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How to Lower Rents, Homelessness and Evictions in MA

The bills are now the topic of a “public hearing” that has been called for 9:00 a.m. this coming Tuesday, July 28.

Because of Covid-19, ONLY WRITTEN TESTIMONY will be received.
Click on this link to submit written testimony:
https://forms.gle/z7uEKUeQKWi2ocyD7.
If you have any problems using the form (it doesn’t work or not enough space for your testimony), email your written testimony to:
Kelly.Mallon@mahouse.gov.   
The deadline for all testimony is 12 noon on Tuesday, July 28. 
 
EVERYONE needs to submit testimony !!!

You can use ideas from my article below or copy and paste phrases, sentences, paragraphs or the whole article and use it as your testimony. It is similar to what I have written before but I have added some things and edited others.

 

 

 

7-24-20

My blog http://MassachusettsLandlords.com has become one of the most popular landlord-tenant sites in MA and I have been a landlord for about 22 years currently managing 45 apartments. Several weeks ago I wrote about Chapter 65 Law the so called “Eviction Moratorium” here http://MassachusettsLandlords.com/eviction-moratorium.

It’s quite deplorable that rep. Kevin Honan (why is this clearly biased person still a Chair of the Housing Committee?) and rep. Mike Connolly are using the cover of a Pandemic when people are actually dying to push their old and tired ideas over which they and the free tenant lawyers/tenant lobbyists who have written this bill have been salivating and scheming to pass for decades. No perfectly good Pandemic should go to waste, right? All their golden hits are in this wet dream bill – rent control, the so called “just cause” evictions, creating artificially positive credit reports for tenants by prohibiting rent debts appearing on their credit reports, creating artificially positive housing history for tenants by prohibiting evictions to be visible to landlords, eliminating no-cause evictions, lengthening time to cure lease violations from 7 days to 30 days, freezing rent increases regardless of inflation, canceling the ability to enforce private contracts, turning every minor action or inaction of the landlord even when done in good faith into a 93A violation so they can be assured they will get their attorney fees paid by the landlord, etc.

On his blog Rep. Connolly is pulling his hair out because he says there is a backlog of 20,000 evictions waiting to be unleashed the moment the current Ch.65 Eviction Moratorium expires.

And whose fault is that?

We, the landlords, told the Legislators that this was going to happen and they ignored us. We told them that the “eviction moratorium” is going to create a massive backlog of evictions; we told them that it will increase the self-help incidents and we told them it was not the way to go but they didn’t listen.

We told them so.

This situation reminds me of what Trump does all the time. Because of his incompetence he causes some unnecessary crisis and then he goes on TV to pat himself on the back how well the crisis is being fixed by him.

Now the tenant lobbyists who wrote this bill without the input from landlords, just like they did with Ch.65, want to extend the moratorium with another 12 months to “fix” all those piled up evictions caused by Ch.65?

The mistake that the state legislators made in the Ch.65 Eviction Moratorium is that they made tenants whole by letting them not pay the rent (oh, excuse me, postpone paying the rent) but did not make the landlords whole by paying the missed rent directly to the landlords. Deferred rent is unpaid rent because most tenants are judgment-proof in MA.

What did they expect would happen?

Here is the right way to do this:

If the State wants to order tenants to stay home and not move because it has some scientific data showing that just moving from one apartment to another spreads more Covid-19, the legislators should go ahead and order them to stay home and should create a law that penalizes them if they move but they should keep in mind that there are legitimate situations that are sometimes beyond the control of the tenants and that require them to move. I just don’t think it’s necessary or possible or constitutional to order people not to move. Keep in mind tenants are already not moving much even without any orders from the State. On average I see each year about 20 of my tenants move, this year so far – only 4.

If the goal is to lower the rents in MA the way to do it is to increase supply of available apartments. How does one do that? By relaxing certain non-safety related regulations and costs to developers and by allowing multi-family zoning where currently only single-family is allowed. Research shows that single-family zoning was historically rooted in racism and it’s an effort to prevent “undesirables” (blacks, browns, immigrants…) from spoiling their “good” neighborhoods so we say increase their taxes until they allow multi-family zoning and use the money to make landlords whole during this Pandemic.

If the goal is to lower evictions, one needs to remove the root causes of evictions. There are 3 types of evictions – 1) for non-payment of rent, 2) for no-cause or because the lease term simply expired and 3) for lease clause violations, the so called “for cause” evictions.

