By Heiner Giese, AASEW Legal Counsel
I. Activities on State Level
The Legislature's Joint Finance Committee continues work on Gov. Evers' budget. None of the Governor's proposals on housing issues (reported in the March newsletter), such as $66M for free attorneys for tenants, are likely to be adopted in present form. However, I did attend a meeting on March 23 in Madison called by Speaker Robin Vos to hear from housing providers and tenant advocates from Milwaukee and Madison. Rep. Rob Brooks, chair of the Assembly Housing Committee, participated.
His committee would draft legislation. Issues discussed were (1) defining "reasonable diligence" as used in the statutes when making attempts to serve a defendant with an eviction notice or summons and complaint in a small claims case; (2) clarifying by statute what amount of late fee is allowable; (3) modifying the tenancy notice statutes to specify that a 60 day or longer notice of termination of tenancy is permissible – a subtopic here is a prohibition on winter moveouts; and (4) creating a statute acceptable to both landlords and tenants on when eviction cases can be sealed.
There will likely be follow up meetings.
II. Activities on Local Level
A comprehensive report on Milwaukee County's Right to Counsel program being run by Legal Aid (they call it EFM, "Eviction Free Milwaukee") by Stout Risius has been published for the period September 2021 through December 2022. The report claims that providing attorneys to defendants (at a cost of $3M) has been very successful in avoiding or delaying evictions and has saved governments $9M in eviction-related social costs.
To its credit, the report acknowledges that the delays and refiling of nonpayment cases have a negative effect on owners. This results in tighter screening (hurting marginal tenants), increased security deposits demands and likely rent increases.
The biggest shortcoming of the report is that it does not acknowledge the millions of dollars in lost rent from evictions. The report does not even give statistics on how much rent is owed in the cases being handled by Legal Aid, though it says it will try to include this data in next year's report.
I had an interesting email exchange with Greg Borowski, Executive Editor of the Journal Sentinel regarding a recent tragic north side Milwaukee fire where three people died. The reporters on the first version of the story – which had a huge headline in the print edition the next day – did not check who owned the property and implied that it was a rental property without working smoke alarms. The JS tried to tie this tragedy into their series alleging dangerous electrical fires are mostly the fault of landlords. However this fire was not electrical in nature and the property was owner-occupied.
The JS corrected its false implications in a follow up story the next day.
Your AASEW Executive Board and I will have another meeting in early April with a team from the Medical College of Wisconsin on the topic of lead-safe housing.
A lot of financial resources are being dedicated to this topic so we want to give advice on how to spend the money effectively.
At the February membership meeting I gave an alert that WE Energies appeared to be improperly charging sales tax on residential gas and electric bills during the winter months. If you are paying for heat, hot water or lights for a residential unit or for an entire building check your billing since November.
Governor Evers’ Budget Proposals on Housing
Governor Evers announced a number of housing provisions in his state budget bill.
The Governor wants to eliminate landlord/tenant measures which were enacted since 2011, which the Republican leadership in the Assembly and Senate is bound to reject.
Other highlights of his program affecting rental properties are as follows:
Five million dollars to create a Housing Safety Grant Pilot Program for Milwaukee to support improvement of rental housing safety, including:
There is $100 million in funding proposed for homeowners and for municipalities to rehab blighted properties. It’s unclear if rental owners would have access to those funds.
It’s proposed that localities could impose their own moratorium on evictions [with no mention of paying owners for their lost rent] .
Another new law would require landlords to disclose serious building code violations “regardless of whether the landlord has actual knowledge of the violation.” [Of course landlords should disclose serious defects but if they haven’t seen them how can they be disclosed?]
Most concerning to us is the proposal to spend “$60 million over the biennium to create a new civil legal assistance program for low-income individuals, focusing on establishing a statewide right to counsel for evictions.”
[So lawyers would earn millions in fees. Couldn’t that money be better spent providing rent relief for the over 90% of tenants in eviction cases who have fallen behind on their rent?]
Better Regulation of Storm Water Utility Charges
You are all familiar with the storm water utility fee which shows up on your quarterly water/sewer bills. Those fees vary widely between municipalities and are sometimes unfair.
For example, Wauwatosa charges duplex owners twice as much as the owner of a single family lot while in the city of Milwaukee the charge is the same for duplexes and singles because the lot size is usually the same.
Tell your State Senator and State Representative to support a change in the law (LRB 1576) which would let the Public Service Commission regulate the often extravagant storm water charges.
First, an important correction to my January report: I had said that Emergency Rent Assistance funds were likely to run out this spring but Connor Goggans of Milwaukee County Housing Division advises that funds should be available through summer. Here is his info on the situation:
SDC/City of Milwaukee and Community Advocates/County of Milwaukee have enough ERA 2 to last thru at least most of the summer, and it is very possible County will last a bit longer than that.
