Government as Landlord

by James A. Bacon

Nikki Jones. Photo credit: Washington Post

If you were a tenant, who would you rather butt heads with? A slumlord or a public housing authority?

Private-sector landlords have a bad reputation for going to court to evict their tenants. But it’s not clear that government is any kinder or more understanding.

As COVID-era eviction moratoria expire, housing evictions are surging across the country, and Richmond is no exception. In just a nine-day span in March and April, more than 130 tenants were summoned to Richmond courts for eviction hearings, mostly for unpaid rent, reports the Post. A Department of Housing and Urban Development (HUD) audit found that 27% of RRHA’s rent was going uncollected in September 2022. About 60% of tenants owe back rent totaling $3 million.

Public housing authorities grapple with a problem that private landlords don’t: they have to calculate government rent subsidies based on tenants’ income. That task, apparently, has introduced significant room for error. Housing authorities suffer high employee turnover, and some less-experienced employees don’t know what they’re doing.

Steven Nesmith, CEO of the RRHA, told the board that if the agency miscalculated rent, it was because residents gave it inadequate information, according to the Post. But, conceding that the authority is short-staffed, he estimated that about 20 percent of tenant files contained errors made by the agency. Also, in tacit admission of the RRHA’s culpability, he restructured its affordable housing department for what he characterized as “mismanagement.”

Steven Nesmith

But Nesmith laid plenty of blame on tenants. In announcing a one-time opportunity to avoid eviction for nonpayment of rent, he drew a distinction between “those who … truly had hardships and those who are gaming the system.”

“Residents said, ‘Well I won’t get evicted,’ and so they weren’t paying their rent,” he said, referring to the COVID eviction moratoria.

That goes to the heart of the problem that all landlords face, whether public or private. Some tenants are victims of clerical errors or circumstances beyond their control. Others are cheaters and free riders. It’s not easy distinguishing one from the other.

The nation’s public housing system, not just Richmond’s, is a mess. Rent nonpayment is a problem everywhere. So are operating losses and insufficient capital for maintenance.

The founding premise for public housing a century ago is that the public sector would step in to address “market failures” — the alleged inability of the private sector to provide adequate housing for the poor. But public housing authorities encounter the same issues as private landlords — many poor people have a lousy record of paying their rent. Moreover, housing authorities are tangled with regulations, carry high administrative overhead, and support a parasitical class of third-party consultants and trough-feeders. The fact that public housing authorities cannot build an “affordable” apartment complex for less than $500,000 per unit tells you that something is systemically wrong — and it ain’t capitalism, racism or White supremacy.

From the WaPo story, it sounds as if Nesmith, the RRHA CEO, is doing his level best to address problems that are unfixable given the politics, incentives and bureaucratic realities he’s dealing with. I pity the guy. He has a thankless, impossible job.

The Washington Post and the coterie of nonprofit tenant advocates it quotes focus on the awful experience of people like Nikki Jones who get chewed up by the system. I feel badly for her. But journalists should not settle for hanky-wiper stories. They need to take off their social-justice goggles and ask why the government-run system is so deficient.


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Comments

16 responses to “Government as Landlord”

  1. Nancy Naive Avatar
    Nancy Naive

    they already areโ€ฆ real estate taxes, the rent you pay to own.

    1. Eric the half a troll Avatar
      Eric the half a troll

      Love when you get to settlement and the RE rep says โ€œโ€ฆ and we have to provide this figureโ€ฆ so this is what you will pay in total over the life of your loanโ€ฆ (chuckle) โ€ฆ pay no attention to that partโ€ฆ just sign hereโ€ฆ and hereโ€ฆ and hereโ€ฆโ€

      1. Nancy Naive Avatar
        Nancy Naive

        Well, at least at todayโ€™s rates itโ€™s less than 3x the face value. Try a 1979 mortgage on for size.

  2. LarrytheG Avatar
    LarrytheG

    This kind of housing needs to be done similar to ACA or Medicaid or GI benefits for housing or similar.

    That is – means test the recipients for the amount of voucher they will get.

    Add govt money to that voucher based on what market prices for rentals
    are in a given region.

    Encourage/incentivize non-"project" rentals. Let the recipients find
    market rentals and then between their voucher and govt subsidy pay the
    landlord.

    This is another place where ADUs could benefit both people in need of housing as well as property owners in bigger houses than they now need and instead need the money.

