Category Archives: Housing

Bacon Bits: Incompetence and Failure Everywhere You Look

Posted on March 11, 2019 by | 4 comments

Where are the social justice warriors? SJWs are super sensitive to subtle signs of “institutional racism.” Perhaps they should focus on the widespread incompetence in Virginia’s local foster care systems. For instance: A Virginian-Pilot investigation has found “a pattern of mismanagement, retribution and poor performance” in Norfolk’s foster care program. “Employees say they saw the foster care program go from bad to worse. It started with  children languishing in foster care for years, with little done to get them adopted. In more recent years, case workers say they’ve been pressured to get kids off the foster care rolls by any means necessary, even if that sometimes meant putting the children in harm’s way.” Sometimes foster children have been placed in situations where they have been assaulted and sexually molested. These children are disproportionately African-American. Why hasn’t this failed system become a cause celebre of the Left? Could it be that it doesn’t fit The Narrative?

Metro free falling. Ridership on the Washington Metro system continues its steady decline, sinking to fewer than 600,000 average weekday trips for the first since since 2000, according to the Washington Post. Ridership peaked in 2008 at 750,000 weekday trips. The passenger rail system, plagued by safety and maintenance issues, has been engaged in a SafeTrack rebuilding program that may account for some of the loss. But the system suffers chronic problems, such as too few trains, too many service disruptions, and the emergence of ride-hailing alternatives such as Uber and Lyft.

Why so few starter homes? Why are home builders constructing so few starter homes (defined as those selling for $200,000 or less)?  Continue reading →

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Posted in Children and families, Housing

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Blacksburg Tapping the Brakes on Student Housing

Posted on March 8, 2019 by | 7 comments

Student-oriented housing near Virginia Tech. (Photo credit: Roanoke Times.)

While the People’s Republic of Charlottesville grapples with mandatory parking (see previous post), the People’s Republic of Blacksburg is wrestling with the problem of privately developed student housing. Apparently, too many developers want in on the opportunities created by expanding enrollment at Virginia Tech. Town Council voted 7 to 0 recently, according to the Roanoke Times, “to be more selective whenever it receives requests for student housing projects.”

We commonly hear how the private sector is uninterested in building affordable housing. Yet in Blacksburg we see local government dampening developer enthusiasm for meeting the demand for student housing (much of which, I assume, falls under the rubric of “affordable.”) It is not clear whom Town Council sees as picking up the slack.

“It is extremely lucrative to build purpose-built student housing. It’s so lucrative that people will come in with these very large plans,” said Mayor Leslie Hager-Smith. “We have people expressing interest monthly.” Continue reading →

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Posted in Housing, Poverty & income gap

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Proffers: They’re Baaaaack!

Posted on March 7, 2019 by | 17 comments

Gentlemen may prefer blondes but localities prefer proffers.  A proffer is an arrangement between a locality and a land developer whereby the developer offers something of value in order to get a rezoning request approved.  Why do developers want land rezoned?  For residential development they want to build more homes on the land than the land’s current zoning allows.  Why would localities object to these rezoning requests?  Theoretically, the locality’s strategic and financial plans are based on providing services at an overall population density dictated by the current zoning.  Adding more density increases the locality’s costs for services like public schools.  Localities are understandably worried about the unfunded mandates that up-zoning can cause.  How do proffers help?  Items of value (money, land, astroturf, etc) are given to the locality by the developer in order to fully or partly cover the additional costs to the locality of development at higher density than was planned.  These proffers reduce the developer’s profit margin on the project at hand so they are not popular with the development community. Continue reading →

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Posted in Economy, Finance (government), Housing, Land use & development, Money in politics, Uncategorized

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The Black Home Ownership Conundrum

Posted on March 4, 2019 by | 8 comments

This map shows the white/black home ownership gap in U.S. cities with largest black populations. The lighter the circle, the smaller the gap. The percentages I have added in red show the black home ownership rate for Virginia’s three largest metros. Map source: Urban Institute

Numbers you’ll never see in Virginia’s SJW media: Virginia’s three largest metros — Washington, Hampton Roads and Richmond — have higher black home ownership rates and smaller white/black gaps in the rate of homeownership than most of the country. The map shown above comes from an Urban Institute study mapping the black home ownership gap.

