A Response to Claims about Evictions in Lexington

Posted by Stephen Marshall on

A RESPONSE TO THE LEXINGTON FAIR HOUSING COUNCIL’S REPORT ON EVICTIONS 

The Lexington Fair Housing Council (hereinafter “the FHC) has recently released a document titled Locked Out: Foreclosure, Eviction and Housing Instability in Lexington, 2005-2016 (hereinafter referred to as “the Report”). The Report was presumably created because the FHC believes that Lexington has a housing instability crisis that has either resulted from, or been perpetuated in large part from, too many evictions and foreclosures. Because of the tone and tenor of the Report, as well as the facts that it addresses issues affecting our association and names certain members of our association therein, we at the Greater Lexington Apartment Association believe a response is appropriate in order to provide a more complete view of the rental housing landscape in Lexington. 

THE EVICTION PROCESS 

As an initial matter, we believe the Report presents an inaccurate picture of actual housing instability resulting from “evictions”. The Report repeatedly uses the term “evictions”, and states that there were 43,725 residential “evictions” from 2005 through 2016[1]. In the Appendix, the Report clarifies that this number actually means “eviction filings where a court judgment was rendered in favor of the plaintiff”[2]. The Report then mistakenly equates the entry of a judgment in favor of the landlord with “a completed housing dispossession event()” that “result[ed] in the loss of housing”[3]. As will become clear later in this response, in most cases, the entry of a judgment of eviction against a tenant does not result in the loss of housing.  As a result, the numbers being used in the Report are not based on the number of tenants actually being forced to leave their rental units, but rather merely reflect the number of court cases being filed that led to judgments of eviction. 

To clarify, a person is not “evicted” simply because a landlord files an eviction case with the court. Instead, there is a significant process that must play out with every eviction that results in a tenant being forced to leave a rental unit. Since the overwhelming majority of evictions are based on non-payment of rent, that scenario is most appropriate for an example. First, the tenant must either breach the lease by failing to pay rent when it comes due. Rent is typically due on the first day of the month, and most leases have a grace period that allows the tenant until the fifth of the month to pay without penalty. Once the rent is past due and the grace period has expired, the landlord is required to give the tenant a notice that the tenancy will be terminated if rent is not paid within seven (7) days. If the rent is tendered in full within that seven-day period, the landlord must accept the payment and allow the tenant to remain in the rental unit. If rent is not paid within that seven-day period, the landlord is entitled to file an eviction on the eighth (8th) day.

As a starting point, very few landlords move as quickly as the law allows. Many landlords do not issue seven-day notices until later in the month if the rent remains unpaid, and many do not file evictions immediately after that notice expires, opting instead to work with their tenants to get the rent paid. In fact, Ball Realty, one of the landlords named in the Report, typically does not file an eviction against a tenant until the notice has expired and the tenant has failed to respond to an e-mail and a phone call regarding the failure to make payment. Other landlords have similar protocols, providing additional notices and reminders that an eviction will be filed if rent isn’t paid by a certain date, even after the initial seven-day notice has expired. 

The reason for this is obvious: landlords are running a business. They want the rent to be paid. Evicting tenants is costly for landlords, both in time and money, a fact that the Report does not acknowledge until Page 17.[4] Additionally, preparing a unit for a new tenant requires significant additional costs in repairs, cleaning, painting, etc. Moreover, since September 2011, the Fayette County courts have required all landlords to use an attorney to file their evictions unless the owner himself is filing the eviction for property held in his individual name. No longer were property managers able to file evictions on behalf of owners and no longer were members of LLCs and corporations able to file evictions for properties owned by the company. As a result, landlords are paying significant money out of pocket for every eviction.

Thus, when the Report cites landlords who file evictions as “the problem” and characterizes them as exploiting tenants, it is severely misguided.[5] Landlords use the eviction process as a last resort in order to cut their losses – it is simply not a money-maker.

Returning to the eviction process, when the seven-day notice has expired without payment, the landlord is entitled by law to file an eviction complaint[6] with the court. The landlord or his attorney[7] then files the complaint and is given a court date, typically from one week to one month away, depending on the time of the month that the case is filed. The landlord or attorney then hires a local constable to serve the tenant with a copy of the eviction complaint and notice of the court date. It should be noted that, in many cases, the landlord will still accept the tenant’s payment at this point or work out an agreement that allows the tenant to remain in the rental unit. As a result, numerous eviction filings get dismissed because an agreement was reached prior to court, sometimes even moments before the hearing. 

