Desperation and Eviction
Kail Decker, assistant city attorney, city of Milwaukee
Raphael Ramos, director, Legal Action Wisconsin’s Eviction Defense Project
Kail Decker has proposed a solution he believes hasn’t been tried before. He calls it rent correlation, a law tying the maximum monthly rent a landlord can charge for a property to its value – in Milwaukee’s case, 2.5 percent. On the eviction side of the issue, Legal Action Wisconsin created the Eviction Defense Project in 2017, and since, Raphael Ramos’ organization has provided legal aid to more than 1,000 people facing the loss of their home. But the need is enormous and continues to grow; Milwaukee County courts processed more than 14,000 evictions in 2017, eclipsing the record set the previous year. – Moderated by Chris Drosner
KD: It’s important to identify what the problem really is. Milwaukee has a housing problem, no doubt, overall. [But] there are areas of the city that are completely unimpacted by eviction. In fact, the vast majority of the city is entirely unimpacted. The 2800 block of East Newberry Boulevard has very different issues than the 2900 block of West Wells Street. Everyone should be concerned about it, but we are really talking about a pretty isolated geographic area, and it all surrounds poverty.
RR: Yeah. I think that’s not an accident, right? The fact that evictions are low in one area but they’re so much higher in another, is because they’re self-reinforcing. You’re looking at more affluent areas that will refuse to rent to people who have evictions on the record, who have less income coming in.
KD: They can be selective.
KD: Everyone wants to live in that area. That’s why it’s a nice area, and they can pick tenants. Why would you pick someone who has an eviction when you have three other people who don’t? That person with the eviction is just left somewhere else.
RR: The [Milwaukee County] Board of Supervisors recently added a prohibition on discrimination based on source of income. That was a step in the right direction in terms of being helpful to people like our clients. It allows people to hopefully expand the housing opportunities that are available to them because now they can actually rent from people who in the past may otherwise have said, “Well, you’re receiving this sort of benefit. I don’t want to deal with that. For that reason alone, I’m going to discriminate against you.”
KD: Which I’ve seen ads with those exact things in the rental systems. No vouchers, no nothing. [Landlords] have rejected it. That’s always a misconception, too, for the public. Why would you turn down rent assistance? Why would you turn down a guaranteed check from someone? The answer is because there’s often inspection standards that come along with that.
RR: Do you get a lot of tenants who come to you and talk to you about those sorts of practices, and ask what is legal, what’s not legal? I’d imagine from the enforcement perspective, your view is different from ours, right?
KD: Yeah, it’s probably a little different, but I do get a lot of calls from tenants, especially when I have the case against [Milwaukee landlord Elijah] Rashaed. I probably talked to about 30 of his tenants, who called me to report things he was saying, things that he was doing, and just some had questions in what was happening with the case, and who they should pay rent to. As is pretty clear from the record in that case, he has been quite involved after the order or after the case started, in causing confusion among tenants. He’s quieted down now, but there were a lot of tenants who were very confused by the process of what they should be doing.
In my conversations with them, I took the opportunity to ask them a lot of questions about that. How did you find this property? Did you respond to an ad or some word of mouth? What sort of fees do you have to pay to move in? I got a lot of good information and it was remarkably consistent on all tenants who didn’t know each other.
RR: What did the tenants say in response?
KD: One of the things was, he used to charge a $300 fee, just to look at buildings. Then he’d claim that it would be rolled into a security deposit. Then of course there was no record of it so it never did. In one instance, one of the tenants told me she had to pay a $300 fee to get a list of addresses just to go drive around and look at it from the outside. If she wanted to get into one of the buildings, she had to put 50 percent of the rent down. She’s desperate because she needs a place that day because that’s another part of the specter is –
RR: Time again.
The reason that East Side building doesn’t have the same issues is because the people considering living there have a current place to live. They’re not in danger of being homeless that day, so they can afford to walk away. For some folks, it’s either this or “I have to go to a homeless shelter tonight.” They’re desperate for a place, so they’ll accept subpar standards in their housing. They’ll pay whatever amount it is, even if it’s overpriced. It all has to do with the bargaining position.
In that case, she went in the unit, she paid 50 percent, $900 total, $300 and $600, went in the building, found it was full of bedbugs, and the prior tenant’s things were still there, all messy and thrown away. Someone just up and left. She said, “I’m not going to live here. Give me my money back,” and the person doing the showing said, “Don’t worry, we’ll show you a new place tomorrow. Just hang tight.” That got them to separate their ways and she called and never got a response back ever again, so she lost $900.
RR: We definitely see that’s the claim all the time with our clients. The urgency that you talk about, I think is something that a lot of people from the outside looking in really don’t understand, because we have people who come to us and say, “Hey, I’ve been evicted.” It’s not just a matter of finding housing, even temporary shelter, if you call 211 and you find shelter, that’s not necessarily a solution. We’ve had a young woman call us and say, “Hey, I can get a new shelter, but they’re going to separate me from my teenage son because they won’t take him.” What are people supposed to do in that situation other than say, “OK, I’ll agree to this exorbitant rent. I’m going to lay out all of my cash, I’m going to be in that position where I absolutely can’t make rent in the future, but I need this option now”? You see people taking advantage of that, [like with] double security deposits.