Here is the breakdown by Virginia’s major metropolitan areas:

The data came to my attention today thanks to a Washington Post article discussing “The ‘heartbreaking’ decrease in black home ownership” since 2003. A key thesis is that “racism and rollbacks in government policies are taking their toll.” Continue reading →

8 Comments

Posted in Housing, Race and race relations

Hollowed Out Henrico

Posted on February 27, 2019 by | 26 comments

Photo credit: Richmond Times-Dispatch

Henrico County has a huge problem with encroaching slums that it has only recently begun to acknowledge and deal with. According to county data published in the Richmond Times-Dispatch today, 57,000 properties — about 54% of all parcels in the county — will be eligible to apply for a tax abatement program designed to combat blight.

The previous tax-abatement program applied only to property owners with homes assessed for less than $250,000 and older than fifty years. In a vote yesterday, the Board of Supervisors expanded the tax abatements, lifting property taxes on improvements for 10 years, up from seven, for certain residential properties, and making it easier for commercial and industrial properties to participate.

“We’re trying to boost up incentives for people to reinvest in their homes and build up neighborhoods,” said Director of Finance Ned Smither. “In general, we are seeing more commercial and residential properties that need to be more dressed up.”

Unfortunately, the cure may be worse than the disease. Continue reading →

26 Comments

Posted in Housing, Land use & development

Progressives Perpetuating Poverty

Posted on February 20, 2019 by | 29 comments

Danny Cendejas, an organizer with La ColectiVa, addresses concerns about HQ2. Photo credit: Washington Business Journal

Amazon’s decision to scrap a $2.5 billion investment in New York City has emboldened far-left progressives in Northern Virginia to oppose the e-commerce giant’s plans for plans to build an East Coast headquarters in Arlington. Critics of HQ2 are targeting $23 million that Arlington County will contribute to the pot of incentives, reports the Washington Business Journal.

“The county should vote down the deal,” said Roshan Abraham, an organizer with Our Revolution Arlington in an anti-Amazon meeting Monday. One of the richest companies in the world does not need the county’s money, he said. “If Amazon chooses not to come to Arlington over $23 million, good riddance.”

A primary concern among leftist activists is rising rent. As 25,000 highly paid Amazon employees start working in Arlington, they will bid up housing prices. About 3,000 apartment units in Alexandria and Arlington between South Glebe and West Glebe roads could become unaffordable for the largely Latino community living there once Amazon moves in, say Amazon foes.

I sympathize to some degree with those who resent the incentives, including some $500 million in workforce grants from the state. Amazon is the world’s most valuable company, CEO Jeff Bezos is the world’s wealthiest man (at least until his divorce is settled), and the showering of massive tax breaks on Amazon is manifestly unfair. But the world is unfair, and the rational response is not to chase Amazon out of town but to craft a deal that is tax-flow positive for state and local government, and work to ameliorate negative impacts on housing and transportation. To do otherwise is to limit opportunity and perpetuate poverty. Continue reading →

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Posted in Economic development, Housing

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General Assembly Acts to Curb Evictions

Posted on January 31, 2019 by | 4 comments

by Richard Hall-Sizemore

Virginia has made another “top-10 in the nation” list. But this one is not one to be celebrated. Last spring, using national eviction data, researchers at Princeton University released eviction rate rankings of large cities in the United States. Cities in Virginia comprised five of the ten cities with the highest eviction rates. Those were Richmond (2), Hampton (3), Newport News (4), Norfolk (6), and Chesapeake (10). By going down a little further on the list to no. 15, one would find a sixth Virginia city, Virginia Beach.

These findings sparked a flurry of activity and commentary in the Richmond area, including Bacon’s Rebellion. The Center for Urban and Regional Analysis of VCU’s Wilder School set up a program, RVA Eviction Lab, similar to the Princeton program that produced the national report, to examine issues related to eviction in Richmond and has recently released a series of reports.

Perhaps most significantly, the General Assembly and the Governor have swung into action. Shortly after the Princeton report was issued, the Virginia Housing Commission took up the issue. The Housing Commission is one of those permanent legislative bodies established by the Code of Virginia for examination of specific areas. Its membership is drawn from both houses of the General Assembly. The commission recommended legislation dealing with about six primary issues. Those bills were introduced in both houses with a bipartisan set of chief patrons. So far, most of the bills have encountered no opposition, having been passed unanimously by the original houses in either their original or amended forms. Continue reading →

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Posted in General Assembly, Housing, Poverty & income gap

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Senate Addresses Supply of Affordable Housing

Posted on January 23, 2019 by | 8 comments

Affordable housing in Northern Virginia

One in three households in the state spends more than 30 percent of their income on housing, reports the Virginia Mercury. The apartment industry argues that housing will become unaffordable for even more as the state’s population grows faster than the housing supply.