If an agreement is not reached, the landlord and the attorney must then appear in court and present testimony as to the terms of the lease, the breach, the notice given, and the tenant’s failure to cure the breach. Assuming this is navigated successfully, the landlord is then given a Forcible Detainer Judgment. The judgment requires the tenant to vacate and surrender the rental unit back to the landlord within seven (7) days after the judgment is entered. The assumption of the Report is that all or most of these tenants are forced to move, which is simply not the case. 

A significant number of landlords still allow tenants who have had a judgment entered against them to make payment during this last seven-day period and continue occupying their rental unit. What’s more, some of them even wait well beyond the expiration of the seven-day period, often waiting several weeks, before enforcing the judgment to see if the tenant can come up with the rental payment. 

However, if no agreement is reached, the landlord may then obtain a Writ of Possession from the court that entered the judgment and hire a local constable to bring the Writ to the property to oversee a transfer of possession from the tenant to the landlord. The constable keeps the peace while the landlord removes any remaining tenant belongings from the unit. As one can see, evictions that result in tenants being removed are a lengthy and expensive process for landlords, in terms of both time and money. As a result, it’s not surprising that many landlords are willing to allow the tenant to pay and stay at any point in the eviction process. 

JUDGMENTS VS. TENANT RELOCATIONS 

What should be evident from this process is that there is a large discrepancy between the number of eviction cases filed with the court, the number of judgments entered, and the number of people who are actually required to move. The Report bases its conclusions based solely on the number of filings that led to a judgment for the landlord, a number that is significantly larger than the number of tenants actually required to move. As a result, the actual impact on housing stability being presented by “evictions” in the Report is far beyond reality, as evidenced by the numbers below related to several of the Top 10 Landlords for Eviction Filings[8].

TABLE 1

Landlord

Evictions filed

Judgments obtained

Tenants required to move

Ball Realty[9]

119

n/a

33

Harpe/Mashni

34

16

4

Raintree Apartments

56

23

11

Jason Brown

28

14

3

Cowgill Properties

57

19

19

 

TABLE 2

Year

Constable

Eviction Complaints Served

Set-Outs Performed

2015

Jeff Jacobs

3,809

648

2016

Jeff Jacobs

3,791

467

2017

Jeff Jacobs

2,838

467

 

These figures provide a more accurate picture of both how the eviction process is used and its impact in Lexington. As these numbers show, each stage of the process has a winnowing effect on the number of tenants actually being impacted: 

Notices issued > Evictions filed > Judgments obtained > Tenants required to move

 While there are many seven-day notices issued each month by landlords to tenants who have failed to pay their rent, many of those tenants make payment within the seven-day period and continue to live in their rental unit. Of the many renters who receive a seven-day notice each month, only a fraction will have an eviction case filed against them. The Reports alleges that 67,601 residential evictions were filed from 2005-2016[10], and that judgments of eviction were entered in 43,725 of those cases.[11] Thus, there are approximately 3,600 eviction judgments per year, 300 per month. 

As the Table 1 above shows, of those 300 tenants each month who have an eviction judgment entered against them, many still are not required to leave their rental units. Of the 294 evictions filed by these landlords cited by the Report as frequent evictors, only 70 tenants were required to move, which is a mere 24 percent of those who had an eviction filed against them. If these numbers are extrapolated to the number of evictions set forth in the Report, it would stand to reason that less than 860 people each year, approximately 70 each month, are actually required to move from their rental units.[12] These numbers from Table 1 are supported by the numbers from Table 2, which reflect the number of eviction complaints served by local constables versus the number of times tenants are actually removed from their units. In those cases, tenants are removed only in between 12-18% of cases. Therefore, when the Report equates the entry of an eviction judgment with a tenant being displaced from the rental unit,[13] it is quite mistaken. 

What’s more, as noted above, of those 70 tenants who are required to move each month, the vast majority are required to move because they failed to pay their rent. In those cases, the landlord has very little choice given that by the time the eviction process has been completed, the tenant will be at least two months’ behind on the rent. Additionally, many of these tenants are “repeat offenders”, so to speak, in that the landlord has filed multiple evictions against them, only to allow them to pay late and stay in the unit. Indeed, the AOC records are replete with individuals who have had numerous evictions filed against them by the same landlord, often for several consecutive months. In such cases, which are quite common, the landlord files the eviction case and, as long as the tenant makes payment before being set out, even if a judgment has been entered, the tenant is allowed to stay in the unit. And so the process repeats again the next month. This phenomenon substantially inflates the number of evictions filed and judgments obtained, but creates no displaced tenants. 

