Evicted: Poverty and Profit in the American City

The preliminaries
“The worse the Hinkstons’ house got, the more everyone seemed to become withdrawn and lethargic…The children’s grades dropped, and Mikey’s teacher called saying he might have to repeat, mainly because of so many missed homework assignments…Substandard housing was a blow to your psychological health: not only because things like dampness, mold, and overcrowding could bring about depression but also because of what living in awful conditions told you about yourself.”

• Evictions used to be rare; now, there are sheriff squads and moving companies whose full-time job is to carry out evictions.
• Families have watched their incomes stagnate or fall while housing costs have soared.
  • Since 2000, the cost of fuel and utilities have risen by more than 50%.
  • Today, most renting families spend over half their income on housing.
  • Millions of Americans are evicted every year because they can’t make rent. In Milwaukee, a city of fewer than 105,000 renter households, landlords evict roughly 16,000 adults and children each year. 
• Milwaukee used to be flush with good jobs. But throughout the second half of the 20th century, employers moved their plants.
  • Between 1979 and 1983, Milwaukee’s manufacturing sector lost 56,000 jobs.
  • This devastated Milwaukee’s black workers, half of whom held manufacturing jobs. When plants closed, they tended to close in the inner city, where black Milwaukeeans lived.
  • The black poverty rate rose to 28% in 1980, and by 1990 it was 42%.
• The last 40 years also witnessed the professionalization of property management. Since 1970, the number of people primarily employed as property managers more than quadrupled.

Rental properties generally
“The Hinkstons treated the refrigerator, sour-smelling and sitting tomblike in the kitchen, like they treated the entire apartment: as something to endure, to outlast. It was how they saw the mattresses and small love seat too, each deep-burrowed with so many roaches they planned to leave them all behind when they moved out.”

• Generally, when tenants fall behind, landlords have three options. They can let it slide and watch their income fall, begin eviction proceedings, or start a conversation.
  • The first option generally means that if a landlord is too lenient, they lose business.
  • Evicting costs money too, because the actual eviction necessitates certain fees, and finding replacement tenants costs money.
• Landlords have lots of bills: mortgage payments, water charges, maintenance expenses, property taxes, etc. Sometimes a major expense, like a broken furnace, could leave landlords close to broke until the first of the month.
• Poor families are often compelled to accept substandard housing. Milwaukee renters whose previous move was involuntary were almost 25% more likely to experience long-term housing problems than other low-income renters.
  • A prerequisite for a healthy and engaged community is the presence of people who are present and look after the neighborhood–even just one eviction can torpedo this environment.
• Landlords are allowed to rent units with property code violations as long as they are up front about the problems.
• A common strategy for tenants is, if they are going to get evicted, they might as well save their money and put it toward the next move. Because rent takes almost all of their paycheck, families sometimes have to initiate an eviction in order to save enough money to move elsewhere.
• For landlords, it is cheaper to deal with the expense of eviction than to maintain their properties; it is possible to skimp on maintenance if tenants are perpetually behind, and many are because rent is too high.
  • Tenants able to pay rent in full could take advantage of legal protections designed to keep housing safe. But when tenants fall behind, these protections dissolve.
  • Between 2009-2011, nearly ½ of all Milwaukee renters experienced a serious and lasting housing problem, like mice, a broken window, or no heat.
    • Tenants who fell behind either had to accept dangerous housing conditions or be evicted, but from a business point of view, this arrangement could be lucrative.
• Children cause headaches for landlords. Fearing street violence, many parents in crime-ridden neighborhoods keep children locked inside. Children cooped up in small apartments wreck havoc, can test positive for lead poisoning (resulting in a pricey abatement order), come under the supervision of child protective services whose caseworkers inspected families’ apartments for violations, etc.
  • Landlords barring children from properties is an old tradition. When Congress passed the Fair Housing Act in 1968, it didn’t consider families with children a protected class, allowing landlords to openly turn them away.

How nuisance laws affect domestic violence

• In the past decades, courts found that absentee landlords that didn’t screen tenants could be liable in, say, creating a drug house.
• In this context the nuisance property ordinance was born, allowing police departments to penalize landlords for their tenants’ behavior.
• Most properties are designated “nuisances” because an excessive number of 911 calls were made within a certain timeframe.
  • A woman reporting domestic violence was far more likely to land her landlord a nuisance citation. Most of the time, landlords evicted women abused by men who did not live with them.
• In 2008 in Wisconsin, more than one victim per week was murdered by a current or former partner or relative.
  • Milwaukee’s chief of police wondered why many victims never contacted the police for help–but his department’s own rules presented battered women with a terrible choice: keep quiet and face abuse or call the police and face eviction.

How the ghetto become the ghetto – by design
“People like Larraine lived with so many compounded limitations that it was difficult to imagine the amount of good behavior or self-control that would allow them to lift themselves out of poverty. The distance between grinding poverty and even stable poverty could be so vast that those at the bottom had little hope of climbing out even if they pinched every penny.”