If I were a middle-class Virginian most of whose net worth was tied up in my home equity, I expect I’d be particular about who lives near me. I probably would not be happy to discover that some developer wanted to build “affordable housing” next door. But my right to build a house on my own property does not entitle me to stop someone else from building housing on his property. Continue reading →

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Posted in Education (K-12), Housing, Poverty & income gap

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A Crime-Fighting Experiment at Gilpin Court

Posted on November 23, 2018 by | 4 comments

Police patrol at Gilpin Court. Photo credit: Richmond Times-Dispatch

The Attorney General’s office is funding an interesting social experiment. On the theory that fighting crime requires addressing root causes over and above actually, uh, fighting crime, the AG is providing $1 million to fund programs designed to improve health, education and economic outcomes and strengthen neighborhood ties at the City of Richmond’s largest housing project, Gilpin Court.

“Instead of a top-down approach that tries to tell Gilpin what it needs, we’re going to bring together everyone who cares about this community and who has good ideas to reduce crime, strengthen the neighborhood, and improve quality of life for Gilpin residents, especially young people, said Attorney General Mark Herring, as quoted by the Richmond Times-Dispatch. “Greater Gilpin is going to reduce crime and make Gilpin Court safer by taking a more holistic approach and attacking the factors we know contribute to higher rates of crime, like poverty, drug use, limited educational or job opportunities, and poor health.”

The grant will allocate $187,000 to pay for additional police patrols in Gilpin Court, a project of 781 housing units occupied by about 2,700 residents. But the rest will go to hiring a full-time program coordinator and underwrite for programs identified through community meetings.

“Building stronger, safer communities means addressing the underlying factors that can contribute to violence and violent crime,” Mayor Levar Stoney said in a statement. “This initiative will build on the strengths of the community and empower Gilpin residents to have a say and a stake in the future of the neighborhood.”

The program encapsulates every liberal piety about the relationship between poverty and crime…. which, in my estimation, means that it is doomed to failure because liberal pieties about poverty and crime are misguided. While it is true that violent crime is more prevalent in poor neighborhoods, there has been very little correlation between changes in the rates of poverty and violent crime over the decades. The relationship between the two is tenuous and complex with many intervening variables.

One critical variable is the prevalence of families dominated by unwed mothers and the lack of consistent daily discipline provided by fathers, which results in a failure to enculturate young people with non-violent norms. Teenage boys roam free in Gilpin Court with few parental restrictions. They develop their own young, male, Lord-of-the-Flies subculture, which skews towards partying, substance abuse, petty criminality, an obsession with status among peers, and, often, violence.

To the extent that crime among male teens and young men is the outcome of rational calculation — weighing potential gains from crime versus the prospect of getting caught and punished — increased neighborhood patrols undoubtedly will be useful. Richmond police doctrine emphasizes the building of community bonds that engender trust with residences, so a heightened the police presence should have a positive impact. Conversely, while the funding of “community programs” may provide benefits to Gilpin residents, unless they interrupt the dynamic of fatherless boys, I am dubious that they will have any impact on crime.

I might be wrong, however. I’m not omniscient. Perhaps liberals have it right. Perhaps the program will be a smashing success. The fact is, nobody knows. That’s the point of conducting an experiment.

I’d be all in favor of conducting this particular experiment if it were set up so we might learn something from it. Ideally, the experiment would confirm or disprove the notion that addressing certain “underlying factors” by means of programs chosen through community input will reduce crime. Unfortunately by doing two things at once, both boosting policing and attacking root causes, the factors contributing to positive or negative outcomes will be hard to disentangle. If the program does prove to be beneficial, we are unlikely to learn anything from it because we won’t know whether the police or the community programs deserve the credit. In the absence of unambiguous data, liberals will continuing embracing their pieties, and conservatives theirs, everyone will continue believing what they always believed, and we will flounder about as always.

