THE CONDITION OF RENTAL HOUSING IN NEW ORLEANS

A Comparative Review And Analysis Of Trending Misinformation and
Misconceptions Masquerading As Reliable Data.

Summary

  • US Census Bureau’s American Home Survey‘s data ranks Orleans, Jefferson and Kenner inline with the national averages in selected categories scoring a high 92.72%.
  • Fair Housing’s report For Rent: Unsafe Over Priced Home For The Holidays is misleading and mistakenly states that “78% of all rental units needed major repairs at some point in the previous year.”
  • Rental Registry proponents are exploiting hardships and problems effecting a small percentage of renters to create a nonexistent crisis that is not supported by factual data.
  • Should a Homeowner Rental Registry be considered or will there be a double standard?
  • What about the “Grandfather Clause” that exempts many of New Orleans homes and rentals form modern codes and ordinances?

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Introduction
misinfo picAeschylus wrote, “In war, truth is the first casualty.” Seldom has this poignant axiom been more applicable as the New Orleans City Council considers introducing costly legislation called The Rental Registry. The justification for this unnecessary proposal is not grounded in factual analysis but skewed data and horror stories that play more on ones emotions than intelligence. This multimillion dollar proposal will siphon millions in fees from the pockets and purses of hardworking taxpayers to allegedly fund the war against bad landlords. The process being proposed is a draconian style door-to-door inspection of every rental property in New Orleans by city inspectors aka “rental police” who will determine if the your rental unit meets their “minimum standards” that have yet to be defined.

Local government wants to enter your home, uninvited, and look in your bathroom, kitchen, basement, bedroom, closets and perhaps under your bed to certify your home is safe and habitable. Apparently, renters have suddenly become incapable of making such personal decision and must forfeit their right of privacy to government intervention—but it’s not free.

The program could extract $10 to $19 million from renters as rents are increased to pay the ever increasing fees. Never mind the fact that established and detailed codes and ordinances currently exist on both a state and municipal level that regularly cite property owners for code violations when reported by renters or concerned neighbors. So, why is this costly, overlapping process being proposed?

Proponents of the Rental Registry say there is huge crisis in the city created by bad landlords and they want someone to address these folks and make them accountable. The fact that some renters are having difficulty getting their landlord to make repairs in a timely manner may be true, but the issue is being greatly exaggerated by proponents who are using misleading data to create a false perception. Moreover, it is difficult to formulate new codes and ordinances when one lacks a working knowledge and understanding of existing rules, laws, and ordinances and how to utilize them to effectuate the correct result. What is being proposed is an overlapping and duplicate multimillion dollar bureaucracy that is totally unwarranted and accomplishes nothing that could not be achieved through the current process.

We hope you will take the time to read all the facts listed here and included in the attached spreadsheet (Exhibit A AHS) that details the specific data cited and misused by Rental Registry proponents to foster their misguided agenda. We also included the correct information along with our comments and explanatory notes from the American Home Survey to clarify the distortions.

US Census Bureau’s American Home Survey

The 2011 American Home Survey (AHS) was conducted by the US Census Bureau and sponsored by HUD. This is the same survey being cited by Rental Registry proponents that purportedly alleges and characterizes New Orleans rental housing and landlords as among the worst in the nation. Naturally, we were all disturbed by the condemning comments being propagated by the Rental Registry proponents as factual evidence of a major crisis. Therefore, we immediately began researching the data to gain a first hand knowledge of exactly what the data revealed and how it applied to New Orleans renters and landlords.

The AHS sample questionnairei contains 275 pages of questions and comments. The national reportii contains 186 pages of responses and explanatory notes form across our nation. The tri-city reportiii for Orleans, Jefferson and Kenner is comprised as a single report and without distinction as to the respondents city of origin. It is not possible to ascertain a single city of origin for the159,100 renters and 303,900 homeowners that responded to the survey (463,000 in all); the closest estimate being a divisor of 3. Therefore, we performed a comparative analysis of the tri-city data against the national data and plugged in the numbersiv that the Rental Registry proponents were estimating as exclusive to New Orleans. We mirrored the categories cited by Rental Registry proponents that they mistakenly classified as “major repairs,” 4 of which are clearly minor repairs, 3 that could be minor or major and 1 that measures exclusive use or the lack therefore. Further details and explanatory notes are noted on the attached spreadsheet, (Exhibit A AHS).

