Note: This is a Part 2 of our previous blog post, which can be found HERE: New HUD Report for Tenant Screening and Credit Checks - Part 1
Your role in advocating for small landlords is crucial. If you haven't read my previous post on the new rules, I encourage you to do so. Now, in part two, I present a response to HUD, a response they may never read. If you have connections with politicians, I urge you to share the perspective of landlords. This is a heartfelt plea, so please excuse the tone; it is not our usual professional demeanor.
Dear HUD,
These new guidelines have a significant personal impact. The big issue you are trying to solve is ensuring everyone is legally housed in America. However, this is an attack on small landlords who, if rent is late, are often stuck deciding between fixing a tenant's toilet or putting food on their families' plates at home. Despite what the media has told you, most rentals in America are owned by Mom and Pop investors who are just trying to save for retirement in a world that has failed them with the promises of yesterday's pensions and social security.
The first flaw I see in your note is that the rules you are putting in place for landlords you yourself do not follow when it comes to FHA loans, the screening process you have for FHA loans would be very discriminatory if you applied the same rules that you would like landlords to apply, you ask us not to look at past evictions if they have a way to explain what happened, but are you telling banks that if someone had a bankruptcy due to a loss of job and they are now working that they should ignore it? You protect the profits of billion-dollar banks by allowing them to discriminate and require credit scores in the 600 or 700’s, knowing that credit scores are often lower in minority families than in white families, but ask landlords not to rely on credit scores.
The second flaw is with Section 8 housing; you ask landlords to trust that Section 8 has qualified the tenant to make the payments due, but we both know that is untrue. It’s quite the opposite; the tenants in Section 8 programs are far less likely to comply and make payments due to being in a lower-income family or being on hard times that qualified them to be part of Section 8. There is an easy fix to this however, if you want to guarantee the rent so that a landlord doesn’t have to burden the risk, I am sure you will find that more landlords are more than willing to house Section 8 tenants. I would propose that you become the tenant and pay total amounts to the landlord for the full lease terms, and hold the responsibility of collecting the rent that you claim you screened the tenants for and are so sure they will make payments on. The other reason landlords screen tenants for responsibility is because, for the most part, tenants who are responsible with money are also accountable with homes and take better care of them, so I would ask that you not only take on responsibility for the lease terms of making payments but also any repairs that are needed due to tenant damage. Doing this will quickly fix the landlords not accepting Section 8 tenants.
As you stated throughout the report, unfortunately, due to 200 years of racism, there are far more African American and Latino families in lower-income positions. I do not think America, although so much progress has been made, is anywhere close to relieving the issues that racism caused or is still causing. Still, I also do not think that as many landlords as you feel are discriminating against someone because of the color of their skin; instead, they discriminate against people who are less likely to pay, which often tend to be minorities. At least in Chicagoland, it is so hard to get a non-paying tenant out of your home that landlords are extra cautious about who they accept if we figure out a better way to expedite payments of rental assistance as well as expedite evictions, you would see not only landlords becoming more and more accepting of tenants who fell on hard times, but also you would see lower rents. It has always amazed me that rents in some of the most torn-down neighborhoods are almost as expensive as high-end neighborhoods because of the risk of housing people with lower credit scores.
Lastly, a few other suggestions to help get lower-income families housed easier,
- Guarantee the rent of Section 8 tenants.
- Stop the nepotism of vouchers; when your children are taught not to work so they can keep the voucher for generations, you create problems. You also have a shortage of vouchers for those who genuinely are in hard times and need help temporarily. The vouchers should never be a life sentence for multiple generations of people.
Make evictions easier so landlords can take risks and accept tenants trying to escape a bad situation.
Make it easier for tenants ready to buy and get out of the rental world by applying the same principles you use to landlords to big banks and FHA loans.
Losen building restrictions and ADU rules, and allow the housing shortage to end.
Suppose you force landlords to restrict their rent increases. In that case, you should also limit local municipalities from raising property taxes in the same way, as well as insurance companies from jacking up pricing on landlords.
I am not saying we are speaking for all landlords, but I’m sure many of them feel the way we do, as I am talking with them daily. If you are a landlord reading this and agree with my points, please share this with your local, state, and national reps.