The one thing that’s great obviously is the elimination of someone like Rashaed. Have you seen others stepping in to fill the void created by him? My hope is that between the spotlight that Evicted put on Milwaukee, put on an enforcement, not just the city attorney but DNS [the Department of Neighborhood Services], and then the creation of projects like the Eviction Defense Project, the mayor’s task force on eviction, that there be less of a rush to fill that gap. I don’t know if you’ve seen anyone trying.
KD: No. It takes a certain personality to run that business, and it’s a more rare personality. You have to be willing to treat humans like commodities. If you’re not willing to do that, you’re not going to get into this business.
Properties that are involved in the cases the city has are actually under receivership. They’re all operated, and a lot of the same tenants who were there at the beginning are still there, they just now have a responsive person to contact. When they pay their rent, it’s not exorbitant, there’s no extra fees, or any things like that. It’s just the money that goes back into the properties to fix them up and pay for other costs involved with the receivership.
There hasn’t really been much displacement of the tenants. It’s a matter of finding the next person to take over these particular properties, which some of them have been sold off, but a lot of them still remain in the receivership right now, with hopefully buyers on the horizon. Certain groups have come, requesting to purchase these properties. And in reviewing their credentials and their history, we’ve said, “No, we don’t want to take a risk on you. You haven’t shown that you can manage it appropriately because you’ve got a long list of DNS violations or forfeitures or you don’t pay your taxes or you don’t respond to tenant concerns.” We need someone in there who’s just going to do the bare minimum, that’s all we’re looking for. The minimum is there.
RR: One concern I have with the takeover of Rashaed’s properties, he had so many properties. So many of those tenants, the vast majority I’d imagine, are on month-to-month tenancies where you can give someone a 28-day notice and then they have to leave without any reason, if it was properly given. One practice that we see, with some frequency, is when a new landlord comes in, when they buy a new place, they’ll oftentimes clear the place out and essentially give 28-day notices to everyone there so they can restock new tenants who they think are a better fit.
So any time there’s a certain sweeping change in ownership, I’m always a little concerned that hey, what’s going to happen with the tenants who are there now, are they going to be forced out? Even with a valid notice, 28 days is not a lot of time. You’ve got to find a new home, you’ve got to arrange for education for your kids, housing, transportation, work. Knowing that that is on the horizon for a lot of people, it does give me some pause.
KD: Yeah, it’s an issue, but it’s exactly what the law allows. I don’t know what we do about that. Do you extend that time out, or you provide some additional protection? The law should be addressed, I just don’t have an answer for that one.
RR: It’s tough for our tenants. We see it a lot, with people not understanding the intricacies of law, understanding that on a month-to-month [lease], you could have done nothing wrong, you could have been a model tenant paying on time, but you can still be forced to leave within 28 days. A lot of people think no, I can stay. And that is what triggers the eviction action.
KD: “I didn’t do anything wrong. I paid my rent, you can’t do this to me.”
RR: Exactly, and that’s incredibly frustrating, when you see people in these circumstances. They’ve done everything right, and they don’t know that staying longer is going to lead to long-term problems for housing stability.
For a landlord, there are a lot of different reasons to do this. You could be looking to sell the property. Sometimes a property is more attractive [to sell] if it’s not encumbered by leases with recurring tenants. You may also just want to convert somebody over from a month-to-month lease, which by definition is less stable, long term, and try to convert people over to longer-term leases that they may not be able or willing to sign.
KD: It could just be a tactic to increase rent. It could be a tactic to remove people from the unit, so that you can make a large-scale remodel of the building without having to deal with any tenants. It could be because your business policies, you only have tenants that you have checked out yourself, and run background checks and passed your standards. Regardless of who was there, they’re leaving, and if they want to reapply they can. Yeah, on the outside it seems unusual. Why would you get rid of a good tenant who pays rent on time?
RR: One of the concerns I have with tenants in Milwaukee is that there seem to be so many people who don’t know what their rights are. There is very little in the way of education that’s easily accessible to tenants. I know DNS has started their tenant training program, but there’s not a lot out there.
KD: Yeah, and it always goes back to people’s suggestion there should be a life skills course taught in high school.
KD: Finances, basic civics, basic housing laws, I think it’d be good. I know a lot of high schools’ curriculum is already jam packed with stuff, but if there was a way to sneak that in there and at least give the kids a chance. Just a brief, this is what you can expect as a tenant, these are your rights, just know what the resources are and that’s it, I think that’d be an excellent start.
RR: Yeah. I think that makes sense too, especially when you consider the populations affected by it. A lot of people are from Milwaukee, a lot of people don’t go to college. I think for the more fortunate parts of the community, people like you and me , you go through high school, you go to college, you figure this out. But a lot of people don’t even finish high school and they go right out there, and they’re renting apartments and they don’t know what to do.
KD: When I went to college, I remember my sophomore year, I rented a room in a rooming house because it was the cheapest thing I could get. I was trying to pay my way through college, and I had literally just my bedroom was my only private space. There were three other people I didn’t know, with locks on their doors, down the hallway we shared a kitchen, I didn’t know any of their names. I was a fool for signing up for that. My parents would have looked at me like, “What are you doing? You are smarter than that.” I was ignorant. I moved in because I was like, I’ve got $325 a month for rent, this is the only place that’s in the budget, I’m going to take it.