The Fair Housing Report Misinterprets Critical AHS Data

One of the most troubling statements that we heard Rental Registry proponents quoting over and over is sourced from the Fair Housing report titled For Rent: Unsafe Over Priced Home For The Holidaysv. Here is the quote:

Estimates from the last American Housing Survey in 2011 show that as many as 49,000- roughly 78% of rental units– in New Orleans needed major repairs at some point in the previous year.

The footnote reference, further explains how proponents arrived at the 78% of rental units needing major repairs in the previous year. Here is an excerpt from their footnote:

1 2011 AHS data shows that 124,800 rental units in the area were in need of major repairs at some point, out of a total of 159,100 rental units in the New Orleans-Metairie-Kenner area. In other words, about 78% of the rental units needed major repairs. Assuming this percentage is equal across the area, 78% of the private rental units in New Orleans in 2011 (62,500) yields an estimate of approximately 49,000 rental units in need of major repairs.

We reviewed the AHS report and were unable to locate any question about major repairs being performed on rental units in the previous year. However, we did find a question that measured a renter’s satisfaction with his/her landlord whenever he performed a major repair. This question and data was clearly misinterpreted and used to stir up a firestorm of controversy. Lets carefully look at the question survey participants were asked and the choice of possible responses.

AHS question: When the owner has to do MAJOR maintenance or repairs:vi  

Q.  Do they start quickly enough?

1. Yes usually 2. Not usually 3. Very mixed 4. Haven’t needed any 5. Landlord not responsible for maintenance

Q.  Do they solve the problem quickly once they start?

1. Yes 2. No 3. Mixed

Q.  Are they polite and considerate of your home?

1. Yes 2. No 3. Mixed”

facts picWhen was this major repair made? There is not one word in either the question or the possible responses that indicates any time frame—ABSOLUTELY NONE. The word “when,” in the context of the question, implies “whenever” the owner has to do major maintenance or repairs. The respondent is free to reference his/her full and complete tenancy with the landlord which could be any number of years.

This type of question is a “recall question” that requires the respondent to think back in their mind to a time when the landlord made a major repair during their tenancy and share their impression of the experience.

Their response measures a renter’s satisfaction with the landlord’s performance when making a major repair on the rental unit. The question does not ask when the repair was made and it does not define what is considered a major or minor repair. What it does ask is how satisfied the renter was with the landlord’s response to the problem. It is not a quantifier of how many major repairs were needed during the past year. The renter’s response is based upon a renter’s full tenancy which could be any number of years.

When I was a renter we lived for 7 years in a rented double and had one major repair, a new sewer line in our front yard. Therefore, my response would have been “yes” to all 3 questions which simply measured my satisfaction with the service performed by my landlord.

As explained in the AHS explanatory notes, the question was designed to measure a renter’s satisfaction and did not ask the date, year or limit the time frame in which the service was performed. Consider these AHS notes:

Renter maintenance quality.

Renters were asked their opinions of owner’s response time and if owners were polite and considerate for maintenance and repairs of major and minor problems. The definition of a major or minor problem was left up to the discretion of the respondent. Satisfaction was measured by the following choices: ‘‘usually,’’ ‘‘not usually,’’ ‘‘very mixed,’’ ‘‘haven’t needed any,’’ and ‘‘landlord not responsible for maintenance.’’ When problems occurred, renters were asked if problems were solved quickly once repairs started.

There is no time frame associated with this opinion question as is specifically asked in the flush toilet breakdown (past 3 months), signs of rodents (past 12 months), disaster repairs made in the (past 2 years) or vacancy durations lasting (2 years or more). There are other questions in the survey that limit the respondents response to a time frame, but not this one. Here is the question again:

When the owner has to do MAJOR maintenance or repairs.

The AHS explanatory notes do not mention a time frame either. Nothing about the question is qualified by or restricted to any number of years, but left open to the renters past experience and full term of their tenancy which could be any number of years.

What is noteworthy and bears reflection is the satisfaction rate. The satisfaction rate to all 3 questions averaged 93.51% (cell C16) which beat the national average of 91.33% (cell D16). Therefore, it is correct to say that renter’s surveyed in the tri-city area were very satisfied with their landlord’s response to problems they considered to be major. (see attached spreadsheet’s notes for more details).

