Local Government
Commentary: The Consequences of Bad Housing Laws

Commentary: The Consequences of Bad Housing Laws

By Timothy L. Coyle.

If you think being a rental housing owner in California is frustrating and nerve-rattling, read what is being said about property owners in Seattle:

My landlord is a dying breed.  He’s a middle-class guy who owns and rents out the tiny house we live in, built in the 1950s on the other side of the lake from Seattle. That house is his retirement plan.  But, he’s terrified the misguided policies infecting Seattle’s housing market will spread across the lake.  If that happens, my landlord would likely sell, as many Seattle landlords are doing now.

This comment was made recently by a Pacific Legal Foundation lawyer who happens to be renting a home in the most-fabled city of the northwest.  His landlord risks getting hit with a Seattle ordinance which forbids owners from checking criminal backgrounds or considering prior criminal convictions when selecting tenants.

If this sounds familiar to Californians, it is.  A few years back, then-Assembly Member Steve Bradford carried legislation to outlaw criminal background checks by landlords.  Although the bill was withdrawn, Steve Bradford is in the Senate now and the politics around this profound change in tenanting law are still swirling.  The newly adopted Seattle ordinance is a case in point.

When added to California’s endless rules stipulating how property in the state will be rented, this ordinance like others would further curtail a landlord’s right to use his or her property and raises serious safety and financial concerns.  But, ironically, it hurts the provision of affordable housing too.  Indeed, faced with the added risk of renting under this new law, property owners are sure to either raise rents or, rather than trying to get by, will simply get out of the business.

What a sorry situation that would produce.  In response to these terrible new rules, tenants will either pay higher rents; see increased housing shortages; face the rigid rules of well-capitalized corporate leasing/management companies – which are able to spread their risk across a larger number of rental units – or all the above.

Moreover, the combination of ever-increasing rules for renting residential property in California and the state’s woeful lack of supply chases more and more mom-and-pop landlords from communities.  This is particularly bad for tenants:  small property owners tend to offer lower rents and they are typically more understanding when rent checks are late.  They also tend to be more forgiving when it comes to household repairs – whether caused by residents or not.

One can understand the thinking of elected officials when they propose new laws or local policies that, for example, ban criminal background checks.  Society should want to help ex-offenders move on from their troubled pasts.  Accordingly, rental properties should be accessible to all.  But, good intentions won’t keep insurance premiums low or keep properties safe.  Furthermore, don’t those same elected officials have a constitutional duty to protect the rights property owners too?

Like it or not, the private sector – particularly in California – is filling an important gap in local housing markets.  If private individuals weren’t there to rent out the properties they own then government would have to do it.  And, among the most abiding truisms for us public-policy watchers are that 1) government doesn’t now have nor ever will have the funding to house everyone who rents today and 2) in providing said housing, it would do an everlastingly lousy job.

Increasingly, the City of Seattle is forcing the fundamental rights of everyday citizens to take a back seat to the interests of political correctness.  We risk doing the same thing here.

Being sensitive to the needs of ex-convicts shouldn’t come at a cost to the constitution.  Nor should any law.  But, if California doesn’t reverse the impulse to further regulate housing markets in the state, it will soon be:  “Hello higher rents; hello corporate management; hello more housing shortages;” and, “goodbye Mom and Pop.”

Originally posted at Fox & Hounds Daily.

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