RR: Yeah, it’s amazing what people don’t know, or when you’re trying to find a place in an urgent sort of setting. When I was looking to buy a house of my own, I was looking in Bay View and they were selling so fast it’s almost like you have to make an offer before you even see the place, and that’s for people fortunate enough to buy a house. But when you’re trying to find a place before homelessness, before imminent homelessness, you’re in a similar situation but much more dire straits. It’s, “OK, I’m going to rent this place, I don’t know anything about it, I’ll get there and I’ll find out.” And it’s terrible.
KD: I think that’s really the issue when it comes to the housing crisis and what defines it. We live in a capitalist system where a buyer and a seller are supposed to get together and negotiate a fair price for both. That’s what capitalism is supposed to do. In most markets it does it great. Either party can walk away, either party wants the thing that they’re trying to transact over, that’s a great system. Capitalism is probably the best system for that. In most housing situations, that is the case, because one person can walk away. That rent is too high, I’m not going to take this. However, rejectability is one of the primary characteristics of the working capitalist market. If you can’t reject the thing you’re looking to buy, the system is broken. That market is not working. In these situations, I think rent prices in the areas that are most impacted by evictions, are exorbitant because the market itself is broken, due to the lack of rejectability on the buyer’s side. That’s the economic way to describe it, if you want to boil it down on an academic level. But that’s really it: The people who are trying to rent in these areas oftentimes cannot afford to say no.
RR: Yeah. I think that’s exactly one of the problems. Again, it’s self-perpetuating, because you put people in a situation where they, from the outside, cannot afford this place. Then that’s not worth that much. Then they’re forced to go into eviction, which from the tenant perspective, has long-term ramifications, because once you’re evicted it narrows the housing stock that’s available to you.
KD: Even more.
RR: You go from a situation where you’re paying too much for a bad place, to paying even more for a worse place. It’s a downward spiral that’s impossible to get out of, especially with the way that the courts handle records of evictions. The eviction record that’s created when an action is filed, whether it’s warranted or not, it’s the modern-day scarlet letter. If you have that, you cannot find housing, at least not easily.
KD: Yeah, and a lot of … not a lot of, but select landlords have taken that as an opportunity. They know how powerful that is as well. I’ve heard situations where an eviction action would be filed against a tenant with absolutely no cause, and a landlord knowing there’s no cause, but because the person had a clean record before, they had opportunities to leave that tenant or that landlord. Where if a landlord files the eviction notice, the person shows up mad saying, “I didn’t do anything wrong,” all right, let’s stipulate to dismiss this case. The tenant goes, “Good, I’m stipulating to dismiss this case, I won, but the record stands and now they can’t leave that landlord because they have eviction fresh on their record.
RR: Yeah. It’s a chain. They’re essentially trying to tether the tenant to them because they can’t find a place to live, because they’ve been marked with this eviction by the current owner. That’s almost preemptive in a lot of ways because you see … we had a client who had the same landlord file six eviction actions against him within the span of a year. All of them were improper, all of them were baseless, but they’re all intended to just destroy someone’s record. If you’re a landlord looking for a tenant and you see six eviction actions, you’re never going to rent to that guy.
KD: Right. That person could be the most timely paying tenant out there, but you’re not going to believe that person based on their record. Meanwhile, the person who filed all those evictions has now locked in a very good paying tenant.
RR: I think reforms to limit that scarlet letter would have a beneficial impact for tenants. Before we launched our project, we took site visits to places like Seattle, to D.C., and the differences in law had such a dramatic impact on how tenants were treated and what their rights were. In Seattle, the way the lawsuits were treated is that the lawsuit was essentially paper, it was all written up. But until it reached a certain point – later than it is here – that record wasn’t officially entered into the system to become publicly available. In D.C., they have what’s referred to as the right to redemption, where basically any time between notification of a past-due [rent] or ultimately issue of the eviction order, the tenant could make good with their landlord, paying up all that was owed, and at that point the landlord could not evict them.
RR: That’s one of the things that was incredibly frustrating, was the recent changes to the statutory scheme for the landlord and tenant law that went into effect last April, changed it so that now you have this language saying that there is no waiver by conduct on the part of landlords. In the past, we would typically try to say, “Hey, this tenant has been paying in the middle of the month for the last three years because the landlord knows that they get their [Social Security], they get whatever payment, in the middle of the month.” The landlord knows that, they’ve accepted it. The written lease says the 1st but over time they’ve done this, and there was a clear intent on the part of the legislator to try to eliminate that sort of argument as a defense to eviction, and that’s incredibly frustrating. It’s terribly harmful to tenants who’ve, again, really been doing nothing wrong. They’ve been working within the confines of an agreement with their landlord. It just didn’t happen to be the one that they wrote down at the time they had to.
KD: The law that was recently passed, as it was under consideration, I was lobbying one of the state legislators about it. We had a group of municipalities who met with a representative to go over it and I actually alerted them and their attorney for the landlord association, basically saying, this is going to be a tool used by that landlords to create a pretext for eviction.