See, for example, the case of Joseph Flynn. Mr. Flynn was “evicted” 29 times between 2008-2015 by the same landlord. Similarly, Penny Saffery was “evicted” 25 times between 2011-2016 by the same landlord. In these cases, the tenant was never required to move until the very last case (and even then was perhaps not required to move). Yet, these cases still show up as 54 evictions filed despite the fact that there was no tenant displacement or housing instability that resulted. Such cases are not uncommon.[14] 

The Report cites a claim by Matthew Desmond that “for every eviction executed through the judicial system, there are two others executed beyond the purview of the court, without any due process”.[15] This claim is not based on any study in Lexington, but rather on a survey conducted from 2009-2011 on tenants in Milwaukee. Further, that survey included in its definition of “eviction” situations where a landlord paid a tenant to move. Clearly, the tenant wasn’t being exploited in those situations. Instead, the tenant decided moving was a better deal than staying. That’s not an eviction, has no impact on housing stability, and should not even be considered, yet such situations were included within the reported results in order to bolster the chosen narrative.  

Finally, it should also be noted that, in the rare instance when tenants are forced to leave one rental unit, they rarely have trouble finding new rental housing. According to research conducted by the CoStar Group, Lexington had 30,937 rental units, with over 1,000 more under construction in 2016. The city had an overall vacancy rate of 8.5% during that time period. The vacancy rate of its lowest-priced rentals, which constitutes a full one-third of the total units, was 9.7%. Thus, there does not appear to be a rental housing shortage overall, and tenants have options at all levels.  

The fact that less the one-fourth of evictions filed result in tenants actually being required to move reflects the simple fact that landlords lose money when they lose tenants, especially when they use the eviction process, which requires them to advance out-of-pocket fees to attorneys, the court, and constables. As a result, they often go to great lengths to keep a non-paying tenant in the unit in hopes that the tenant can come up with the money to pay the rent.  If evictions were a money-making endeavor, we would see landlords issuing seven-day notices at the first opportunity, then racing to the courthouse to file their evictions, then enforcing their judgments as soon as legally possible every time. Instead, the reality is that landlords often wait as long as possible to issue the notice, to file the eviction, and to enforce the judgment, typically being willing to work with the tenant to get the rent paid throughout the process.

Thus, it is a bit disappointing for the Report to suggest that landlords “profit” from housing instability.[16] It’s even more disappointing that the Report names certain landlords as “exploiting” the eviction process for personal gain.[17] As I mentioned earlier, the vast majority of eviction filings are based on non-payment of rent by the tenant. While the exact numbers are not available, I believe a conservative estimate to be that over 90% are based on non-payment of rent.[18] In such cases, a landlord seeking to remove a tenant who has failed to pay the rent after the due date, grace period, and seven-day notice have passed is not “exploiting” the eviction process, regardless of whether he files one eviction or 1,000 evictions. He’s simply trying to cut his losses by removing a non-paying tenant in hopes of finding one that will pay.

POLICY ISSUES

 The final section of the Report lays out the following policy recommendations that would directly affect the rental industry: 

  1. Explore possibilities for reducing eviction, such as convening a special task force to address issues raised in the Report.
  2. Support creation of a citywide eviction intervention program to provide direct services to tenants at risk of eviction. The services contemplated by the Report include educating tenants, mediating disputes between landlords and tenants, providing a centralized point of assistance for tenants, and facilitating a smoother transition for evicted tenants.
  3. Legislate a right to counsel for tenants in eviction proceedings, a measure that would be costly, revenue-negative, would create unnecessary delay in the eviction process, and would encourage tenants to use the eviction process as a sword instead of a shield.
  4. Create legislation prohibiting landlords from rejecting applicants based on their source of income, a measure that would no impact on evictions or housing stability and would require significant additional administrative burdens for landlords.
  5. Increase funding for construction of affordable housing units. 

THE GLAA SUPPORTS TENANT EDUCATION AND ASSISTANC 

As the numbers set forth above show, we believe the Report calls for the devotion of significant resources to a problem that does not exist, at least as it pertains to evictions. Simply put, there is no significant level of housing instability related to evictions, as less than 850 people per year are moving from their rental units, and many of those have no problem finding new rental housing. As a result, we do not believe that a special task force is warranted.

