I recently attended an event celebrating the achievements of Dean Kellye Testy, the outgoing Dean of the University of Washington School of Law. Everyone in the U.W. School of Law community wishes her well. She has been a terrific Dean.
Renters Now Rule Half of U.S. Cities
Detroit was once known as a city where a working-class family could afford to own a home. Now it’s a city of renters.
Just 49 percent of Motor City households were homeowners in 2015, down from 55 percent in 2009 and the lowest percentage in more than 50 years. Detroit isn’t alone, of course: The rate of U.S. home ownership fell steadily for a decade as the foreclosure crisis turned millions of owners into renters and tight housing markets made it hard for renters to buy homes. Demographic shifts—millennials (finally) moving out of their parents basements, for instance, or a rising Hispanic population—further fed the renter pool.
Fifty-two of the 100 largest U.S. cities were majority-renter in 2015, according to U.S. Census Bureau data compiled for Bloomberg by real estate brokerage Redfin. Twenty-one of those cities have shifted to renter-domination since 2009. These include such hot housing markets as Denver and San Diego and lukewarm locales, such as Detroit and Baltimore, better known for vacant homes than residential development.
While U.S. home ownership ticked up in the second half of 2016, there are reasons to think the trend toward renting will continue. A 2015 report from the Urban Institute predicted that rentership would keep rising through 2030, thanks to demographic trends that include aging baby boomers who downsize into rentals.
In the shorter term, housing market dynamics will also play a role. Fewer than 1 million homes were on the market in the first quarter of 2017, the lowest number since Trulia began recording inventory data in 2012. The shortage makes it harder for renters to buy. Meanwhile, rental landlords, including large Wall Street players and mom-and-pop investors, continue to plow cash into single-family homes.
Those shifts are likely to present new challenges for cities unequipped to handle high rental populations. Detroit Future City, a nonprofit that highlighted Detroit’s shift in a report earlier this month, argues that the city needs an intentional strategy for dealing with the rising population of such households.
That could include providing new protections for renters or creating resources to help landlords keep properties in good repair. On a grander scale, the Center for Budget Policy & Priorities, a Washington-based research institute, published a proposal this month calling for a new tax credit for low-wage workers, seniors, and people for disabilities.
Most low-income families don’t rent by choice, said Nela Richardson, chief economist at Redfin. And plenty of higher-income households rent because they can’t afford to buy. “We don’t have enough affordable supply in either rental or for-sale markets,” said Richardson, adding that cities interested in promoting renter-friendly policies can rethink their zoning policies to encourage more construction.
At an even more basic level, city leaders should check old assumptions about the role renter households play in their communities, said Andrew Jakabovics, vice president for policy development at Enterprise Community Partners, an affordable housing nonprofit.
Homeowners have traditionally been regarded as more engaged, with more at stake in the long-term prospects of their neighborhood, Jakabovics said. That view can unfairly shortchange renters.
“It goes a long way just to make sure you’re valuing renters and making sure voices are heard when it’s time to allocate resources to schools or parks or transit lines,” he said.
“Today’s vote is a significant step towards increasing fair access to rental housing,” said Councilmember Lisa Herbold. According to Seattle’s Renting Crisis Report from the Washington Community Action Network, “48% of individuals who pay for rent with Social Security Disability Insurance or Social Security retirement income said that discrimination prevents them from having successful rental applications.”
Councilmember Kshama Sawant said, “The movement of tenants in Seattle continues to win victories toward a full-fledged Tenants’ Bill of Rights. Thank you to Councilmember Herbold and tenant activists for this important protection against housing discrimination.”
Councilmember Mike O’Brien applauded the bill. “We are living through a housing affordability crisis. It’s essential to protect low-income renters from being displaced. Today’s legislation is directly based on what we heard from communities most impacted by discriminatory landlord practices.”
Sponsored by Councilmember Herbold, the Source of Income Discrimination legislation was unanimously voted out of the Civil Rights, Utilities, Economic Development and Arts Committee. Currently it is illegal to discriminate against a prospective renter whose primary source of income is a Section 8 voucher. This bill expands the legally protected classes to include alternate sources of income such as a pension, Social Security, unemployment, child support or any other governmental or non-profit subsidy.
The Committee discussed the bill on May 24 and June 14. In light of these discussions, the legislation was amended to add further protections:
- First-Come, First-Served Screening Practice
Prevents housing providers from giving applicants with alternative sources of income a lower priority. It requires landlords to review applications one at a time, on a first-come, first-served basis.
- New Eviction Protections
Ensures that tenants can fully utilize community resources to prevent eviction. Landlords will be required to accept pledges from community-based organizations to remedy nonpayment of rent if funds are received within 5 days of an eviction notice.
- Preferred Employer Programs Banned
Encourages landlords to offer non-discriminatory move-in incentives. In 2015, both media and community members reported discounts on deposits and other move-in fees for rental applicants working for preferred employers. The Seattle Office of Civil Rights recently concluded that some preferred employer programs that provide discounts or other terms and conditions in rental housing to certain groups over others may constitute discrimination under Seattle’s Open Housing Ordinance (SMC 14.08).