What I mean by that is if rent is $1,000 and someone says, “Hey, I’ve only got $900 this month,” and they go, “That’s cool, don’t worry about it.” They accept the $900 and then things go on. Three months later your faucet breaks and all of a sudden now you need it fixed and you ask your landlord to fix it and they say no. You say, “I’m going to call inspection services if you don’t fix that. I need a working sink.” Meanwhile the landlord goes, “I’m going to evict you then.” “For what? I’ve been paying my rent.” That $100 you didn’t pay the last couple of months, it now adds up. You’re $400 short and they need it by today because it was due in the first of the month. Then they say, “But you said I was good on that.” “No I didn’t.” There’s nothing on paper. There’s no record of it. They will specifically build up a very moderate-sized delinquency in their rent in order to then use on a later day, in order to hold it over a tenant’s head so they don’t report violations. I’ve seen landlords do that.
RR: I think one of the things that’s totally understandable but exacerbates these issues is that tenants will oftentimes see that sort of behavior and then out of principle say, “I’m not going to pay that. That’s not what we agreed to.” Then again, because they have no writing, they have nothing supporting them, they’re in a very difficult position.
KD: As I think we’ve identified, there’s high rent in certain areas of the city for relatively low-quality housing and the question is why. My theory is that you can’t say no to the property. You’ll pay whatever you need to pay to move in. Everyone needs a place to sleep at night.
So what I’ve come up with is a different way to address it. A lot of pro-tenant advocate groups say, more access to vouchers or rent assistance, or we need to raise more money for our tenants in times of need, cover that last couple hundred dollars. And then as I was asking people who are involved in the industry, is that the case? If rent is $800, can people come up with $500 but they can’t get their last $300, and everyone’s like, yes, that’s a common issue. I can’t pay my full rent; I can only pay part of it.
As I looked at it more, did a lot of independent research – just keeping track of assessed values, rents and addresses, and then when I mapped it out online, I found a weird trend that I guess isn’t that surprising, but it was weird how consistent it was. There’s really only a very small area of the city of Milwaukee in which you can charge more than 2.5 percent of the assessed value of a building for rent. It’s basically Capitol to I-94 and Washington Park to I-43. That’s it. Probably the most challenged neighborhoods in Milwaukee. You talk to the police, you talk to the people involved with education or health, every concentric circle you draw is going to fall in that area. Poverty is such a powerful negative impact on people’s lives, and it’s all self-reinforcing.
Addressing it on the voucher side of it and providing more cash will just allow rents to be even higher. Those vouchers will get swallowed right up as soon as they’re issued – so that’s just not the answer.
RR: Yeah, over time, once the market adjusts.
KD: It’s the answer in the short term but give it a few years and rents will just simply rise to swallow that voucher and we’ll be right back in the exact same situation because it’s not a negotiated price as far a competition. It is the price that is the most that people can pay. If you give people a higher ability to pay, the price will simply just go up.
So a different way to address something that is essentially what’s called an oligopoly is to impose some sort of regulation on the price. Now, traditional rent control you see in New York or the large cities, I am pretty staunchly opposed to, because anytime restrict a price artificially like that and in a general sense, you’re going to swallow up competitive markets. You’re going to eventually discourage investment in that property because you’re not getting any return on that investment, so why would you fix that property?
What this rent correlation law is it simply sets the maximum amount of rent you can charge based on the assessed value of the building. If you set that rate so that it only covers noncompetitive markets, you won’t impact private landlords who are just charging a normal rent in a competitive market. There’s no paperwork to fill out. They don’t have to charge different rents. They don’t have to deal with any government bureaucracy. About 80 percent of the city right now would be in that situation if this law was created. Those landlords would notice nothing different in their lives.
RR: That’s definitely consistent with what we’ve seen with tenants who are impoverished, who live in more challenged parts of the cities. They come to court and one of the challenges is that they’re paying too much for their rental property.
What you propose, I think, would have a really beneficial impact to tenants, knowing that conditions [in the rental property] are often the root of nonpayment. This sort of system incentivizes repairs, which would improve the living conditions for the tenants. The other key thing is that it drives down rental prices to correlate them with the actual value of what the tenant’s paying for. They’re getting a property that has heat because they’re paying for heat. They’re not paying $1,500 a month so that they get an apartment that doesn’t have a functional furnace or that has leaky pipes.
One of the things that is most interesting to me about this sort of proposal, based on what we see at the Project and the clients we work with, is the sort of minimal onus it puts on not just landowners but also on the tenants. Because we see a lot of cases where tenants will say, well it was a miscommunication with HUD, with the housing authority, and my payment became late, my payment was reduced by an incorrect amount. There’s a lot of paperwork that people need to do to receive or stay on public benefits, and if they make any misstep there, that can lead to an eviction. But if they know, this is just my rent because my rent is what it is, based on this calculus, it would make it easier for tenants to make those payments because they wouldn’t need to worry as much about navigating a complicated legal system to get a voucher, to get their payment. Instead, they’re just paying what could be more reasonable. So I think it’s an attractive option. I’m not optimistic enough to say it would fix everything.
KD: I am.
RR: Poverty and economics I think is something that is sort of the specter that lives behind everything, but it would definitely be a significant step in the right direction.
KD: It’s so much easier to give an example. You can go on Craigslist anytime and just look geographically at an ad and run the numbers yourself. What is the rent? How many units does the building have? What’s the assessed value? That’s the only data you need to run this check and you’ll find that in only one area of town are you gonna get higher than 2.5 percent.