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Posted in Crime and corrections, Housing, Poverty & income gap

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Dissecting Virginia’s Amazon Deal

Posted on November 14, 2018 by | 19 comments

Source: PROJECT COOPER: BRIEFING FOR THE
HOUSE APPROPRIATIONS COMMITTEE

Virginia has committed to investing a sum unprecedented for an economic development deal in the Commonwealth — roughly $2.5 billion in state and local dollars to bring Amazon, Inc. to Northern Virginia. In a presentation to the House Appropriations Committee yesterday, Stephen Moret, CEO of the Virginia Economic Development Partnership (VEDP) provided a detailed account of the incentives. Now that the numbers are out, the public has an opportunity to review the deal. At Bacon’s Rebellion, we love critiquing things, so here goes…

Cash flow positive for the state. The first point to note is that, while Virginia is making a massive public investment to the project, it will be cash-flow positive for the Commonwealth from Year One. If Amazon pays its projected 2,500 employees an average of $150,000 a year — the target number to qualify for state subsidies — the company’s Virginia workforce will generate a lot of new income taxes and sales tax revenue. By Year Ten, added state revenue from direct, indirect and induced employment will amount to $209 million. The sum could grow to $364 million within 30 years. That compares to a General Fund revenue forecast of about $20 billion in Fiscal Year 2019.

As Steve Haner explained in the previous post, the deal will have a minimal impact on the current budget cycle, and future expenditures on higher education, transportation and direct subsidies to Amazon will be phased in over time. The project is designed to ensure that new General Fund revenues will exceed project-related outlays. In other words, according to Moret’s numbers, the state will make a “profit” on the deal from which the entire state benefits.

Investing in competitiveness. A second key point is that 60% of the incentives will be invested in infrastructure and educational programs that don’t go into Amazon’s pocket. I have a huge philosophical problem with the state giving $550 million in Phase One (and another $200 million in a potential Phase Two) to one of the world’s richest companies. Talk about welfare capitalism! But Amazon could have located in Dallas, Texas, or a handful of other cities, so it has the power to play off one location against another. I don’t like it, but that’s the way the world works. The question for Virginians is whether or not the state comes out ahead.

Critical to the deal, Virginia will invest heavily in building its tech talent pipeline. According to Moret’s presentation, the state envisions producing approximately 25,000-35,000 new degrees (over and above baseline levels) in computer science and related programs over the next 20 years. That’s more than Amazon will require. So, labor-starved tech companies other than Amazon will benefit from the investment.

In an earlier post, I had expressed concern that the state would be subsidizing Amazon’s employee recruitment efforts to the tune of $22,000 per employee, giving the company an immense advantage over other Northern Virginia companies competing for talent. In his presentation, Moret acknowledged that there would be “short-term pressure” on Northern Virginia job markets, but that NoVa executives were mostly positive about the deal. His presentation includes a sampling of reactions back in February:

“The economic lift that we get in Virginia, the branding part of it, would be a strong positive for our recruiting efforts. Clearly we will be competing for talent, but that’s fine,” said a Fortune 500 CEO. “I think it’s important for regions to have a diversity of employment options. The economic lift and intellectual lift for the region is a strong, strong positive. I would like to see us get selected.”

“It would be a double-edged sword. Great for the economy. Great for the brand,” said the CEO of a successful tech company. “Long-term it would be good, but it’s another competitor to deal with for talent. … It would give cachet to our area.”

Said the C-level exec of a Fortune 500 company: “In the short run, it will entail some competition for talent. But it’s very powerful for the region for the long term. We’ve made Virginia our hub. The fastest growing part of our ecosystem
is tech – we hire thousands of associates [every year]. We want to have an ecosystem where new tech grads stay here and where there is a desire of folks from around the country to move here.”

The workforce worries are real. But the Virginia’s higher-ed investments will expand the local talent pipeline, Moret argues, while the presence of Amazon will help give the Northern Virginia tech sector a more positive brand nationally, aiding recruitment from other labor markets.

Meanwhile, the state, Arlington County, and the City of Alexandria will spend hundreds of millions of dollars building out transportation infrastructure serving the Crystal City/Potomac Yard area. The transportation initiatives, designed to complement walkable urbanism in the region’s urban core, will accommodate business and residential growth for more than just Amazon. The Metro bus and rail system is operating at significantly below capacity, notes Moret. This deal could boost ridership and revenues for the troubled mass transit system.

Projected share of Amazon commuters by transportation mode.

