Evictions Soar, Solutions Plummet

Greenville        New York City added a right to legal counsel for tenants facing eviction.  It made a difference with the city’s eviction rate falling from almost 29000 in 2013 to only a bit over 18000 in last year.  Nationally, it is likely that more than 2.5 million evictions are filed for tenants annually now, perhaps the numbers are even larger.  It didn’t solve anything, but it put a stopper in the problem.

Nothing new there, but here’s a real head scratcher.  Two sets of economists, as reported in The Economist, studied the impact of evictions on the poor, one in Chicago and the other in New York City.  Their conclusion:  the poor were poor before they were evicted, and darned if they aren’t still poor after they were evicted.  Their underwhelming conclusion on both cases was essentially that they were a bit poorer, but not all that much.  What are we to do with information?  Is there anyone anywhere in the world that thought that evictions were a poverty-reduction strategy?  This is when you have to wonder what economists do with their time and why?

The group that looked at New York said there was also no spike in payment of increased food stamps or welfare benefits.  Read the papers, fellas!  It’s almost impossible to get welfare now, no matter where you live, and food stamps are moving that way as well.  For welfare, you almost always need a physical address, so remember that when you were study evictions.  This group did note that use of hospitalization and homelessness increased dramatically and, being economists, couldn’t sidestep the fact that evictions were triggered by less than $2000 in back rent, but it cost the city $41,000 per homeless person annually.

This is all shuffling paper in a hurricane.  When I read that a huge trigger for the Hong Kong demonstrations is the lack of affordable housing and high rents, all I can say, is let’s hit the streets here, too.

One demand that would change all of this is not more lawyers – or more economists for godsakes, but making rental assistance like Section 8 an entitlement rather than an NBA lottery pick.  Only 25% of the eligible families actually receive a voucher, leaving 75% in the muck.

Why are the banks and housing industry not lining up with us to demand this?  The amount of new construction that would break ground overnight, if all qualified families received rent support, would jump the entire economy several notches.

There’s no comfort in discovering that the poor were only a bit more desperate by degree after an eviction.  Affordable and decent housing is in fact a poverty reduction winner.  Let’s go all Hong Kong over that!

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Inclusionary Zoning Short-Term Rental Nightmare in New Orleans

New Orleans     Let’s be clear:  inclusionary zoning is a good thing!  The problem is a bit like fake news though.  What is real inclusionary zoning versus something that just claims to be creating affordable housing, while doing very little past the claim?  This nightmare is unfolding in different versions repeatedly in New Orleans offering warnings and lessons for policy makers around the country.

One problem turns out to be the consultants.  If you hire consultants that have worked for AirBnb to front for the benefits of short-term rentals, you are going to have problems coming up with good regulations.  Or, if you hire consultants for inclusionary zoning that have done namby-pamby studies for other cities, don’t be surprised if you get a lame-ass ordinance which allows a city council to claim they have a policy, while enacting one that does virtually nothing.  All of this is happening in New Orleans

The inclusionary zoning proposal passed in recent months was Swiss cheese.  The number of loopholes was a developer’s dream of inclusionary zoning estimated to yield – are you sitting down – a whole 57 units of affordable housing from new developments per year.

Now the city and so-called consultants are debating how to manage short-rentals in commercial developments rather than residential homes, and it’s shaping up to be not simply contentious, but another policy disaster.  The city council’s initial proposal, according to the Times-Picayune New Orleans Advocate, “would have limited commercial short-term rentals to 25% of any property and would have required owners to provide one unit of affordable housing for every unit that is used as a short-rental.”  That’s not a bad place to start, since a commercial location’s short-term rentals are basically hotels with another name located in neighborhoods.

In the next block from our house a former hot dog factory has been converted into a condo-complex called the Saxony for specious reasons that insult some of the German worker families that once lived in the Bywater.  Currently, 67 of 75 available units are allowed for short-term rental!  Yes, 67 of 75, because the current regulation allows short-term rentals in commercial properties without restrictions.  That’s normally called a hotel with a couple of penthouse condos.  In this nightmare, we could say that any new regulation that limited them by any means would be something of a dawn.

The consultant is recommending that instead for the council’s proposal that they should collect higher fees on the short-term rentals in commercial properties, claiming that would create more affordable housing than the one-to-one ratio.  What refried baloney is that?!?  The city is in no position to develop affordable housing itself, so they would be paying or subsidizing a developer to do so, as opposed to requiring the developer to have to create affordable housing from the “get go” if they want to have short-term rentals.

A lesson that hopefully New Orleans – and other cities – will learn in this short-term rental versus affordable housing developer and consultant scam is simple:  fool me once, it’s on you, fool me twice, it’s on me.  New Orleans needs to not be fooled yet again by developers and their huckster allies.

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