That being said, the GLAA is supportive of the creation or designation of any agency that might provide educational and financial support to tenants. To that end, an agency that could serve as a coordination center for marshalling and distributing the resources provided by other tenant-support groups would likely be beneficial to both landlords and tenants. However, it is our understanding that this is exactly the purpose of the LFUCG Adult and Tenant Services program. Regardless of the particular instantiation of the program, the GLAA is supportive of efforts to educate tenants and to assist them in paying their rent. 

THE GLAA SUPPORTS INCREASED FUNDING FOR AFFORDABLE HOUSING 

While it stands to reason that Lexington would have a smaller Affordable Housing Trust Fund than Louisville, the GLAA supports ensuring there is an adequate supply of quality and affordable housing for lower-income tenants and, therefore, recognizes increased public funding for development and construction of such housing as a potential solution. This measure is a strong alternative to mandating that all landlords accept Section 8 vouchers and the increased burdens that come with participation in that program, which would be the effect of making “source of income” a protected class. However, the Report does not provide, and the GLAA does not possess, any data regarding the actual supply, demand, and vacancy rate for lower-income housing. Should such data indicate a lack of quality affordable housing in Lexington, the GLAA would support increased funding for development and construction of such units. 

THE GLAA STRONGLY OPPOSES A RIGHT TO APPOINTED COUNSEL FOR TENANTS

The GLAA strongly opposes any attempt to legislate a right for tenants to have an attorney appointed for them in eviction proceedings. Tenants already have a right to counsel in the sense that they have the right to hire an attorney to represent. However, they do not have, and should not be given, the right to have an attorney appointed for them. Landlords do not have such a right to counsel. However, as noted above, landlords are required to hire an attorney if they own their properties in a corporate entity or if they are managing the property on behalf of another owner. Thus, as things currently stand, neither landlords nor tenants have a right to counsel, but only landlords are required to hire counsel in certain situations. Thus, both stand equally before the law: neither has the right to counsel, but both have the legal opportunity to hire an attorney if they choose. To create a right to counsel would slant the playing field in favor of the tenant as a matter of law. In reality, the playing field is already a bit slanted in favor of the tenant in that certain tenants can obtain legal representation free of charge via Legal Aid of the Bluegrass, the University of Kentucky Legal Clinic, and the Fayette County Bar Association Pro Bono Program. These alternatives are not available to landlords.

The Report argues that this legal favoring is justified for several reasons. First, it argues that a right to counsel is justified because very few tenants have legal representation, while landlords often have an attorney to represent them. The assumption behind this argument is that tenants should have an attorney just as often as landlords. Simply put, creating equal outcomes is not the job of the government. The job of the legislature is to create equal opportunities under the law. Currently, both landlords and tenants are equal under the law in that neither has a right to counsel. If a landlord has an attorney, it is because the landlord has spent his money to hire that attorney, not because one was appointed for him. In fact, the only reason that most landlords hire an attorney to file their evictions is because, in many cases, they are legally required to do so based on judicial rulings in the state.[19] When not legally required to use an attorney, many individual landlords continue to exercise their right to file evictions without an attorney. As a result, creating a right to counsel would not create equality of outcomes for both side, as tenants would have attorneys in every case, but landlords only if they chose to hire one.

The Report further attempts to justify the right to counsel on the fact that landlords win most eviction proceedings.[20] It should be noted that, due to the fact that eviction cases are filed by landlord, the tenant “wins” when the case is dismissed. Unless the tenant files his own claim against the landlord, which is so rare as to be almost non-existent in eviction cases, there is no way a court could grant a “judgment” in favor of the tenant. Instead, because the only claim has been filed by the landlord, if the tenant “wins”, the case is merely dismissed, rather than having a judgment entered for the tenant. As a result, the statistic that only 1% of eviction cases result in a judgment in favor of the tenant is irrelevant at best and misleading at worst. It’s similar to stating that the prosecution is never convicted in criminal cases; it simply misunderstands the nature of the process.