    The govt would vett BOTH the renter and the landlord to assure that both are doing what they are responsible for doing.

    People that can't adhere to the rules , landlord or renter, get them out of the program.

    We build these dang programs that evolve into dysfunctional organizations that seem unable to change and the fundamental mission goes adrift.

    1. Not Today Avatar
      Not Today

      This is exactly what section 8 already does. Private landlords routinely refuse to accept the vouchers and the waiting lists are often years long. In some states, the lists open once a year for a handful of days.

    2. Not Today Avatar
      Not Today

      This is exactly what section 8 already does. Private landlords routinely refuse to accept the vouchers and the waiting lists are often years long. In some states, the lists open once a year for a handful of days.

      1. LarrytheG Avatar
        LarrytheG

        Yes. Am aware of that but Section 8 is broke IMO. grossly underfunded and their policies do not hold
        renters sufficiently accountable so landlords won’t participate.

        The whole thing needs an overhaul IMO.

        One of the problems with folks who need Section 8 is the same problem those same folks have with
        other programs and that is their lives are not stable and often chaotic and that is at odds with the
        way these programs work. They’re not designed to deal with peoples personal lives changing in big ways over short periods of time. Like losing a job or changing jobs or getting into financial trouble, etc. It’s not something that money alone or a given landlord can or will deal with.

  3. DJRippert Avatar
    DJRippert

    "Public housing authorities grapple with a problem that private landlords donโ€™t: they have to calculate government rent subsidies based on tenantsโ€™ income."

    On the face of it, that doesn't sound like a particularly difficult problem – especially of there were a computerized system to make that calculation.

    Of course, the key input is an accurate and honest amount of income.

    BTW – $2,500 per month is $30,000 per year, or $15 per hour for a 2,000 hour workyear.

    $15 / hour is often discussed as the "end goal" for minimum wage since that is assumed to constitute a "living wage".

    How much should someone making $30,000 per year have to pay for subsidized housing?

    1. LarrytheG Avatar
      LarrytheG

      That's a number that can be calculated not unlike how we do for ACA or Medicaid insurance.

      Set it up, set the numbers and do it.

      But as you know in NoVa – $30,000 is not going to get you a place to live for the most part.

      We say we do "transit" for the low income service workers. We spend millions/billions to do that yet we can't seem to be successful for housing for low income.

      It makes the whole METRO thing look ineffectual in it's core mission as low income people COMMUTE in cars to places they can afford because METRO apparently does not do that.

      This is where I get really frustrated and totally understand SOME of the "burn it all down and start over" folk.

    2. Eric the half a troll Avatar
      Eric the half a troll

      โ€œOf course, the key input is an accurate and honest amount of income.โ€

      Sounds like a lead in to the โ€œpoor arenโ€™t really poorโ€ argumentโ€ฆ

    3. Eric the half a troll Avatar
      Eric the half a troll

      โ€œOf course, the key input is an accurate and honest amount of income.โ€

      Sounds like a lead in to the โ€œpoor arenโ€™t really poorโ€ argumentโ€ฆ

      1. LarrytheG Avatar
        LarrytheG

        yep. Part of the problem is that folks that need these services often have changes going on in their lives – like changing jobs, or family members coming and going, etc and the govt programs are really not set up for these kinds of changes. For instance, if they means-test, and a job changes 2, 3 times in a year.

        The ACA has the same problem. It computes subsidies on income, family size, and if income/family changes, the subsidy changes.

  4. Thomas Dixon Avatar
    Thomas Dixon

    "The fact that public housing authorities cannot build an โ€œaffordableโ€ apartment complex for less than $500,000 per unit tells you that something is systemically wrong โ€” and it ainโ€™t capitalism, racism or White supremacy."
    Oh the trials and tribulations of a never ending lost hope and dependence of government to run things. Democracy! Democracy!

  5. But journalists should not settle for hanky-wiper stories.

    If it bleeds it leads;
    and if it cries it flies…

  6. Eric the half a troll Avatar
    Eric the half a troll

    โ€œThe founding premise for public housing a century ago is that the public sector would step in to address โ€œmarket failuresโ€ โ€” the alleged inability of the private sector to provide adequate housing for the poor.โ€

    So how exactly is the private sector providing housing for the poorโ€ฆ?

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