriorate, impacting the health and safety of tenants. It may also lead tenants to practice illegal self-help practices - like withholding of rent without proper process. While understandable, these could jeopardize the tenant’s lease and potentially lead to eviction.
We have seen the impact of this troubling trend in our region. For example, out-of-state investors bought Lincoln Square Apartments on Youngstown’s east side. Once they took over, they started allowing leases to expire for all Section 8 voucher holders and giving them thirty day notices. Additionally, Hidden Village apartments in Warren recently came under ownership of a company located in Oklahoma. They cycled through several management companies, likely due to the property’s deplorable conditions. Tenants struggle to communicate with a “landlord” and it’s likely the management company representative’s hands were tied with no access to the money for make repairs.
As we continue to work to help individual tenant households who are impacted by this troubling trend, advocates are also always trying to stay focused on the big picture. What changes can we put in place to prevent these problems from happening in the first place? How can we empower tenants - now and in the future - to help themselves?
At Community Legal Aid, we’ve had some successes in helping to mobilize tenant unions - groups of tenants who use their collective power to fight for their housing rights. One powerful tactic that has worked when there are building-wide issues is a group escrow. By law, and within some guidelines, tenants who feel their housing rights are being violated may pay their rent into a special escrow account rather than to their landlord. Imagine the power of 20 units using the escrow process in unison! That will get the attention of most landlords, and even those who are run by corporations states away.
We’re also watching potential legislation designed to crack down specifically on corporate landlords and restrict tax breaks for private equity firms and other large outside investors. This may help return management of low-income houses to a more local, more accessible landlord figure. But, in a divided Congress, it’s unclear whether this will move forward. Closer to home, cities could try to pass ordinances to encourage local ownership or measures to stabilize rent prices. Or they could step up their efforts to enforce existing regulations and codes by citing the owners for health and safety violations and pursuing the civil and criminal penalties that come along with those.
Whatever the outcome, this trend is evidence of something we suspected all along - mixing housing and big business hurts tenants. The rights of the tenant can be tenuous enough to protect, and this evolution makes things that much harder.