Nevertheless, the Report focuses on the fact that landlords win 65% of all eviction cases. This is perfectly intuitive, given that landlords are the ones who choose to file these cases, and one would not expect a party to file a case that he has a significant risk of losing. What’s more, as noted above, landlords file evictions to cut their losses or as a last resort to provoke payment by the tenant. Thus, landlords are simply not likely to file cases in which they might lose, and we should therefore expect landlords to win well over half of the cases that they file. Landlords who file evictions are already losing money; it’s not likely that they would risk losing more money by filing an eviction without a very strong case.

This notion is further supported by the fact that the overwhelming majority of eviction cases are due to non-payment of rent. These are typically very routine cases. If the tenant failed to pay rent, the landlord gave proper notice to pay or vacate, and the tenant failed to pay or vacate, a judgment of eviction is entered in favor of the landlord. Given such a straightforward endeavor, again, one would expect landlords to prevail in most cases. 

Thus, the fact that landlords prevail in most eviction cases has little to do with tenants not having legal representation, and is instead the product of proceedings that are typically simple and straightforward, and in which landlords do not file cases that they are likely to lose.

In fact, landlords likely actually “win” much more than 65% of the time in eviction cases. In those 35% of cases that are dismissed, which is technically a “win” for the tenant, the dismissals are typically the result of an agreement between the landlord and tenant in which the tenant agrees to make payment to the landlord, thus resolving the case and resulting in the landlord asking the court to dismiss the eviction.

Beyond these policy reasons, there are practical reasons to oppose legislating a right to counsel for tenants. The obvious reason is that of cost. Landlords do not have a right to counsel and therefore must hire and pay an attorney if they choose to use one. If tenants have a right to counsel, an attorney would be appointed for any tenant that requests an attorney. The costs of the services provided by these attorneys would be paid for by the citizens of Lexington via additional tax dollars. As such, the proposal is revenue negative for the city. In addition, given that the vast majority of eviction cases are due to the tenant’s failure to pay rent, it would be poor form for the city to require citizens to pay legal bills for individuals who have failed to pay their own debts.

The other practical reason to oppose such an initiative is that it would almost certainly create further delay in the eviction process. As the Report correctly notes, state law ensures that evictions are summary proceedings,[21] which means that they are less formal proceedings designed to promote a quick resolution. This is appropriate because, in the rental industry, profitability is based on a landlord maintaining paying tenants in his rental units. Should a non-paying tenant be allowed to linger without removal, the business model becomes unsustainable, which causes the community to lose rental housing options for its residents. Despite its nature as a summary proceeding, both the law and judicial process creates significant delay in the eviction process, as established earlier in this response. 

Even in the most routine non-payment of rent eviction, it can take landlords 45-60 days to regain possession of their rental units, which entails a loss of at least two months’ rent. Savvy tenants use the legal process as a sword to live rent-free for two months before being required to leave the unit. Installing a right to counsel would delay this process, which is supposed to be summary in nature, for two reasons: First, eviction hearings could not go forward until the tenant has an attorney appointed for them and has had an opportunity to discuss the case with the attorney. This fact alone will cause many eviction hearings to be continued until a later court date, which would be another week away at the absolute earliest. Additionally, the appointed attorneys can create additional delay by requesting continuances on behalf of their clients because of insufficient time to prepare. Given the necessity of obtaining and maintaining paying tenants in their units, these delays have the ability to wreak substantial havoc on the rental industry in the city.

These additional delays would increase the cost of doing business for landlords, which costs would likely be passed on to tenants in the form of higher rental rates.  As a result, providing tenants a right to counsel could result in higher rental rates for low-income housing in general, thereby reducing affordable supply and making it more challenging for tenants to afford their monthly rent payments.  

Therefore, for reasons that are both theoretical and practical, the GLAA strongly opposes any legislation that would create a right for tenant to have counsel appointed for them in eviction proceedings.

THE GLAA OPPOSES LEGISLATION MAKING “SOURCE OF INCOME” A PROTECTED CLASS FOR FAIR HOUSING PURPOSES

  1. This proposal would not reduce evictions or housing instability.

The Report acknowledges that any impact on housing instability by creating this new protected class would be indirect. The theory is as follows: 

Premise One: Prohibiting landlords’ ability to reject tenants based on their source of income will create a larger pool of rental housing options for tenants.  

Premise Two: If tenants have more housing options, fewer tenants will be in need of rental housing. 

Premise Three: If fewer tenants are in need of rental housing, there are fewer tenants to replace those who get evicted.

Premise Four: If there are fewer tenants to replace those who get evicted, landlords are less likely to evict their tenants. 