How did the survey define a major repair from a minor repair? It didn’t, it was “left up to the discretion of the respondent.” Now one would think that everyone is capable of defining a major repair from a minor repair, right? Not so.

In the AHS categories sourced by the Rental Registry proponents and mirrored in this report, we learned that proponents included a flush toilet breakdown in the past 3 months and signs of a rodent in the past 12 months, and a nonworking smoke detector as a major repair. This type of embellishment undermines ones credibility and calls into question the veracity of the entire proposition. To stir up controversy with misleading statements is wrong, but to use misinformation as a basis to enact new laws would be unconscionable.

Is there really a crisis in the rental industry that requires more government intervention, new and overlapping ordinances and millions of dollars of perpetual and insatiable fees that are being proposed by Rental Registry proponents? Let’s look a little deeper into the so called crisis.

According to the New Orleans data, approximately 93.61% (cell H10) of renters reported no problems, leaving an estimated 6.39% (cell G10) of New Orleans renters that required some kind of repair at some point during the respective time frame. These repairs included a variety of routine repairs and maintenance, for example:

  1. Lacking a working bath in the past 3 months: This is a ‘flush toilet breakdown” in the past 3 months for any reason and means the renter was without a complete functioning bathroom at some point during the 3 month time period measured? According to AHS explanatory notes, a breakdown could include anything e.g., a broken flapper chain, a comb or brush stuck in toilet, and all manner of clogs, etc., even if it was caused by the renter or a natural disaster. Here’s an interesting note: Just a few minutes ago (2-18-15; 2:04 pm) several renters called to report none of the toilets will flush in their building. Maintenance was dispatched and discovered the city of New Orleans S&WB turned the water off while they were working on the cities main line effecting the neighborhood. According to AHS notes this would be counted as a breakdown and could be misused to file a compliant against a landlord.Here’s the AHS explanation of a flush toilet breakdown during the past 3 months:

The flush toilet may be completely unusable due to a faulty flushing mechanism, broken pipes, stopped up sewer pipes, lack of water supplied to the flush toilet, or some other reason. Breakdowns are included even if caused by a natural disaster.vii

  1. Do you currently have a working smoke detector inside your rental” (cell A8)? Smoke detectors are important and they can save lives, but a nonworking smoke detector cannot be categorized as a “major repair.” Call it a top priority, or high priority—not “major repair.” Unfortunately, Rental Registry proponents included this category as a major repair. To extrapolate from the data that these smoke detectors are still not working today is simply not possible form either the question asked or the answer given. The question does not ask how long have you been without a working smoke detector, does your unit have a smoke detector, have you reported the problem to the owner or when is maintenance coming to repair it? Therefore, it is incorrect to assume and suggest that these renters are waiting on new laws to be enacted so they can get a working smoke detector. REMEMBER, the question: Do you currently have a working smoke detector?

    If anyone doesn’t have a working smoke detector and needs help, do one on the following:

    1. Call or write a note to the landlord asking for a repair to be made ASAP. You can remind him that they are required by law. If he refuses…
    2. Call the NOFDviii and report the problem. Also you might applyix online and ask NOFD to change the batteries or install up to 2 smoke detectors for free (see notes on attached spreadsheet for details).
    3. If you can’t wait for help and your landlord has not responded in a reasonable amount of time after being notified in writing, buy one at your local hardware or home builders store, especial if you have small children.

Finally, we found nothing in the AHS data that remotely suggest that 78% of New Orleans rental properties needed major repairs or remain in a state of disrepair as alleged by Rental Registry proponents and is the basis for their declaration of war against landlords. This gigantic, costly, multimillion dollar bureaucratic process called the Rental Registry is being touted as the solution to a non existent crisis.

Please understand, in no way are we suggesting that renters needing help getting a repair completed on their rental unit doesn’t matter—they matter. If only one person needs a repair it is important that person’s landlord tends to the repair. If the property owner fails to perform the needed repair in a reasonable amount of time, our current laws and ordinances are sufficient to hold that landlord accountable.

Rental Registry Proponents Are Exploiting Hardships And Problems Effecting A Small Percentage Of Renters To Create A Nonexistent Crisis

The war on bad landlords aka Rental Registry is actually a tax on all renters to fund a costly registration and perpetual inspection process that the sourced data, when properly understood, indicates is unwarranted and unnecessary. We are talking about a $10 to $19 million dollar bureaucracy that is an absolute step in the wrong direction.