This one I found today is near the corner of 27th and Center. It’s a duplex. It’s got pretty extensive code violations. It’s got some pending violations right now. It’s not in that good of shape. It’s assessed at $23,300. That property right now is advertised on Craigslist for $650 a month per unit. That’s puts about $15,600 as a max revenue for that property. That property was purchased for $23,000 just this year, so the tax on it is $562 a year.
In one month, three quarters of one rent payment from one side pays the tax bill for the year. Plus this is a building that you only put $23,000 in to buy it, so your insurance is about $500 a year, based on my discussions with landlords who deal with lower-value properties. It’s not that expensive to insure the building for a year either. So your fixed costs are about $1,062.
RR: And that’s presuming that the landlord has insurance and pays his taxes. And the truth is, a lot of landlords in those circumstance are not incentivized to make any repairs or to improve the conditions of the property.
KD: Why would you?
RR: They’re already making a windfall.
KD: And it’s not like the condition of the building is a major factor for the tenants that you’re seeking out. It’s, is it a building? That’s the factor. It’s not, how nice are the windows, does it have maple floors? That’s not necessarily what people are looking at. It’s, is there a door? Can my family be here out of the weather. It’s a very different mindset for a lot of people. If you’re not in that situation, you don’t understand.
But even if you look at vacancy and repairs and eviction costs and things like that, I already estimated this property probably makes about 40 percent to 50 percent return on investment. And it’s like yeah, that’s what the capitalist market does and I don’t necessarily believe that people see that return and jump in the market because that’s what we’d expect from people who want to make a capitalist venture, look for your best rate of return. So it’s not like there’s a poor logic in the decision.
RR: There are ways to make exorbitant amounts of money from these properties, so you would think that someone could come in, make a modicum of repairs and still turn a profit. But that’s not what we’re seeing. Historically, the manner in which a lot of these properties are transferred in terms of ownership, often comes through sheriff sales, foreclosures, that sort of thing – where everyday buyers may not sort of be inspecting that sort of market in the regular sort of way. But there is an opening for a civically minded entrepreneur to come in and to make money, while doing it in a humane and sort of community-minded way. I don’t have an answer for why it’s not happening.
KD: I guess the more innocent answer is gonna be, managing scattered-site housing – a lot of these are one- and two-family rental buildings – is difficult. It’s time consuming. It can be expensive, so I’m guessing a lot of people who are in the rental business either A, don’t want to deal with having to buy six properties in order to make the profit they can make by buying one property in the suburbs, or B, they don’t see it as worth the potential hassle or stigma that’s attached to it or the stress that is attached to it. Because right now, the eviction rates are so much higher, in your mind you’re anticipating a lot of evictions and so it seems like a stressful way to own as opposed to owning a rental that has a consistent tenant for four years.
So the hard part is getting someone to take that first leap who’s gonna dare show up at this house on 27th and Center, buy it up for $23,000 and instead of charging $650, charge what would be 2.5 percent of the assessed value, which is about $290 a month, per side.
There’d be questions, are people gonna even make any money? And so with rents going down to $290 a month, assuming a slight reduction in evictions but would likely be a lot more, that person is still gonna make about a 15 percent rate of return. So I think it’s really important to note that this law is not meant to make zero profit or make you run at cost. It would just simply reduce it to what is already much higher than most landlords see. I was a landlord for almost 16 years. I just sold my rental property because I thought the market was good for it but while I was in that business, my return was about a 4 to 8 percent rate, and that was perfectly good.
You can check a single-family property on the far South Side of Milwaukee down by Grange or River. You can try Kilbourn Towers. You can try some place on the far northwest side of the city, anywhere in the city you want, you can test this theory and you’ll see that in the places I just described, it will not apply. The maximum amount will exceed what they’re currently charging, usually by a lot. The difference really is that those markets are functioning.
RR: The reason why I said it’s a wonderful idea – and I mean that, it truly is a great idea – but it may not solve all solutions is that ultimately, and I think this gets to why someone may not want to dive into this business, when you’re going into these parts of the city, there’s still a possibility that that person economically just may not have the resources to make that payment, even at that reduced amount. It’s simpler, it’s easier to find housing in more affluent neighborhoods if you can afford it, and purchase that. You may not make that sort of margin, but it’s easier.
KD: Who of in this room has a private water source where you contract privately as a private company to get water? No one. We use a water utility. Everyone does, because can you imagine if there was just a private company that was completely outside of regulation that provided water to the city to everybody? They could charge whatever rate they wanted to. Right now, we impose regulations on electricity, water, sewer – any public utility gets regulated because they’re deemed to be necessities, and it’s much more important to have that as a set and predictable price because there’s no rejectability there. No one’s gonna walk away from electricity because it’s too expensive.
Now housing, in my opinion, is the same thing. It’s a non-rejectable characteristic, and in a certain sub-market, where it’s not functioning, the clear answer would be to treat it more like a public utility.
RR: Housing, the business of becoming a landlord, becoming a property manager, is almost unregulated. I mean, you look at a restaurant owner. They’re subject to a lot of regulation. They have inspections to check the health and safety conditions, all sorts of things. Most homes don’t have those sorts of things unless somebody calls and complains. Landlords are able to operate without a license. You don’t need to go through any classes. You don’t need any certifications. You just need to be able to buy a house, and it’s odd that an industry that is so large is almost left to its own devices.