As Arlington and Alexandria re-develop the region as a walkable mixed-use community, Arlington projects that 77% of Amazon’s workers will walk, bike, car-share or take mass transit to work. That number, if accurate, is phenomenal. By creating a new template for Crystal City/Potomac Yard, Amazon could catalyze the development of even more transportation-efficient walkable urbanism that can soak up a lot of future transportation demand. Continue reading →

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Posted in Economic development, Education (K-12), Entrepreneurialism, Housing, Infrastructure, Transportation

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Market-Based Social Justice: Roll Back Zoning Restrictions on Housing Supply

Posted on November 10, 2018 by | 15 comments

Source: StatChat blog

Unaffordable housing is a problem for more Virginians today than it was during the 2000s housing bubble. Median rent has increased at three times the rate of incomes since the end of the recession, says Hamilton Lombard with the Demographics Research Group at UVa on the StatChat blog.

Among Virginians earning between $35,000 and $75,000 (the second from bottom income quartile), the share of income they spend on rent above the HUD-recommended limit of 30% reached 41% last year, nearly double pre-recession levels. The share of 18- to 34-year-old adults living with parents  surpassed 45% last year.

In Lombard’s analysis, the problem can be traced to an imbalance in supply and demand. To house its growing population, Virginia needs to build more than 40,000 new homes each year. As can be seen in the chart below, home builders have been erecting around 30,000 a year.

When new homes are built, they tend to be geared to higher-income households because those houses have the highest profit margins. In a properly functioning housing marketplace, however, as housing stock ages, it depreciates in relative value and becomes affordable to households lower in the income spectrum. In a process that economists refer to as “filtering,” aging houses continually replenish the supply of lower-cost dwellings. A higher rate of new home construction accelerates the filtering process. However, writes Lombard:

In Virginia, where fewer new homes are being built, census data shows that many of Virginia’s older homes are not depreciating in relative value as quickly as in past decades (particularly in Northern Virginia), indicating that the filtering process has slowed. This lines up with [the] analysis that found filtering is typically slower in regions with rapid home price increases and low rates of new home construction. Rising home prices and a limited supply of new homes often encourages investors and home buyers to demolish or renovate older homes that might otherwise have become low income housing.

The slowdown in new construction is at the root of Virginia’s affordable housing crisis, which contributes to ancillary problems such as the rise in homelessness and the increase in the number of evictions. If we want to solve these “downstream” problems, we need to address the source. Why has home building slowed down? I would argue that home builders would eagerly meet the demand for new housing if only they could get the required zoning permissions.

For decades it was relatively easy to get permission to build low-density cul-de-sac subdivisions on the urban fringe, but housing preferences have shifted decisively toward walkable urbanism closer to the urban core. Re-developing real estate at higher density in established areas runs into intense neighborhood resistance, which throttles the supply of new housing projects. Meanwhile, zoning policy has all but exterminated affordable-housing options such as boarding houses, single-room-occupancy housing, granny flats, garage apartments, and construction of new trailer parks.

Bacon’s bottom line: Parents, if you want to get your 24-year-old kid out of the house, support the rollback of zoning restrictions! Even if developers want to build luxury condos, they’re still contributing to affordable housing simply by increasing the housing supply. Market-driven development will even advance social justice by easing evictions and homelessness!

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Posted in Housing, Poverty & income gap

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“Government Failure” in the Housing Market

Posted on November 6, 2018 by | 14 comments

Something is seriously out of whack here. The Richmond Redevelopment and Housing Authority (RRHA) has a vision — a commendable one, I might add — of demolishing the city’s six public housing projects to end concentrated pockets of poverty, crime, substance abuse and social dysfunction. But it turns out that the price of developing new mixed-income apartments runs around $250,000 per unit.

The RHHA has concluded that it would be significantly cheaper to renovate the existing public housing stock at the cost of roughly $50,000 to $60,000 per unit, reports the Richmond Free Press. New construction would take about 30 years to replace the 3,300 public housing units. Renovations would cut the time to 10 to 15 years. De-concentrating poverty, it appears, is no easy task.

But how can it cost $250,000 to build a new public housing apartment unit? At right is a townhouse on the market for $250,000. It has 2,349 square feet with the following features: two and a half bathrooms; a one-car garage, and a master suite with huge walk-in closet and en-suite bath with jetted tub, shower and double vanity. It is located within 10 minutes of downtown, Carytown, VCU, and James River trails and parks.

