Motels as Housing of Last Resort

Flagship Inn, Petersburg

Two Sundays ago the Richmond Times-Dispatch ran a disturbing special report on poverty and housing insecurity along the Jefferson Davis Highway in Chesterfield County. Hundreds of people live in shabby motels, paying $200 or more per week to live in conditions almost as deplorable as Richmond’s public housing projects. These hotels, the housing equivalent of pawn shops and payday lenders, serve the poor and the desperate who have nowhere else to turn. It is depressing to think that people live this way.

People pay huge sums — $200 per week translates into more than $800 per month, enough to rent a nice, two-room apartment in a decent neighborhood — to dwell amidst deplorable conditions. Many hotel rooms have roaches, bedbugs and other insect infestations. The article cites leaking sewage, mold, mice droppings, and inoperable door locks. Conditions sound similar to those of the public housing projects — without the same level of crime.

The plight of some of the residents is truly pitiable. Latisha Ragland, a single mother with three children, lives in the Flagship Inn in Petersburg. The 39-year-old had most of her right leg amputated because of complications from diabetes and high blood pressure. She receives dialysis three times a week, and is waiting for a kidney transplant. She receives $735 a month in disabilities benefits but spends $220 a week for rent. Any unexpected expense is devastating. Stressful insecurity adds to the misery of her circumstances.

It seems absurd that someone must pay the equivalent of nearly $950 per month in rent (4.3 weeks per month x $220) for a literally lousy hotel room. The article prompts the question of why tenants have to pay so much. Are people like Ragland being exploited by greedy motel landlords?

That’s hard to say because landlords would not talk to the reporters. The lawyer for one responded, “There’s plenty of other hotels. Obviously, it’s not that bad or she would leave.” That’s not much of an answer.

But there are hints in the special report as to why the rents are so high. People who live in hotel rooms come only when they can’t find housing anywhere else. Other than living in a tent in the woods, this is truly housing of last resort. Who are these people? For the most part, they live hand-to-mouth and have terrible credit. Who would pay $950 per month if they could qualify to rent their own apartment?

Evidently, some tenants fail to pay their rent. Consider the predicament of the landlord. Anyone who stays at a motel for longer than 90 days has rights under the Landlord-Tentant Act. Landlords can evict clients for non-payment only after giving them a reprieve to allow them to come up with the money, and only after a court proceeding. Sometimes unpaid rent can accumulate to substantial sums.

The T-D cites the situation of Trimaine Reed, living at the America’s Best Value Inn, who took the motel to court after living with cockroaches for three years. In return, the motel tried to remove her for failing to pay $4,016 in rent. The judge ruled against her, she claimed, because she had forgotten the paperwork laying out her defense.

The larger point is not whether Reed was fairly or unfairly evicted. The point is that motel owners are dealing with clients with terrible credit quality who frequently fail to pay their rent. Motel owners either eat the lost rent or attorneys to collect it in court. In either case, they bear a substantial cost which must be compensated for by charging what seems to be unconscionably high rents. The situation is directly analogous to payday lenders who charge what seem to be unconscionably high interest rates to clients with a high propensity for default.

What is to be done? How does society at large deal with the heart-breaking stories of people who live in these motels? Cracking down on the motels does not seem to be a viable option. Driving the motels out of business will leave the tenants with no place to live. Some say Chesterfield County should encourage more affordable housing by requiring developers to add affordable-housing units as a condition of development. That’s fine if you’re OK with wealth transfers from the middle-class to a lucky few who qualify for those apartments; regardless, the lucky few won’t come from the ranks of the motel people because landlords would accept only lower-income tenants with the very best credit. Another option mentioned by the T-D is to create rental subsidy program funded in part by the county. That’s fine if you’re OK with tapping middle-class taxpayers.

None of the traditional remedies look good. But let me throw out an idea. There does seem to be an opportunity to create a charity-based enterprise. Because of their poor credit, motel tenants are paying outrageous sums for terrible living conditions. Address the credit issue, and a charitable entity can get the motel people into better housing at lower rents. Perhaps a charitable enterprise could bundle a couple hundred of these people, in effect pooling the risk and functioning as a co-signor so tenants can qualify for better housing under more favorable terms. Inevitably, some clients would default and the charitable entity would have to eat some bad debt, so it would be necessary to inject some charitable capital or public housing funds to maintain solvency. But in theory, tenants will be at lower risk of falling behind on their rent because they will be paying a significantly smaller percentage of their income. It’s an idea worth noodling.

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7 responses to “Motels as Housing of Last Resort”

  1. LarrytheG Avatar

    are these folks not able to be helped by the Housing Authority folks?

    when you talk charity for a “couple hundred”… 700 x 100 = 70,000 a month and I know that sounds crazy but that’s more than 3/4 million a year.

    once kind of “charity” can generate that kind of cash flow?

    we do a food pantry in Spotsy – 100 people.. it costs $1,000 a month… and about 30 volunteers to get the food and distribute it… and it’s at the limit of what that Church is able to do… and that’s just food .. every two weeks…..

    so if you translate that into housing.. that Church could .. with the same cash flow keep one person in housing …

    It’s a problem.