Further, despite ERA, Milwaukee County will always maintain our own Eviction Prevention Program for those with rent assistance.
Of course, this is not enough, as it does not serve most renters in Milwaukee County without rent assistance … but for landlords with rent assistance households, eviction prevention financial assistance will remain an option through that program.
This will be paired with our long-awaited landlord engagement programming and financial incentives that will finally get off the ground this year (we were able to see that we hire dedicated staff for landlord engagement again this year, but are scaling the effort and have a framework for a team, instead of just one person).
Second, the City’s ZND Committee (Zoning, Neighborhoods, and Development) has again delayed any action on a proposed ordinance to require all rental properties to carry insurance.
I appeared at a hearing on January 31 to point out the flaws in this proposal. The Dept. of Neighborhood Services had reservations because of administrative costs.
Another drawback for the City is that Milwaukee would have to purchase insurance coverage for the approximately 300 rental units (non public housing) which it owns and manages.
Third, DNS (Department of Neighborhood Services) Commissioner Erica Roberts presented the outline of a pilot program to do targeted inspections for substantial health or safety issues in rentals in sub-neighborhoods of the 53206 zip code.
This would be legal if the inspections are limited but the cost of $400,000 to hire two inspectors and clerical help could not be charged to owners. However, some money could be raised from noncompliance fees.
Fourth, the meetings with the County Court’s eviction diversion liaisons are starting up again in February. We are looking at ways to promote early mediation.
Gov. Evers will surely have a number of housing provisions in his budget proposal being announced mid-February. The Republican leadership in the Assembly and Senate is seeking input from owners and tenant advocates on issues which might get bipartisan support. We’ll keep you advised of these developments.
The big news was The White House Blueprint for a Renters Bill of Rights announced in late January. A fact sheet can be found here. It sets forth five “Principles”:
Various federal agencies such as Consumer Protection or the FTC will study and “promote renter protections” and set “limits on egregious rent increases.”
On the topic of evictions they propose that 30 days notice should be given for nonpayment and that “eviction case filings should immediately be sealed.” Tenants should have the right to counsel in all evictions. HUD is already awarding $20M in 2023 for that purpose.
We continued as a partner with Milwaukee’s Rental Housing Resource Center. There are few places in the country where housing providers, social welfare agencies and tenant advocates work together.
Owners were very happy to see the CDC federal eviction moratorium end in August 2021. Since then, and throughout 2022, the “eviction tsunami” predicted by national tenant advocates and biased academic researchers never materialized.
One of our frustrations was that the courts never enforced the CDC’s requirement that tenants had to use “best efforts” to make at least partial rent payments.
Of course the millions of dollars from the two Emergency Rental Assistance (ERAP) bills helped greatly to (1) keep eviction filings down and (2) helped resolve very many filed cases when landlords or their attorneys agreed to multiple months of adjournments while waiting for an application to be approved and then agreed to a dismissal and sealing of the case.
The often multiple months of waiting for Community Advocates and especially SDC to cut a check were frustrating.
It is good news that some funds remain for the next several months. Places like New York State and Texas ran out of funds a while ago already.
We had Tim Syth and now Meagan Winn coordinating efforts from the court system side. Chief Judge Mary Triggiano was very involved and responsive in listening to our concerns about how eviction cases were being handled by the court commissioners.
The Right to Counsel (RTC) program has been operational since September 2021. This has been a success for tenants in getting more time to move out or in negotiating a stipulation with the landlord to “pay and stay” and then get the case dismissed.
I personally had a case in April 2022 where the Legal Aid attorney negotiated a deal to have the tenant pay the current month and then catch up on arrears at $100 per month for the next nine months.
But I have watched dozens of cases on Zoom since April and often the RTC attorney would say the case was contested, get it kicked over to the judge a month later and then if the tenant lost or moved out the landlord lost an extra month’s rent compared to the days before RTC.
Very helpful to the tenant; extra cost to the owner. A money judgment against the tenant would then be larger. Also, if RTC got a case dismissed on a technicality instead of settling it, the landlord would re-file and there would then be two cases on CCAP under the tenant’s name.
Biggest improvement needed for 2023: The ERAP money will run out by spring. Then it won’t make sense for landlords to agree to an adjournment in a nonpayment case.
Already, some owners are requiring double security deposits because they have learned that an eviction will take an extra month due to the presence of RTC.
If the City, County and charities like United Way have come up with $4.5M to pay for RTC, we need to find funding for that extra month’s rent which the owner will lose while negotiating with RTC.
Also, there needs to be legal help funding for the unrepresented mom-and-pop landlord who is unfamiliar with the eviction process. There needs to be funding to push cases into mediation before resorting to a filing in court.