KD: We require the guys with ice cream carts to get permits to operate their ice cream carts.
RR: I can’t buy a sandwich from someone in a truck unless they have a permit saying that they can sell it there and that they can sell what they’re selling.
KD: Now I mean, for the record, my review of landlord licensing generally is not positive. There’s a lot of issues with it and plus, given the number of rentals in Milwaukee, upwards of probably 100,000 units or around that area, that would be the most massive licensing scheme this city has ever seen.
RR: But it’s an interesting juxtaposition of having something that is so all-encompassing but having it really left to do whatever it feels is in its best interests.
KD: Which is why I like the rental correlation idea better, because there’s no government bureaucracy. There’s no new expense. There’s no taxpayer expense.
RR: There’s no burden on the tenants.
KD: It would be a defense to an eviction. So if someone alleged you didn’t pay rent, all you’d have to do is show that you paid 2.5 percent of the assessed value, and if you can show that you paid that month, then the eviction would be dismissed.
RR: Yeah and I think for me, that’s one of the reasons that continued availability of legal services is important not just obviously because it’s my job, but also because when you’re talking about the need for having representation in court. Other places like New York have established right to representation in eviction settings because it is so critical to a person’s everyday life. If you are under threat of losing your home, you have right to an attorney.
We don’t have that here, and we’re very far from it. The closest thing we have is our project and there’s only so many people that we can serve. So I think being able to provide people with representation in these cases is critical. We’re talking about losing your home, which is essentially the most dramatic, catastrophic sort of upheaval someone could have in their life. You’re talking about people who are under incredible stress, and you’re asking them to go into court to articulate some sort of defense or to try to negotiate some sort of reasonable, realistic settlement with the landlord.
And what we see, what we know is that people will do whatever they need to do to get rid of the eviction that day. So they’ll sign a stipulation saying they’ll pay this amount now. It’s an outrageous amount, and then they get evicted a week later when they have no defense. To ask people to do that, to take on those tasks in those most dire of circumstances, it’s unreasonable. And with Kail’s proposal, it’s a wonderful idea but similar to the abatement arguments, [tenants have to] know what their rights are, what the defenses are.
RR: One thing I definitely wanted to talk about while we’re here was the conditions that are so rampant in the sort of lower income areas of the community. One of the nice things about Kail’s proposal is that it would, in theory, incentivize landlords to do work to increase the value of the property, increase their margin for profit.
But from the tenant’s perspective, the nice thing is that it incentivizes those repairs without them needing to prompt the landlord. We have a lot of tenants who come to us and who have rent abatement, when you’re reducing the rent you pay to address some sort of health or safety problem that’s not being fixed. A lot of tenants come to us when their landlords have filed an eviction action against them, even though they’ve done that correctly, they’ve reduced the amount they pay. There’s a risk of retaliation whenever tenants try to improve their living situation, not just because some landlords retaliate but also because a lot of tenants don’t know how to do it correctly. When you make missteps doing that, you can run afoul of the law and find yourself being subject to what is perhaps morally an objectionable eviction, but is legally within the confines of the law.
We have clients come to us who say the house is infested with rodents, there’s mold, the heat isn’t working and the plumbing’s leaking. It’s not unrare for someone to come to use with one of those issues. It’s definitely not unheard of for someone to come to us with all of those issues. So what’s the natural response to that? The tenant elects not to pay their rent. The problem is, the way that the laws are written, tenants are not allowed to abate rent in full. So if you have total nonpayment on rent for a month, you can be subject to an eviction action, even with all those conditions. You might have other defenses that can help you out, but on its own, complete abatement is a problem.
KD: I think you have to actually leave the building, don’t you?
RR: Yeah, you have to actually vacate. So as long as you’re inhabiting the property, you have to pay something. And from a common sense perspective, for our clients, they don’t know that. They don’t realize that, so they withhold it all and then they’re in trouble. Other times you’ll see somebody actually do it correctly. They’ll work with an organization like Community Advocates or go to DNS and do rent withholding where they pay the city and they hold it in escrow until the landlord makes repairs. Oftentimes, all the landlord knows is that they’re not getting their money and they’ll file an eviction action against the tenant even though the tenant’s done it correctly. Yes, that tenant may be prevail in court and get that eviction action dismissed, but unless they get the case sealed or their name redacted, it’s still on the record. It looks like somebody’s filed an eviction action against them that was potentially deserved, even though we know that that action should never have been filed.
KD: And maybe that’s an issue that the courts could address, I don’t know. But right now, when an eviction’s filed and the case is dismissed as a result of a stipulation with the tenant saying, “I’m gonna pay X number of dollars today and I’ll catch up over the next two months,” and they stipulate to dismiss the case, the eviction action originally was quite valid. Everything was done correctly but the landlord just decided I’m gonna accept a partial payment or some sort of arrangement and it’ll show up online as a stipulated dismissal.
KD: Now that is a pretty common thing and so when a landlord is looking at someone’s background and they see stipulated dismissal, their initial reaction is likely to think, that was probably a valid eviction in which the landlord just simply accepted alternate payment arrangements. However, in the situations where it could be completely wrongful, it still might show up as stipulated dismissal if the tenant says, “Hey I’ve been rent withholding for the last two months, you can’t do this to me,” and they go, OK, let’s stipulate to dismiss. Well, the entry online is just gonna say stipulated dismissal, even though that eviction was completely invalid.