Conclusion: Prohibiting landlords’ ability to reject tenants based on their source of income will reduce evictions. 

While it’s intuitive that Premise One is accurate, that making source of income a protected class would increase housing options, there is reason to believe this is not the case overall. Creating this new protected class would likely result in tenants with Section 8 vouchers moving to rental units that have higher rents, thereby reducing the income for landlords with lower-rent properties. Those landlords would be forced to raise their rents to offset their reduced occupancy rates or go out of business, both of which would effectively decrease the overall housing options for tenants. So, it appears that source of income legislation would only increase housing options for Section 8 voucher holders, not for the overall tenant pool. What’s more, because landlords who own units with lower rents would either raise their rents, reduce maintenance costs (which would decrease housing quality), or go out of business altogether, lower-income tenants who do not qualify for Section 8 vouchers would be hit hardest of all, as their housing options would effectively decrease.

Because Premise One is suspect, Premise Two is suspect as well. However, Premise Two is faulty on other grounds. It should be remembered that well over 90% of evictions are the result of tenants failing to pay their rent. Even if the proposal results in additional housing options for lower-income tenants, it does not help them pay their rent. Because it does not increase their ability to pay, it does not reduce the likelihood that they will be evicted, which is evidenced by the fact the Lexington-Fayette Urban County Housing Authority ranks fourth on the Report’s list of top evictors. Because the measure will not reduce evictions, it does not result in fewer tenants in need of rental housing. Instead, it simply results in tenants being evicted from a wider range of landlords. 

Premises Three and Four show the “indirect” impact of making source of income a protected class: landlords are less likely to evict because, if the other premises are true, they would be less likely to find a replacement tenant. As a result, they’d just stick with the current tenant in hopes of getting things worked out. As noted above, this measure would not result in more paying tenants; instead, it shifts the burden of a non-paying tenant to the landlord by reducing the likelihood of finding a replacement tenant. So, the theory offered by the Report in support of making source of income a protected class is merely a burden-shifting measure that results in landlords bearing more of the consequence for a non-paying tenant than they do currently. That’s the epitome of a bad deal for landlords that has little positive impact for tenants or our community.

  1. The proposal would place significant administrative burdens on landlords.

If landlords are not allowed to choose which sources of income they are willing to accept, they would be required to participate in the Section 8 voucher program. This is a program established by the federal government as a voluntary program; landlords are free to participate or not. By requiring landlords to accept all forms of income from prospective tenants, the city would effectively change the voluntary nature of this program and make it mandatory for landlords to participate.

For each tenant using Section 8 vouchers who wishes to rent a unit, landlords are required to complete a Request for Tenancy Approval (RTA) form and send a copy of their lease to the Lexington-Fayette Urban County Housing Authority (“the Housing Authority”). The landlord must also complete a second form that describes the unit and its condition, and list all the amenities of the unit. Once the RTA is received by the Housing Authority, an inspector must schedule and complete an inspection of the rental unit, along with an eight-page Inspection Report, to ensure that it meets the quality standards established by the Housing Authority (“the initial inspection”). No lease may be signed until the unit is inspected and the inspector completes a form that verifies that the unit meets the quality standards. If the unit does not meet quality standards, the Housing Authority notifies the landlord in writing, and the landlord must make the necessary repairs. Once those repairs are completed, the landlord must notify the Housing Authority in writing and request another inspection. 

In addition, the Housing Authority must determine whether the rental amount charged by the landlord is “reasonable” under the guidelines established by HUD. Thus, the Housing Authority seems to get veto power over both the landlord’s lease terms and the amount of rent that is charged. 

Should the landlord’s lease, rental amount, and unit all be acceptable to the Housing Authority, the Housing Authority then completes its internal paperwork, and notifies the landlord that he is allowed to enter into a lease agreement with the tenant. The landlord must also sign a Housing Assistance Program (HAP) Contract with the Housing Authority. 

At any point during the tenant, the Housing Authority may conduct “complaint inspections” if the tenant (or anyone else) complains that the unit does not meet the quality standards.  At least 90 days before the lease ends, the landlord must schedule another inspection by the Housing Authority (“the annual inspection”). If repairs are needed, they must be made by the landlord or the HAP terminates and, presumably, the lease cannot be renewed.

Needless to say, the extra paperwork, notices, and inspections required by this program create significant additional administrative burdens for landlords for each tenant.  

