City Council finalizes an ordinance requiring inspection of rental housing tonight. This took six years of relentless effort. If you wonder why this is necessary, read on. My best writing is inspired by anger.
The Slumlord Business Plan
Searching for an affordable rental home, you can try to avoid those that are neither safe nor sanitary, but in a tight market, there are few choices available. You might have to take what you can get. When we eat at a restaurant, what we take for granted is consumer safety. Food vendors are inspected for compliance with health and safety codes. Imagine restaurants inspected only after you file a complaint. That is how rental homes are regulated.
After the lease has been signed, it is up to you, the tenant, to identify safety hazards and ask the landlord to fix them. If the landlord fails to do so in a timely fashion, you can file a complaint with the city. An inspection will be scheduled. Safety code violations verified by inspection are then subject to enforcement. It is ridiculous, said one tenant, to have to go to so much trouble just to get the landlord to do his job.
The landlord-tenant law is appropriate for disputes such as a retained deposit, but not for landlord failure to comply with building safety codes. Instead of creating an incentive for the landlord to attend to safety hazards of the building that are the subject of complaint, a landlord-tenant dispute provokes the landlord to defend himself against the complaining tenant.
The city receives relatively few complaints. This does not mean that there are few rental hazards. It means hazards are underreported. Tenants cannot accurately identify hazards, nor reliably report them. Tenants do not complain for fear of landlord retribution. That a hazard may be dangerous does not seem to make any difference. Many tenants will not report it to the landlord. Many will not file a complaint. The tenant complaint system is “highly ineffective” and “fosters the decline of rental housing”, according to the CDC (2008).
For slumlords, deliberate neglect can be a business plan. By foregoing maintenance and repairs, costs are reduced. Rent continues to be collected from tenants who have no other place to go. Buildings deteriorate, but while a neglected building diminishes in value, return on investment is being extracted in rental fees. The building is not an investment so much as a source of cash flow. It may be neither safe nor sanitary, but that is irrelevent. After the deteriorated building can no longer be rented to anybody, what remains can be sold or demolished.
The slumlord business plan is urban resource extraction. Deliberate neglect is non-sustainable business practice that exploits tenants and places them at risk. The rental industry defends the existing situation by insisting that most landlords are doing a good job.
Without inspection, there is no way to know whether any particular landlord is, or is not, doing a good job. However, to say that they are doing a good job seems like faint praise for those who use sustainable business practices, while being undercut by slumlords, who do not.
More than half of housing units in this city are rentals. A license would be an incentive for every landlord to do a good job. A rental licensing program was researched by city staff and was then modified by City Council, but the proposal did not go forward at that time. How about now?
We are told that the costs of rental licensing will be passed on to tenants. This implies a false choice. Given capable landlords and strong regulation, why can't there be both reasonable rent and safe rental homes?
City-supported rental licensing would level the playing field for landlords by eliminating the use of deliberate neglect. It would slow the loss of rental stock in the city. It would protect tenants by promoting rentals that are safe and sanitary. The current tenant-complaint system is weak and should be replaced with rental licensing.
The Slumlord Business Plan appeared in Cascadia Weekly, Feb. 19, 2014