RR: And the records don’t have enough detail for a landlord to actually make that assessment, so all you’re left with is conjecture. All you know is that an eviction was filed.
KD: So a subsequent landlord reviewing that particular tenant, looks at the record, has no way of knowing, was this a valid eviction that was stipulated or was it a completely invalid eviction? You can’t tell from the record online.
RR: Yeah, I mean, in theory, I could file an eviction action against Kail or you. You’re not my tenants. That record, it’s a public record. It’s a court record. It’s me suing you, for no reason at all. You can get that case dismissed easily, but unless you actually get it sealed or redacted, that record is still available online. And that’s a problem for tenants. It really is.
KD: The most recent law that was passed this last year says that the court is not allowed to remove dismissed eviction cases for two years. The public side, the Wisconsin Circuit Court Access side of CCAP must present dismissed eviction actions for at least two years by state law now.
RR: And the timing of that change in the law was notable because that change came near months after the WCCA CCAP Oversight Committee recommended – before, the records would be displayed for stipulated dismissal for 20 years. That committee said no, that’s too much of a burden on tenants. It should be reduced to two. And then the Legislature, after prompting from the landlord lobby, decided to change it to set a floor, to say that you can put it at two years but you can’t go any farther. And I’ve been at meetings where I’ve heard the lobbyists try to say that that change was a good one for the tenants. It’s not. It didn’t reduce the amount of time. It set a floor saying the time can’t go below that.
KD: Yeah, that might be the most interesting part of it, when I hear landlord advocates say things like, “This law helps the tenant.” What tenant have you talked to that you think this is gonna help them? What organization that supports tenants would ever support this law? You’re just saying that. That’s not true. But that’s the world we live in these days.
RR: There’s a fair question of access to public information, but in circumstances like this where the harm is so onerous, the tenants, and the long-term impacts it has on them, their lives and frankly, their worldview, that, in my mind, largely outweighs whatever the benefit is in giving people access to this record that 99 percent of the population doesn’t care about.
KD: And it might have even no value if it was a baseless eviction in the first place. It has no value at all.
RR: In 2016, the last year before our project came along, there were less than 1 percent of cases that were filed actually ended up with the seal or some form of redaction. That number probably holds true for unrepresented tenants now because the number of represented tenants in that year was also less than 1 percent. Unless the tenant knows to ask about it, and I do think the tenants are beginning to learn to think about asking for that more and more, but unless they know to ask and unless they take the legal steps to actually go through the process of having a hearing, have the judge decide this, it doesn’t happen.
KD: It really is one of those things that the advocate must present as an option because I don’t know any judges who seal on their own, do they?
RR: As you know, courts have to be neutral inherently, but I’ve heard of them asking if there’s anything else the tenant wants. So they may have an opportunity to ask but if they don’t know, and many of them don’t know what the next thing to do is, they won’t ask. In fact, a lot of people think that when the case is dismissed, it won’t show up online. A lot of clients call us and say, hey this case was supposed to be removed from my record and I have to explain to them, no it was dismissed, which is better than a judgment of eviction, but it’s still on there.
KD: And it’s still gonna impact your housing choices.
There’s a lot of really good landlords who are trying to do the right thing, but who would see a stipulated dismissal and very logically and reasonably say, why would I take a chance on someone who has that when I have another person who doesn’t have it? It’s a very logical and reasonable conclusion to make, so I don’t fault a landlord for doing that.
RR: It’s really more the system itself is set up in a way that one party ends up being the victim of it if there’s an eviction action filed wrongfully. In fact, I’ve seen cases go in front of the judge where a good landlord filed a totally justified eviction action against their tenant. They worked out a deal with the tenant and together, the landlord and tenant went to court to try to get that record sealed and because of the standard that’s being applied in terms of weighing the public interest and access to information and then the public interest and protecting people from the harms of these records – the court has to go through an analysis – the court said, well this case was rightfully filed and even though you guys agree now, you should’ve talked it through beforehand. This case is now going to have to be there with a dismissal, but the case itself will still be visible. And that’s one of my biggest problems with what we see in the small claims court is landlords filing actions without making any effort to sort of talk things through and mediate.
KD: It might be the first contact that a tenant has with a landlord is in eviction court. I’ve actually suggested that if Milwaukee wanted to address this, one way to do it would be to create a housing court because there were, correct me if I’m wrong, about 14,000 evictions filed [in 2017]?
RR: 14,077, according to our data.
KD: That was the most evictions filed in Milwaukee County ever, and it broke 2016’s record.
RR: Yeah, 13,457 in 2016. It keeps going up.
KD: This year we were on pace to break last year’s record, even though the economy has been booming for nine years now. How can evictions still be going up? It doesn’t seem logical but when you think about it, the economy is one thing, but the individuals who are subject to evictions are likely not feeling the benefits of the economy.
KD: I think the Journal Sentinel series [on bad landlords] was very enlightening for a lot of people. It’s a whole other world for a lot of people, and the media coverage of this I think has been very helpful to really put it in the forefront of people’s mind. They probably always assumed it [was as bad as it is] but didn’t really hear the stories from tenants who were suffering and didn’t read the very detailed explanations of what’s going on. I think that the coverage has been very helpful in making the general person who doesn’t live in this situation day in and day out understand what some of their neighbors are going through.
