National Eviction Crisis Finally in the Headlines

New Orleans    In the ACORN Home Savers Campaign we’ve learned a lot about the contemporary issues for lower income families struggling with the potentially predatory nature of land contracts as a route to home ownership, but in doing the organizing we have been constantly confronted with the reality that the real trigger for forcing people into these arrangements is the shortage of affordable rental units and the soaring eviction rates.  Thanks to a mammoth data project spearheaded by Matthew Desmond, author of the critically important book, Evicted, in 2017, and now a sociologist at Princeton, we now have some snapshots at how broadly distributed this crisis is in various parts of the country.

Desmond and his team looked at 83 million property records, and where the data was accessible, they found over 900,000 records of evictions.  His book focused on families in Milwaukee.  In truth the rates are high in that city and many other urban corridors, but they don’t lead this terrible league.

A map in the New York Times demonstrated the horror that lower income tenants are facing particularly in the Southeast and Midwest.  The majority of counties in South Carolina were in the highest percentile with Columbia the capital ranking number eight in the top ten cities in the country with the highest rates of eviction at 8.2% and North Charleston, South Carolina claiming the dubious title of number one with a rate that doubled Columbia’s at 16.5%.  North Carolina was hardly an improvement with most of its counties in the dark zones as well.  Virginia was right there in the bad zone alongside the Carolinas.  Greensboro, North Carolina was their only city with over 100,000 population in the top ten at number seven, while Virginia scored across the board with Richmond in the second slot with an 11.4% eviction rate, Hampton in third place at 10.5%, Newport News in fourth with 10.2%, Norfolk in sixth with 8.7%, and Chesapeake in the tenth spot with 7.9%.

Add northwestern Alabama counties as well as Mississippi counties south of Memphis, in the Delta, and along the Gulf Coast, and if you’re a lower income tenant you need to leave Dixie behind.  Statistics weren’t available, probably because they were either not recorded or not accessible online in Kentucky, Tennessee, Arkansas, Louisiana, and Texas, but looking at the map in Oklahoma, I’d put money on the fact that they would give the rest of the south a hard run in the terrible eviction rate sweepstakes.  Tenants shouldn’t move to the Midwest though either.  Michigan is part of the new south in this sense and West Virginia and parts of Indiana and Ohio were ugly as well.  Warren, Michigan managed to make the top ten list of evictor cities with an 8.1% rate for the ninth spot.

Everyone knows that these numbers are an undercount.  Tenants falling behind often just move.  Landlords are able to evict far more tenants without legal action just with a note on the door or a call for the last month’s rent to be paid.  In some states the law encourages court evictions because predatory landlords can lard up fees and fines by using the court as their collector.  Federal Reserve studies have indicated that eviction rates in corporate properties put Atlanta in the lead with an eviction rate over 22% and Detroit, Memphis, and similar cities relative pikers in corporate evictions at over 8%.

So, the data is now under-girding what organizers find daily on the doors.  That’s good news.  Whether or not anyone, high or low, is willing to try and do something about supporting lower income families in affordable rental housing either under law or public policy is a longshot though.

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Land Contract Companies Settle Lawsuits in Cincinnati Without Celebrations

New Orleans     In the more than a year that the ACORN Home Savers Campaign has built committees of owner-occupants in cities in Michigan, Ohio, Pennsylvania, Arkansas, Georgia, and Tennessee to try to force companies to convert land contracts to ownership for the occupants, to renegotiate the terms, and bring homes up to standards, others have argued that the best tactic in dealing with land contracts was through the courts.  Lead lawsuits filed in Cincinnati a year ago have now been settled and provide a template for understanding what relief is possible and what is not, so let’s see what an examination of the settlements provides for the future organizing.

The City of Cincinnati sued both Harbour Portfolio, based in Dallas, and Vision Property Management, based in Columbia, South Carolina.  The suits were based on the condition of certain properties owned by the prospective companies.  The settlements in both cases resolved various fines and assessments involving these properties.  Harbour will have to pay $125,000 to settle and Vision will be required to pay about $88,000.

Going forward the companies are required to record all properties in the future.  They are also barred from entering into any future land contracts until the city has inspected the property to determine that meet minimum code standards.  There was an attachment with a list of properties that Harbour needs to resolve.  In the Vision settlement there were four properties at issue, two of which the City agreed had already been brought up to code and were deemed approved and two that were in process.

Pretty much that’s the bottom line on the settlements.  Pay up, fix ‘em up, and go on about your business.

The one area in which the settlements are completely silent is on the issue of the land contracts themselves and their provisions.   Harbour has been a classic contract-for-deed company in most of its transactions.  After investigations and subpoenas from the Consumer Financial Protection Bureau about their business practices since contracts-for-deed are under Dodd-Frank, the company seems to largely be exiting the market, even though the CFPB has been rendered toothless at this point.  Vision is a lease-purchase-option company where owner-occupants sign an agreement with a term of seven years normally and at the end of that term have credits set aside and the option to then buy the property and refinance.

In the settlement the City and Harbour agreed that a separate disclosure would be given to Harbour occupants explaining that they were in a land contract.  In the Vision settlement the company agreed, regardless of the nature of their contracts, to comply with any Cincinnati regulations that govern the conduct of landlords with tenants.

All of this is for the good, but leaves both companies whole and intact though chastened, and leaves the nature of their contracts affirmed as legal and appropriate business models under state law in Ohio, either because land contracts are covered in the case of Harbour or the law is silent in the Vision situation using lease-purchase-options.  Efforts to amend the Ohio law in the legislature proposed by some seem to not be making much progress and lack Republican support in the bodies they control.  The Cincinnati settlement will be the benchmark by default and gives relief where there are nuisance properties, but leaves the structure of land contracts in various forms untouched, leaving the ACORN Home Savers Campaign with plenty of work to do in our efforts to push companies towards mortgage conversions and different contract and business models.

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