To eliminate the non-payment evictions, someone needs to pay the rent. If the tenant cannot pay it then since it’s in the interest of the State for that tenant to remain in their apartment due to Covid-19 then the State needs to find a way to pay it directly to the landlord. If the State wants to help only those tenants who are not paying the rent due to Covid-19 related reasons then the State should pay their rent and we will go to court to try to evict the tenants who are not paying the rent unrelated to Covid-19. If the State feels that no tenant should be evicted right now for non-payment then the State can cover all the unpaid rents regardless if Covid-19 related or not.

It looks like HD.5166 (H.4878) is giving the landlords an option to delay paying of our mortgages but even that is done in bad faith and with unacceptable strings attached. It is offensive. Even if it was done with no strings attached it would still be offensive. Mortgages are only a small part of where the rent money goes into! We also use the rent money to pay city taxes, state taxes, federal taxes, water, trash, electricity, gas, oil, property insurance, liability insurance, workers compensation insurance, umbrella insurance, work car insurance and car maintenance, health insurance, grass, snow, repairs to the apartments and the buildings, wages to maintenance workers and contractors, and finally we keep what’s left which is usually about 10% of the rents in profits to pay ourselves and put bread on the table for our families. So we need the whole rent in order to be made whole not just a break on when we pay our mortgages. And without making the landlords whole the State has not eliminated the root cause for the non-payment evictions and they will keep piling on. On top of that in Section 6 (c) the Bill requires landlords for each month they get loan forbearance to “waive and forever hold tenants harmless from the obligation to pay that month’s rent for each rental unit located on the property” unless the landlord demonstrates by clear and convincing evidence (way too high of a threshold) that the loss of income is not Covid-19 related (information which the landlords do not have, only the tenant has). WAIT, WHAT? So this whole thing about the mortgage forbearance is not giving anything to the landlords. It’s a trap requiring us to waive receiving our rents from the whole building! So we can’t even ask the banks for mortgage forbearance because that comes with legally forgiving the whole rent.

So the bottom line for non-payment evictions is this – if the State wants to eliminate non-payment evictions, someone needs to pay the rent, the full rent, to the landlords. And by the way what is this nonsense about the State paying you the rent only if you own less than 15 apartments? What difference does it make if the landlord owns 1 or 15 or 1500? When the rent is unpaid, that’s an eviction waiting to happen and it’s piling on. If the State truly wants to eliminate that non-payment eviction, the State needs to pay the landlord. Also keep in mind we are not like other businesses. A business owner whose business is shut down can go to the beach. Yes, there are no revenues, but there are also no or almost no expenses too. We are the only business owners forced by the State to continue going to work every day for free because we are still required to pay the utilities (like electricity and water) used by the tenants and to maintain the apartments as required by the Sanitary Code. Our product is still being used and required, we are just not being paid for it.

If one wants to eliminate the “no-cause” or “for cause” evictions it gets a little more complicated.

There are life situations where the landlord may really need to use her property – maybe a new job, maybe a death in the family, maybe an addition to the family and in those situations it’s unfair to prevent the landlord to access their own property. So that should be left as is. The “for-cause” evictions should be left as is too. Right now we can give someone 7 days to cure a violation if the Lease allows it. This bill wants to change that to 30 days but that is not doing anybody any favors because the landlord, the other tenants and neighbors have to live with the bad behavior of the tenant LONGER. That makes everybody’s lives harder except for the tenant who exhibits the bad behavior. That’s not the result the State should want. The notice to quit (or cure) should be shortened to 3-days like in most other states not extended to 30 days. Here are some examples of causes and while you read them think about you and the neighbors having to live with that for 30 days while the notice expires and the landlord is helpless to do anything – sub-letting to registered sex offenders or drug dealers, illegal vicious dogs, too many people living there, loud parties all the time, smoking, using drugs, fighting with other tenants, flooding downstairs apartments, dogs barking all the time, unpicked dog poop everywhere, damages done by pets, creating unsanitary or dangerous conditions inside or outside, refusing to allow access, blocking common areas or exits, removing batteries from smoke or carbon monoxide detectors, etc. The notice to quit or cure for these things should be 3-days so either the “for cause” evictions should be left as is or the notice should be changed from 7-days to 3-days.