Owners are concerned that a change in HUD policy as of October 1 may be interpreted by defense counsel to require that the CARES Act 30 days notice requirement for nonpayment cases will apply to rapid rehousing programs run by agencies like Hope House.
This will deter owners from participating in such worthwhile programs which help the neediest tenants.
Sealing of eviction cases is a current and future issue. The Wisconsin Supreme Court will likely hold a hearing in early Spring on Legal Action of Wisconsin’s petition to seal non-money judgment evictions after only one year.
We have filed a response opposing this.
There is a research study put out by a think tank on How to Seal Eviction Records | Upturn . This is supposed to be a guide for legislation but it is useless because of preposterous conclusions such as “eviction filings are merely unproven allegations and have no legitimate value in rental decisions.” The executive summary for the study contains numerous other untrue assertions:
Amazingly, the study concludes that evictions should simply not be allowed: “we reject any premise that evictions should be permissible under a just housing system.”
The academic researchers who put out such bogus conclusions ignore the reality that well over 90% of evictions are filed for nonpayment of rent. Their biases make them ignore and distort the facts.
We will shortly learn which state legislators are to serve on committees dealing with housing. Chairpersons in both the Senate and Assembly will be Republicans because of their majority control. We are monitoring and working with both the Legislature and Governor Evers’ office because the Governor will surely have a number of housing-related items in his budget bill to be announced early next year.
On the federal level a report has just been put out by the Consumer Financial Protection Bureau (CFPB) which attacks the work of tenant screening companies. It says:
Tenant screening reports present summary information regarding filed evictions, often without any accompanying explanatory information as to the basis of the eviction filing. Landlords may choose to file evictions against tenants for a range of reasons, which may not necessarily be relevant to a different landlord, even if the filing ultimately results in an eviction.
Sure, evictions can be filed for a “range of reasons” but the report does not recognize that well over 90% are for nonpayment. So, that means that tenant screening reports are accurate for over 90% of the tenant records they report on.
Secondly, if the eviction was dismissed it is still fair to mention it in a screening report because a dismissal is seldom because the tenant “won” their case; it’s usually because the tenant paid up arrears and continued the tenancy or moved out voluntarily and the landlord consented to dismissing the case (or simply dropped it).
Let’s compare tenant screening to screening an application for a credit card. If someone has a track record of often paying their credit card bills late, or maybe they got sued for an unpaid bill and then paid up and got the lawsuit dismissed it is certainly legitimate for a credit issuer to consider that pattern of behavior when deciding whether to accept them as a customer (compare: accept them as a tenant).
Another hot issue is the allegedly harmful effect of investors buying up single-family properties as rentals. Supposedly this results in prospective homeowners being outbid. But an article in Vox says preventing investment in single-family rentals “will only reduce the availability of single-family rental housing while making it more expensive — ultimately hurting the very people for whom access to affordably priced rental housing is so Essential.”
The City of Racine is doing a mailing to tenants encouraging them to call building inspection for an inspection of the “systems” in their unit. This runs afoul of the state statute requiring that a blanket inspection program can only be directed toward a blighted neighborhood; otherwise an inspection must be based on a complaint by a tenant about an existing defective condition.
If you are a Racine landlord, and receive an inspection that is not based on a complaint, please contact AASEW Attorney Heiner Giese at firstname.lastname@example.org.
Last week I had an in-person meeting with Meagan Winn who has been hired by the Milwaukee County Court system as Court Coordinator for the Eviction Diversion Initiative. She has prior experience in working on housing issues and has worked in other states on projects of this type.
I was able to give her an extensive overview of how the AASEW views the current housing market and the issues facing the eviction court in particular. She may become available as a resource to landlords, particularly pro-se landlords, who need guidance for an eviction filing or assistance to get their tenants into mediation to avoid a court case.
I attended a conference in Washington, DC on Oct. 17 titled “A Path to a Permanent Program” for emergency Rental Assistance. I raised questions as to why housing providers are not included in these programs (there were 250 people in person and another 1,000 on Zoom – but extremely few real estate investors).
Elisha Harig-Blaine, manager of Virginia’s Dept of Housing & Community Development, heard my complaint and spoke up to the federal government panelists from HUD and the White House: “Their voice [landlords] just seems to be absent from this conversation. I’m wondering what you can say as administration officials how you are reaching out to that sector – encourage them to come to the table.”
I was able to bring the detailed AASEW Eviction Study to the attention of HUD after the event.
On November 4 HUD announced that Princeton University and other academic outfits are getting $2 million to assess the impact of Emergency Rental Assistance “with a focus on housing stability and eviction outcomes.” Please send me your experiences so that I can forward the “outcomes” for landlords, both good and bad, for such reports.
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