Thursday, January 30, 2014

Absentee owners often the root of ‘the renter problem’

By Pam Bailey, NeighborWorks America blogger

It’s a common perception among homeowners that neighborhoods go downhill once too many renters move in. Anecdotes abound of rental properties with peeling paint, dilapidated porches and other problems.

However, says William Rohe, director of the Center for Urban and Regional Studies at the University of North Carolina at Chapel Hill, “there's a lot of research to show that rental properties are kept up as well as homes, and when they're not, it's usually the landlord, not the renter, who is to blame.”

In the wake of the housing crisis, large numbers of buildings whose owners were facing foreclosure have been bought up by investors – with little incentive to keep them in tip-top shape, given the demand for affordable housing.

“In Silicon Valley (San Jose, CA), there isn’t much incentive to improve property (among absentee owners), because they can still command high rents,” says Matt Huerta, executive director of Neighborhood Housing Services of Silicon Valley, a member of the NeighborWork network. “It’s a huge issue, impacting every neighborhood.”

Huerta echoes the complaints of many nonprofit housing professionals, but what sets his organization apart is that the group decided to help renters – and the neighborhoods – bring owners to the table through a mediation program. The idea blossomed three years ago when NHS sent a team of resident volunteers to NeighborWorks America’s Community Leadership Institute. The team was challenged at the event to identify and develop an action plan to address a pressing local challenge, and they focused in on absentee owners.

The result is the Responsible Landlord Engagement Initiative (RLEI), a program that provides a forum to which residents and neighborhood organizations can take complaints about neglected property and irresponsible tenant/landlord behavior. RLEI staff investigates the charges, then finds and contacts the owner -- inviting the company or individual to collaborate on a solution, or face the consequences.

“Half of the time, the owners plead ignorance,” Huerta says. “Others immediately admit to the problems and are embarrassed – or, at the other extreme, deny there is an issue. We emphasize support and collaboration, but there are options to force action if needed – ranging from small claims court or class-action lawsuits, to the city attorney’s office in the case of serious code violations.”

A before-and-after photo shows how this absentee-owner-intervention program was able to convince one homeowner to clean up his property.
This is a before-and-after photo, showing the unsightly mess at one rental
home before RLEI intervened, and the cleaner look after.
To date, the RLEI has accepted 21 cases, and for all of them, some degree of success has been achieved, although a few have required more than a year to fully resolve. For example, owners have improved safety by installing surveillance cameras and sensor lights, reduced blight by implementing better trash pick-up procedures and repairing structures, become more responsive to community concerns by replacing property managers and initiating neighborhood-involvement programs. One recent example of an RLEI success story is featured in a video on the NHS website.

A large part of that track record is due to the broad-based involvement in the steering committee that runs the RLEI, including representatives from NHS as well as United Neighborhoods of Santa Clara County (a coalition of more than 100 neighborhood groups), the Tri-County Apartment Assn., the Law Foundation of Silicon Valley, the city council, the mayor’s office, the police department and the local housing department.

The program has proved to be so popular that when the original funding from a city re-development agency was cut back, the NHS of Silicon Valley self-funded it, supplemented by individual city council members and a NeighborWorks America Impact Grant to assist with training for capacity-building. However, a new infusion of funds is hopefully coming early this year from a major foundation.

“More funding will enable us to build an online toolbox and database, so the program can be a model for others across the country,” says Huerta.

The next blog post will explore innovative ways to bring renters and homeowners together as "just neighbors."

2 comments:

Matt Huerta said...

Thanks for highlighting how RLEI helps both renters and homeowners. On many cases we also coordinate closely with the Mayor's Gang Prevention Task Force and help bring landlords into the equation for long term physical and social fixes at their properties. It's about making structural changes that can be sustained without a lot of governmental support. Promoting Neighborhood Ownership Works!

Pam said...

Update: The Joint Center for Housing Studies recently conducted research for the Urban Institute to assess the scale of investor activity in neighborhoods in one hard-hit market that includes Boston and other communities in Suffolk County, Massachusetts.

The report concluded that private investors appear unlikely to take into account the effect their property may have on surrounding properties in deciding how to manage their investments. In cases where a neighborhood needs higher levels of rehabilitation, public subsidies or housing code shifts may be needed to spur this investment.