More importantly, the process required by participation in the program creates room for significant delays for landlords in getting tenants into leases and making payments. Landlords can be stuck for weeks waiting for inspections and for notification of approved leases, inspections, and rental amounts before they may sign leases and receive payment from tenants or the Housing Authority. The administrative burdens and potential lost revenues due to delays are the main reasons that so many landlords do not voluntarily participate in the program. The program guarantees landlords payment every month, which is quite the incentive for landlords. However, even a certain level of guaranteed revenues is not enough to overcome the additional administrative burdens and revenues lost by delays encountered in the process. 

Thus, while this proposal would have little impact on housing instability, it would have tremendous costs for landlords in the form of increased exposure to liability, lost rents, and additional administrative responsibilities. The Section 8 program should continue to be voluntary, not government mandated, allowing both landlords and tenants to decide if the program is a good fit for their individual needs.

CONCLUSION

While the GLAA has enjoyed a long-standing relationship with the Lexington Fair Housing Council, we do not believe the Report accurately reflects housing stability in Lexington with regard to evictions. As noted above, by equating eviction judgments with displaced tenants, the Report makes a critical error that undermines its findings and the basis for its policy proposals. Further, by painting landlords as causes of the “problem” of housing instability that the Report fails to prove exists and as exploiters of innocent tenants, the Report is misguided. For landlords, evictions are a loss-cutting mechanism, not a profitable endeavor as indicated in the Report. Evictions are a downstream result of much larger issues, primarily related to lifestyle choices, employment, and money management; they are a not a cause. Thus, tampering with the eviction process will do little to address the root problems and could have significant unintended consequences for the rental industry and the housing market in the city.

 As a result, the GLAA opposes the findings of the Report and several of its policy proposals. Assuming such a program does not require increased financial expenditures by landlords, we would support a centralized office that provides education to tenants and offers mediation for landlord-tenant disputes. However, for the reasons set forth at length above, we strongly oppose the creation of a right to counsel for tenants and making “source of income” a protected class in Lexington. We look forward to working with the Council as needed to digest these issues and proposals. 

[1] See Report, page 4.

[2] See Report, page 19.

[3] Id.

[4] The Report admits that “evictions can also be costly and time-consuming for landlords”. Even this statement doesn’t go far enough, as evictions are always costly and time-consuming for landlords; that’s why landlords are hesitant to use the process unless they are convinced that it’s the best way to obtain payment from the tenant, and they’re willing to allow tenants to stay in most cases where the tenant can come up with payment, even after a judgment of eviction has been obtained.

[5] See Report, Page 15 – “the biggest part of the problem comes from a relatively small number of landlords . . .” See also Report, Page 12, “some individuals and companies have been particularly focused on exploiting these methods for personal gain, . . . evicting hundreds, or even thousands, of tenants.”

[6] The courts refer to eviction filings as “Forcible Detainers”.

[7] As will be noted later in this response, the landlord must hire and pay an attorney out of his own pocket.

[8] See Report, page 15.

[9] Ball Realty’s numbers are from August 2016 through July 2017. The numbers for the other landlords are through August 31, 2017.

[10] See Report, page 19.

[11] See Report, pages 4 and 19.

[12] Using the Report’s figure of roughly 3,600 eviction judgments each year, if only 24% are required to move, the result is less than 865 tenants displaced.

[13] See Report, page 19.

[14] See also, Williams Elks (33 evictions, 17 by the same landlord), Alonda Duke (16 evictions by the same landlord), Chandra Boyd (14 evictions by same landlord), David Bales (11 evictions by same landlord), Chynna Brown (10 evictions by the same landlord), Marquita Tooson (10 evictions by same landlord), Hanna Rivera (9 evictions by same landlord), Camille Jefferson (9 evictions by the same landlord), Jonathan Hood (9 evictions by the same landlord), Joseph Johnson (9 evictions by the same landlord), Amner Perez (8 evictions by same landlord), Tiffany Cowan (7 evictions by the same landlord).

[15] See Report, Page 5-6.

[16] See Report, page 12.

[17] Id.

[18] This is certainly true in my personal law practice. Having filed tens of thousands of evictions during the time period referenced in the Report, it’s safe to say that at least nine out of every 10 cases are based on the tenant’s failure to pay rent.

[19] See Bobbett v. Russellville Mobile Home Park, 2007-CA-000684 (Ky. App. 2008).

[20] See Report, Page 18.

[21] See Report, Page 17.


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