If townhouse living isn’t your style, then there are numerous single-family dwellings in suburban neighborhoods. For example, the house at left is also on the market for $250,000. It has 1,900 square feet, two-and-a-half baths, a fenced backyard, a two-car garage, and “a glamour bath with Whirlpool” tub.

How big are the RRHA’s new public housing units? What amenities do they have? Was RRHA proposing to place poor people into units normally affordable by the middle-class as part of its proposed “mixed-income” projects — in effect vaulting low-income public-housing residents into vastly improved housing conditions? Did it run up costs by ensnaring the projects in bureaucratic red tape? Or is there some other explanation?

The justification for “public” housing is that government can address “market failure” in the housing market by providing shelter for lower-income Americans at a lower cost than private industry can. Clearly, there is no market failure in Richmond’s middle-class housing market. The failure more likely is a regulatory one in which local governments have zoned affordable housing categories — boarding houses, Single Room Occupancy rooms with shared amenities, garage apartments, granny flats, trailers, and converted cargo containers — out of existence.

Still, it astonishes me that the best RRHA can do is $250,000 in new construction or $50,000 for renovated units. What’s the opposite of “market failure”? Government failure? That, it appears, is what we’re dealing with here. Pity the poor who find themselves wards of the state.

14 Comments

Posted in Housing, Poverty & income gap

Would an Eviction-Diversion Program Help or Hurt?

Posted on July 17, 2018 by | 5 comments

Renters-rights defenders and landlord advocates may be reaching common ground on how to reduce the rate of evictions in Richmond: Create an eviction diversion program. Reports Ned Oliver in the inaugural edition of the Virginia Mercury:

Planning is still in its early stages, said [Martin Wegbreit, director of litigation at the Central Virginia Legal Aid Society], but it would likely be modeled on similar efforts in other states, like Michigan, where Kalamazoo County established a program in 2007 as part of an initiative to reduce homelessness. In the Richmond area, more than 30 percent of homeless residents surveyed last year said they had been served with an eviction lawsuit, according to a recent survey by Homeward, a nonprofit that coordinates services for homeless people. …

The one-time program is geared toward low-income families and individuals who can afford their rent but fell behind after an unexpected financial emergency such as a car crash or medical problem. To qualify, they must demonstrate that they are no more than three months behind in rent and show that they will be able to afford their rent once the assistance ends.

Renters-rights proponents like the idea because it reduces the number of renters evicted from their apartments. The program in Kalamazoo assisted 412 households last year, providing $138,000 in rental assistance, an average of $300 to $350 per family.

Landlords like the idea because it provides funding to ensure that they get paid rent on time.

A big question, unaddressed in the article, is where money would come from for an eviction diversion program. NAlso, n one pretends that such a program would settle all the issues between renters and landlords.

Bacon’s bottom line: The eviction-reduction movement is no more than a palliative for underlying social and economic problems: (1) the tightening shortage of affordable housing in the Richmond region, (2) the inability of poor people to find and sustain living-wage employment, and (3) the inability of some people to manage their personal finances responsibly. Until we address the underlying issues, the problem of evictions will always be with us.

Still, I’m a big believer in conducting small-scale experiments, which, if successful, can be replicated and scaled, and, if unsuccessful, can be shut down. The key in an eviction-diversion program is not to measure the number of families assisted but to measure the number of evictions. If a program creates a moral hazard in which renters, knowing that assistance is available, become more lax about husbanding their money, it would be counterproductive. If experience shows that moral hazard turns out not to be an issue, and if the number of evictions demonstrably decline, then the program could prove its worth.

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Posted in Consumer protection, Housing

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Use the Tenant’s Money to Cure the Tenant’s Rent Shortfall

Posted on June 24, 2018 by | 7 comments

by Martin Wegbreit

Recently, Virginia drew national attention for reportedly high eviction rates, especially in central Virginia and Hampton Roads. This has inspired many efforts to address the issue. These include a Campaign to Reduce Evictions, an evictions workgroup at the Virginia Housing Commission, and a possible Eviction Diversion Program in Richmond and elsewhere. These initiatives may result in changes that decrease the number of evictions and benefit both tenants and landlords.

One partial solution requires no change at all: Use the tenant’s money to cure the tenant’s rent shortfall. The Sunday April 8, 2018, New York Times article about evictions reported that the median amount owed in a non-payment of rent eviction in Richmond was $686. By contrast, a Virginia landlord may hold a security deposit of up to two months’ rent. With an average monthly rent in Richmond of $1,269, a typical landlord may hold around $2,000 of the tenant’s money.