• Decades ago, urban landlords realized that piles of money could be made by creating slums.
  • This included absolute liability for rent, which held tenants responsible for payments even in the event of fire or flood.
  • After the Civil War, freed slaves saw land ownership as the truest possibility of liberation, but during Reconstruction wealthy whites maintained a monopoly on the soil. 
  • Returning to plantations as sharecroppers, black families descended into a cycle of subsistence farming and debt, while white planters continued to grow rich.
• In the early 20th century, African-American families participated in the Great Migration, moving from the rural South to northern cities.
  • They crowded into urban ghettos and the vast majority depended on landlords for housing.
  • For the first time in the history of America, New Deal policies made homeownership a real possibility for white families, but black families were denied these benefits when the federal government deemed their neighborhoods too risky for insured mortgages.
  • Over three centuries of systematic dispossession from the land created a semi-permanent black rental class and an artificially high demand for inner-city apartments.
  • In the 1950s, after buying houses on the cheap from nervous white homeowners in transitioning neighborhoods, private investors would sell these houses to black families for double or triple their assessed value.
  • Once they moved in, black families had all the responsibilities of home ownership without any of the rights.
    • When they missed mortgage payments, banks evicted them as soon as their down payments were pocketed, and the profits were staggering. 
  • The 1968 Civil RIghts Act made housing discrimination illegal, but subtler forms prevailed.
    • Even by setting clear criteria and holding all applicants to the same standards, equal treatment in an unequal society could still foster inequality. 
    • Because black men were disproportionately incarcerated and black women disproportionately evicted, uniformly denying housing to applicants with recent criminal or eviction records still had an incommensurate impact on blacks.

Moving forward

• Solutions: Do we believe that the right to a decent home is part of what it means to be an American?
• Public initiatives that provide low-income families with decent housing are some of the most meaningful and effective anti-poverty programs.
  • The freedom to profit from rent conflicts with the freedom to live in a safe and affordable home. To rebalance these two freedoms, we should significantly expand our housing voucher program, particularly for the millions struggling unassisted in the private market. A universal housing voucher program would carve a middle path between the landlord’s desire to make a living and the tenant’s desire to live.
    • Every family below a certain income level would be eligible for a housing voucher. They could use that voucher to live anywhere they wanted, as long as their housing was neither too expensive and luxurious nor too shabby and run-down.
    • The family would dedicate 30% of their income to housing costs, with the voucher paying the rest.
    • Evictions and homelessness would plummet and families would immediately feel the income gains and be able to buy enough food. 
    • Not every voucher holder is poor–many are elderly or disabled; others have modest incomes.
  • Although vouchers are not always the most efficient option, particularly in expensive cities, they are the best way to deliver a national program.
    • Would a universal housing program be a disincentive to work? One study has shown that housing assistance leads to a modest reduction in work hours and earnings, but others have found no effect.
      • Families crushed by the high cost of housing cannot afford vocational training or extra schooling, and many cannot stay in one place long enough to hold down the same job.
      • Affordable housing is a human-capital investment, just like job programs or education.
  • Some landlords wouldn’t want to house “those people.” If we permit this kind of discrimination we doom voucher holders to certain landlords who own property in certain neighborhoods.
    • A well-designed program would ensure a reasonable rent that rose at the rate of inflation and include flexible provisions allowing landlords to receive a modest rate of return.
    • Expanding housing vouchers without stabilizing rent would be requiring taxpayers to subsidize landlords’ profits.
  • Legislatures all over the country have restricted housing aid to the poor but expanded it to the affluent via tax benefits for homeowners.
    • In 2008, federal expenditures for direct housing assistance totaled less than $40.2 billion, but homeowner tax benefits exceeded $171 billion.
• Courts dealing with eviction cases tend to just push cases through. Providing tenant lawyers could change that.
  • Directing aid upstream (via a few hours of legal services) could lower costs downstream.
    • For example, a program in the South Bronx (2005 – 2008) provided more than 1,300 families with legal assistance and prevented eviction in 86% of cases. It cost around $450,000 but saved NYC more than $700,000 in estimated shelter costs.
• There are many external factors that create poverty. For instance, wage increases don’t matter as much if rents rise drastically.
  • Many landlords know that there is a lot of money to be made off the poor. Exploitation thrives when it comes to the essentials, like housing and food.

• How you can lose all your possessions via the burden of storage bills
• The downfall of public housing
• How the Department of Housing and Urban Development’s Fair Market Rent and federal housing vouchers ultimately brought huge gains for landlords
• The consequences of landlords screening renters: landlords decide who gets to live where–near good schools or failing ones, safe streets or dangerous ones–these practices reveal why crime or an area’s civic engagement can vary drastically from one block to the next