Those numbers in the title? Particularly the 150,000 in a city of only 620,000 people? They’re huge, aren’t they? They’re the number of rental unit complaints and resulting evictions that The Sun, the Washington Post, The 7000 Families Campaign and others have been talking about.
These are problems between individual tenants who reside in Baltimore rental properties and their landlords. Many of the 150,000 have to do with family income. People who are struggling – who are unemployed or working, but not making a living wage – are unable to pay their rent. At some point, the landlord takes the tenant to “Rent Court” (the landlord-tenant section of the Maryland District Court) and has those of them who can’t bring their rent current evicted.
No array of new legislation is going to fix this. Not really. The only real solution to this particular component of the total problem is economic development and growth that produces the jobs and income these good people need.
By far, the great majority of these 150,000 complaints have to do with unacceptable conditions in the rental homes and apartments which the landlords are not resolving or resolving quickly enough without the tenants taking extreme measures such as withholding their rent payments. Withholding rent payments is a legal, but nonetheless messy thing to do.
The question is, why are these landlords not maintaining their rental properties?
- First reason. Let’s start with the reason many tenant advocates don’t like to discuss: The landlords can’t afford to maintain and repair their units because they have no way to pass those costs through to the tenant in the form of higher rent.
Simply put, the cost of providing well-maintained rental units to the lowest income tier of Baltimore’s families exceeds what they can afford. Put less kindly, these families can’t afford decent housing. This is the best the housing market can do for them.
- Second reason. By not maintaining their units, the economics of rental property ownership is such that landlords are able to make excessively high profits – at the expense of the quality of life of their tenants. Landlords could, in other words, afford to maintain and repair their units without raising rents and still make a reasonable profit, but the exceptional profits the are used to making would no longer be possible.
That this is true, by the way, implies a significant non-competitive advantage in favor of the landlord. For one thing, lower income people have few, if any, choices as to where they might live other than in these poorly maintained units. Equally if not more important, the city government isn’t doing its job to protect lower income families and is, in effect, conceding the market to landlords. And that’s the third reason in the next bullet.
- Third reason. Without sufficient government resources – notably for inspectors – and in the absence of better, well-enforced legislation that would be equally fair to both tenants and landlords, landlords are able to get away with not maintaining and repairing the units they own.
Even if every landlord was eventually forced to make the repairs his/her tenants demand and deserve – which is certainly not the case – the ability to put off incurring the costs of repairs and still collect or accrue rent significantly increases the profitability of rental unit operations.
So how do we fix this? Well, for one thing, with all-inclusive economic growth that creates the jobs that reduce unemployment and raise family incomes for the people who are working. We’re going to do that, but it’s really big deal and that times time.
And there are already laws on the books. Unfortunately, because of insufficient resources and a lack of creative leadership in the Mayor’s office for the past several administrations and then some, the city’s government is, in effect, the accomplice of the offending landlords. Before passing new law, it would be enormously helpful if the Mayor would do more, much more to enforce the law currently on the books.
In the meantime, we don’t recommend introducing and passing an array of new pro-tenant legislation. Why not? Because it’ll take time, lots of time to craft, pass and, most importantly, to implement and test those new laws. The fact is, however thoughtful, new laws that we rush through the Council may not be the best laws to solve this particular housing problem.
At Baltimore Rising, we like to focus on the root causes of problems. In this case, we’re particularly interested in the second reason above. Very quickly, and by law, we need to compel selected landlords in the city to answer the following question: “What rate of return are you making on the rental units you own?”
By “selected landlords” I mean those who own properties involved in the 150,000 complaints, landlords renting to Baltimore’s lower income families.
Before we introduce all sorts of corrective legislation, we need to have a more precise understanding of the nature, of the underlying economics of the problem we’re up against.
In simple terms, let’s take a look at their books. Would maintaining their units to reasonable standards and effecting repairs on a timely basis be unaffordable at the current rents being charged? Or are they making excessive profits at the expense of the families who rent their properties? Which is it? And what do these data tell us about precisely how and to what extent the rental market is broken – and how to fix it?
And we don’t need to commission an expensive independent consultant’s study to figure this out over the next couple of years. A relatively simple form of a few pages for landlords to fill out online should be sufficient. Enter the data, relate it to the last 150,000 complaints and see what it tells us. If the city needs advice as to how to structure the questionnaire and study, there are certainly plenty of people on the faculties of city and area colleges and universities who will volunteer their expertise. All we need is the Council’s support to make it happen.