And the security deposit is the tenant’s money. It is not the landlord’s money. The landlord is a fiduciary, or a trustee, holding the tenant’s money and using it only for a permissible purpose.

In most cases, the tenant’s security deposit is not an issue until the tenant has moved and been gone for 45 days. During that time, the landlord either must refund the security deposit or provide a written accounting for how the funds were used, or some combination of the two.

A Virginia landlord also may use the security deposit during the tenancy for any permissible purpose. This includes payment of rent owed. The law, part of Code of Virginia §55-248.15:1, is clear: “The landlord shall notify the tenant in writing of any deductions provided by this subsection to be made from the tenant’s security deposit during the course of the tenancy. Such notification shall be made within 30 days of the date of the determination of the deduction and shall itemize the reasons.”

In 38 years of legal aid practice in Virginia, I never have seen or heard of a landlord deducting a rent shortfall from the security deposit, and seeking a repayment plan to replenish the funds, rather than undergo the time and expense of filing a non-payment of rent eviction. Unquestionably, tenants who intentionally or habitually fail to pay their rent deserve an eviction lawsuit, a judgment of possession, and eviction by the sheriff. But true hardship cases ought to be treated more humanely. Use the tenant’s money to cure the tenant’s rent shortfall.

A tenant’s non-payment of rent should not be subject to a “one size fits all” solution of an eviction lawsuit. Landlords have in their own hands a partial solution to lower eviction rates. Treat tenants like customers, not like a commodity to be disposed of whenever a problem arises.

Martin Wegbreit is director of litigation for the Virginia Legal Aid Society.

7 Comments

Posted in Consumer protection, Courts and law, Housing

A Partial Defense of RRHA Eviction Policies

Posted on June 21, 2018 by | 6 comments

Creighton Court, a public housing project run by the Richmond Redevelopment and Housing Authority. Photo credit: Richmond Magazine.

I never thought I’d find myself defending the Richmond Redevelopment and Housing Authority (RRHA), which I criticized last year for running up a $150 million maintenance backlog on its 4,000 public housing units. But the wheel of public policy debate turns in unexpected ways. Now, RRHA is being dinged for its high eviction rates.

Here’s the background courtesy of the Richmond Times-Dispatch:

Evictions in Virginia drew national attention earlier this year after a New York Times report on a nationwide study done by Princeton University’s Eviction Lab showing Richmond as having the second-highest eviction rate in the country, with Hampton, Newport News, Norfolk and Chesapeake also in the top 10.

How the agency chooses to pursue those who do not pay rent on time was the subject of a Richmond Times-Dispatch analysis, which determined no landlord in Virginia threatened to kick out more of their tenants last year than RRHA.

Needless to say, many if not most residents of Richmond’s public housing projects are living on the edge. They’re the poorest of the poor, subsisting on minimum wage jobs if they work at all. Sure, some may qualify for food stamps, earned income tax credits, Medicaid, the Children’s Health Insurance Program, Temporary Assistance for Needy Families, energy assistance, free cell phones, housing subsidies, legal aid, and other government-welfare benefits, not to mention soup kitchens, toys for tots, private-school scholarships, and a panoply of charitable programs, but their lives tend to be chaotic and they live paycheck to paycheck. All it takes is one financial setback, and they can’t find money for rent.

As the housing provider of last resort, RRHA arguably has the least credit-worthy customer base of any landlord in Virginia. I’m not the least bit surprised that it has the highest eviction rate.

Let’s ask ourselves, what would happen if RRHA adopted practices, either voluntarily or under compulsion of state law, to curtail evictions by means advocated by tenant-rights groups? What if RRHA extended the length of time for tenants to come up with the cash?

First, would late payments and eviction rates noticeably decline, or would tenants just adjust expectations push up against the new limits like they pushed up against the old?

Second, would RRHA suffer a diminution of cash flow?

And, third, if it did, what would be the consequences? Would RRHA have less money to pay for desperately-needed repairs? Put another way, to what extent would showing clemency to those who fail to pay their rent on time impact negatively those who do?

My problem with social justice warriors is not that they have compassion for poor people (some of whom deserve compassion and some of whom don’t), but that they propose remedies without taking into account the unintended consequences. No one knows the answers to the questions raised here. Some unintended consequences are entirely foreseeable, but no one seems to care.

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Posted in Housing, Poverty & income gap

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