By the way, how do you lower “for cause” evictions? You lower them by educating people to be better parents and educating children to be less selfish, to assume personal responsibility, to have more empathy, better self-control and that the world does not rotate around them and doesn’t owe them anything but that’s a tough project that takes decades. We can’t waive a magic wand and expect overnight people to stop engaging in these and similar behaviors and causing their own evictions. 

Let me also address the push that tenant lawyers and lobbyists are making in this bill and in general to create artificially better credit reports for tenants by prohibiting rent debts appearing on their credit reports and to create artificially better housing history for tenants by prohibiting evictions to be visible online to landlords.

Naturally tenant lawyers want to block derogatory tenant information from appearing on their credit report or housing history. In this bill they want to prohibit rent debts from appearing on the tenant’s credit report and want to prohibit landlords being able to see online the eviction history of the tenants. That’s because tenant lawyers secretly like evictions because evictions keep them employed. But the State as a matter of public policy should want less evictions not more. If landlords are forced to rent to tenants with fake good credit reports and eviction history, that’s an eviction waiting to happen anyway down the road because the credit and eviction history might look good but it’s the same low quality tenant hiding behind them so chances are it will lead to an eviction at some point. Bad for the tenant, bad for the landlord, bad for MA (but good for the tenant lawyers though).

If one wants to lower evictions, don’t give us fake credit reports and eviction histories. Landlords need more information not less to make fair decisions.

If the concern is that landlords are not renting to tenants with bad credit reports, then the State should set up a system where no debtor is above the law (judgment-proof) and give these tenants the opportunity to gradually pay off their debts by requiring them to do community service jobs or other state infrastructure jobs on weekends or in their spare time that pay a fair wage and pay that wage directly to the creditor. Help tenants assume personal responsibility and fix their credit reports by their community service employer directly paying those collection agencies which will improve tenant’s credit and paying their ex-landlords in exchange for the landlord removing the derogatory record in Housing Court.

If the concern is that sometimes people have similar names and sometimes tenants may get denied housing mistakenly because of another person with the same name who has multiple evictions, then the law should require that the middle initial and year of birth is entered by Housing Court personnel into the docket information. Providing more information (not less) is the way to make fewer mistakes.

In conclusion, Bill HD. 5166 (H.4878) is a total disaster. I have rarely seen such an incompetent, anti-landlord and anti-business bill. It will mess up the whole economy of MA if it becomes law. It’s also unconstitutional just like Ch.65 for the simple reason that the Legislature cannot order another co-equal branch of Government, the Courts, to close their doors and stop seeing litigants for non-payment of rent or for whatever reason, the same way the Courts cannot order the Legislature to close its doors. And that’s not the only reason why it’s unconstitutional. It’s quite amazing that so many legislators (87 so far, that’s about 43% of the Legislature!) have rushed to sign on to it and are willing to stake their name and reputation on it.

If this new bill becomes law or if Ch. 65 “Moratorium on Evictions” keeps getting extended as it was done several days ago from 8-17-20 to 10-17-20 please understand that unrealized evictions will keep piling on, self-help attempts by desperate landlords to reclaim their property will inevitably increase, many landlords will go on strike by keeping their units unrented and the economy will take a serious hit down the road.

MA should not make the same mistake as it made in the so called “Eviction Moratorium” Chapter 65 law  by just making the tenants whole. It should make both the tenants and landlords whole by paying the unpaid rent directly to the landlord, we need the full rent paid by the State, not just a mortgage postponement and paid to all landlords, not just those with 15 units or less.  It’s good that the State is helping the tenants by increasing funding of RAFT and similar programs but it needs to figure out what to do with tenants who refuse to pay the rent despite of the availability of funds by RAFT. We feel that the only institution equipped to decide if there are legitimate reasons for not paying the rent like, for example, poor conditions, or if the tenant is abusing the situation with the Pandemic is the MA Courts. But of course we are unconstitutionally being prevented by the legislature from petitioning the courts. Making both landlords and tenants whole is THE ONLY way to truly lower evictions and it’s the only way to prevent the economy from collapsing by destroying the middle class of landlords. If the Legislators don’t do the right thing now, we, the people, will have to come up with a much bigger stimulus package later to fix the destroyed economy.

 

And don’t say we didn’t warn you.

 

Elmir Simov, http://MassachusettsLandlords.com, founder, e@massachusettslandlords.com