RR: Whenever I do community outreach, I like to ask the audience how many evictions they think were filed in the county over the course of last year. Pretty consistently, people underestimate by 10 times how many evictions have been filed. They thought it was 2,000, 3,000 [but] it’s 14,000. I think the issue is so separate from what people of more fortunate circumstances deal with. They don’t know how prevalent a problem it is, and I think a lot of people don’t grasp how big of a problem it is long-term, not just in terms of housing, but in terms of perception and worldview.
RR: I mean, out of those 14,000, almost half are defaults because people believe that there’s no point in going to court, or they’re not able because of resources. If people truly believed that they had a chance in court, if they thought that it made difference, I can’t imagine that that attendance rate would be as low as it is. We’re talking about default judgments in half of cases when people are losing their homes. You can’t imagine a sort of more extreme circumstance. But public perception in terms of the value of going to court, the fairness of the courts, is so low that people aren’t going, and I think Evicted and the Landlord Games series by Cary and the Journal Sentinel have put a spotlight on a lot of that.
So I think there have been steps in the right direction. I mean, the Eviction Defense Project was launched in January 2017. I’m sure the acquisition of the funding was helped by the publication of the book. The courthouse now has Mediate Milwaukee’s eviction prevention program in place, but there’s not enough. I mean, the tenants need more access to legal services. They need more access to mediation. They need more access to funds to actually pay rent, to make bridge payments until larger-scale systems can actually be put in place to help things in the long term.
Since 2017, [the Eviction Defense Project] has helped over 1,000 clients. We’ve slowly been ramping up operations. It’s a sizeable impact, but it’s still only a small portion of the number of people being evicted.
KD: I think that goes back to the housing court issue that I was kind of touching on. With 14,000 cases, there are also just shy of about 40,000 total small claims cases, and right now evictions are just another small claim. So small claims, by far, are the highest volume of type of case filed in Milwaukee County Circuit Court. If you remove evictions from that, small claims would still be the highest and evictions would be the second-highest – higher than any other criminal case or all other civil cases.
I think there’s a lot of logic in removing evictions from circuit court, because with small claims money judgments, if someone gets a money judgment against them, in the real world, nothing changes. It just means that as legal status, someone owes someone else money. But in an eviction case, there’s a real change in the real world. Some person has now lost their home. So I think it warrants having a separate type of court to deal with the reality of the much more significant impact of a judgment of eviction as opposed to any other small claim judgment.
If you do that, you can create things like either what the Seattle system is where papers are filed but not necessarily published until a certain point. Meaning, there’s someone reviewing it upfront, saying there’s a valid cause. You’ve provided enough information and evidence for the case to be brought into court, filtering out cases that don’t have a basis upfront. Or if the landlord hasn’t put together the correct sworn facts, saying, I’m gonna stand by this and if I’m wrong, well then I’ve just filed a false affidavit with the court. Something that puts the landlord with a little more skin in the game to make sure that when they file their case, there is a basis for it.
It also brings up an opportunity for a group like Mediate Milwaukee to step in and maybe take on a lot of those cases because, in speaking with them, a lot of landlords don’t realize the advantages mediation might have. They might only know, well my next step is eviction, they don’t know what else to do. This isn’t a charity. This is a business. If they knew mediation was available or if there was a housing court where that was pushed with more vigor, that landlord might see that mediation might work in this case. I’ll call Mediate Milwaukee. We each pay a small fee to them and at the end of the day, they keep a house and I actually still get my rent.
RR: A housing court that incorporated wrap-around services to try to prevent eviction on the forefront but then to also help people who are evicted on the back end would be tremendously beneficial for tenants and for our clients.
KD: And for the community.
RR: That’s the thing. The impacts of eviction are not just limited to the individual being evicted but to their family obviously, it impacts job prospects. Can they get to work? Education: Are the kids forced from their school? Health impacts. We do some work with Children’s [Hospital of Wisconsin], and they’ve told us that there’s a direct correlation between the number of emergency room visits a client has and housing stability. So the more unstable your housing situation is, the more often you’re drawing on health care needs. And shelters, too – obviously eviction is a precursor to homelessness.
KD: There are plenty of blueprints around the country to look at for guidance [for housing courts]. The hard is it would require a state law change. The statutes are very clear on how evictions happen. And given the laws that have been passed over the last eight years with a Republican Legislature and governor, I would say there’s very little chance of changing that.
[Editor’s note: This Conversation took place a few weeks before Democrat Tony Evers was elected governor.]
RR: The last few sets of changes to landlord/tenant have been almost uniformly bad for tenants and barring some change, it’s hard to see that changing in the future.
KD: The city would love to enact a lot of the things that we’ve talked about here, but they are prohibited oftentimes by state law and here’s the problem with political will is right now, if Milwaukee wants it, the state will not grant it.
It has to be something that has no opponents and a law like this, the people who would be the only group that would suffer as a result of this law is basically the group that put the current people in power in that position. There’s a lot of influence in the [Wisconsin] Apartment Association with the state Legislature currently. They’ve basically been able to pass laws in whatever form they want. So it just would not happen in today’s Legislature no matter what the political will would be. No matter how positive the coverage is in the Journal Sentinel or how people view it and say, “Hey, go after those bad landlords.”