    Having said that – the question really is – is this a job for the Feds to do – or is it up to the local community or the state?

    The sad fact is that while some communities would pull together and take on that responsibility – with charity – a lot of others .. simply do not and it gets booted to the Feds to do.. and in this particular case it sounds like the Feds are out of resources themselves and these folks are on their own and this is what it looks like.

    I’d also say that when you get to this point – a LOT of stuff has gone wrong in their lives… it usually is not one catastrophic failure.. it’s a step by step downward spiral.. and “rescue” is …. not that easy.

    1. Larry, I think the numbers are better than you portray. The charitable enterprise would not pay the people’s housing — it would create an entity that would pool risk and enable people to find housing that gave them better quarters for less money than the $900+ they’re paying now. Ideally, the entity would not subsidize their housing at all, just help them find better deals. In the real world, some people would default, sticking the charity with the tab. Therefore, some allowance would have to be made to cover the bad debt. But the sum would be nearly as large as what you suggest.

  2. I’ve had family members live in these motels.
    First, the waiting list for public housing is months, if not years long. You can be in a flea ridden motel the same day.
    Second, the motels provide electricity, heat, A/C, water, and sometimes cable tv and wifi. The ability to get utilities turned on in a rented house or apartment can be difficult with bad credit or impossible if they have outstanding debts with utility providers.

  3. LarrytheG Avatar

    ” The ability to get utilities turned on in a rented house or apartment can be difficult with bad credit or impossible if they have outstanding debts with utility provider”

    yes.. The question is do these folks get any cash assistance – vouchers from the housing authority .. or is most or all from their own funds?

    If they have bad credit and a record unpaid debts – it will follow them no matter what type of housing they seek – unless utilities are “included”.

    and solutions that tend to group them together under the same roof .. that’s exactly how public housing originally evolved and resulted in all manner of bad things …from bad guys hiding in them and hanging around them to neighborhood schools afflicted with great numbers of at-risk kids and the attendant problems you have when the schools have high numbers of them.

    That, in turn, causes other people to flee those neighborhoods and find ones with that are safer and with better schools.

    so public housing is an attempt to deliver it .. “on the cheap” or if that ruffles your sensibilities..attempts to be “cost effective”.. and fails because it then generates other costly unintended consequences.

    it takes more that “ideas” to fix… as many of those “ideas” have already been available .. and tried.. If the “idea” is for “someone” to form a “charity”.. it’s a nice thought but the reality is that opportunity to do that has always been there and it’s too big a problem for almost all home-grown charities.

    Of late HUD has been trying to move to vouchers and essentially disperse the recipients to live in neighborhoods that are not just clots of people all on assistance..

    People may have also noticed that every budget cycle that funds for HUD.. are argued to be reduced…. in fact.. some what HUD itself gone.. and turn this problem back to the States to fund.. not unlike the MedicAid issue…

    the bigger question is – is this a problem of money waste and inefficiency and there actually would be enough money to cover the problem if it was more efficient or is it a problem of enough resources, dollars to provide housing to all that need it?

  4. Steve Haner Avatar
    Steve Haner

    I suspect local building code regulators face a dilemma – enforce code standard fiercely on these landlords only to have them shut down and leave the tenants with few or no other choices. As one person noted above, and as with the payday loan industry, it is at least a choice open to these people with minimum red tape and no waiting. I know little about this area, but I would think positive reinforcement would work better than other approaches – finding a way to create effective incentives for the landlords to improve their properties. A voucher system that allowed payments to go only to housing meeting some standards comes to mind, and extra tax incentives for upgrades, but perhaps that is already going on. The laws of supply and demand have not been suspended as far as I know so there needs to be incentives for more supply.

    Housing is just part of the problem. The story also discussed a fellow with a long history of working for a restaurant, who changed workplaces because his closed and dropped back to $12 an hour, and suddenly was spending daily dollars for a cab ride because there was no bus. Outside of the city, in the counties, that lack of transportation is a problem. Then one health problem and the uninsured are back into poverty. We spend a lot of money on things with zero payback (except political), and I think the programs that exist need to constantly refocus on the basics of food, shelter and health care.

    I live within sight of that highly controversial housing project planned on the Union Seminary land at Westwood and Brook. That’s the supply expansion I’m talking about, but it sure isn’t easy….people don’t like it. And that’s not really a low income project, but it is not high cost rents either.

  5. CrazyJD Avatar

    I’m not generating a lot of internal sympathy for this situation. By the time they get to those hotel/motels on S. Crater Road, they are generally drug-addicted fools trying to live off disability and scoring a few sales now and again. Sorry, but that’s the real world. I can generate a lot more sympathy for the guys who’ve done 10-20 in the pen, coming out with no place to live and a huge uphill climb to getting a job. By the time they’ve done a long stretch in the pen, they’re generally really anxious to get things right. I’m not talking about the guys who do their time on the installment plan (suspended time, probation violation, return to prison, more suspended time, another probation violation, more prison time– all for the same offense), I’m talking about the guys who have done a really long stretch and are now with the program (most are, incidentally, but don’t stand a chance). You want to commit some resources, commit to those guys.

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