Rental Registry proponents have called this a “first step,” but can that step be justified as the right step? Will the next step be a Homeowner’s Registry? More on this in a minute.

We have stated repeatedly that existing codes, laws and alternatives are in place now to address the alleged problems on both a municipal and state level. These laws protect, govern, regulate, and provide for due process under the law, so what’s the problems?

Realistically, there are a few landlords who fail to follow the laws and conversely, there are a few renters that fail to follow the leasing agreement and laws as well. The problem here is not a lack of laws but a lack of honesty, integrity and obeying the existing rules. In a perfect world these problems would not exist, but this is not a perfect world and people do not always do the right thing. Our existing codes, ordinances and laws server as a deterrent and to hold people accountable for their actions or lack thereof. They protect the rights of both the tenants and the landlords. The Louisiana Attorney General’s office publishes a handbookx for tenants that cites in detail all the laws and rights of a tenant. Every renter should read this publication—it’s free. Here’s what the Attorney General suggest:

Every day the Attorney General’s Office receives questions and complaints involving landlord and tenant issues. Education is the best way to address these types of complaints and give you the answers you need. (James D. “Buddy” Caldwell Attorney General)

Education is the best solution, not costly legislation! The tools are in place now to get the job done.

It is not possible to eradicate bad landlords or bad tenants from our city and it is incorrect to believe the problem is systemic—it is not and there is no evidence to suggest otherwise. Bad landlords and bad tenants represent between 5% to 10% of the rental market max and current laws or sufficient to process these problems. Rental Registry proponents want to exaggerate and exacerbate the issue into a full blown controversy to foster their misguided agenda. Unfortunately, their proposal is not reasonable because it does not truly focus its energy and resources on the problem—bad landlords that refuse to make repairs.

Instead of addressing the specific problem which is landlords that are not responding to the renter’s repair, proponents have concocted an elaborate plan to tax the 90% to 95% of good landlords and renters that are not part of the problem and demand $10 to $19 million in registration fees and inspection fees. This idea is bad law, bad government, bad business and completely unnecessary. Why? Because we have existing laws and a process in place now that is tested and proven to hold all property owners accountable. There is no need to duplicate our efforts with a new multimillion dollar proposal. Consider these laws that already exist. Look them up and read them.

New Orleans Codes and Ordinancesxi has sufficient preexisting and exhaustive standards of habitability safety, and welfare codes. Chapter 26 Article IV, Minimum Property Maintenance Codes, Divisions 1-11 provides a detailed body of ordinances that require compliance and provide for a minimum habitability standard.

Louisiana Civil Codesxii comprises over 45 civil codes regarding minimum standards for rental properties, leasing agreements, property owners responsibility and provides detailed tenant’s rightsxiii and laws governing habitability, safety and welfare of tenant’s and much more. All information is free to download.

One vocal proponentxiv of the Rental Registry stated: “All we are saying is that rentals should be treated like any other business.”

Consider the following facts.

Like any other business, rental property owners:

  1. Pay federal taxes.
  2. Pay state, and municipal taxes or property taxes.
  3. Obtain an occupational license.
  4. Are regulated and must comply with all state laws, municipal codes and ordinances including New Orleans Code Enforcement.
  5. Are governed by a special set of proprietary “tenant landlord laws” that allow for due process of any grievance by either party that fails to follow the law or rental agreement.
  6. Are accountable to the Louisiana Attorney General’s Consumer Affairs Division that will intercede on behalf of renter’s and is charged with the responsibility of administering and enforcing the Louisiana Equal Housing Opportunity Act.
  7. They must comply with the state fire marshal’s office and NOFD ordinances.
  8. Must additionally comply with the federal Fair Housing Act of 1968xv as currently amended which prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and disability.

In general, rental property owners are treated like any other business, even though they are not like any other business at all. To a renter, the rental unit is their home, a sanctuary they have chosen to live out their private lives. The last thing a renter or landlord wants to see is an unnecessary rental increase forced upon them by a misguided 3rd party agenda. Do we really want or need the government to intrude into the privacy of our homes, our bedrooms and private baths.

Prior to leasing a rental, most renters tour the rental unit and carefully examine all the facilities and amenities. Renters also tour the neighborhood to see if they like the area. Naturally, everyone has different preferences and if the rental unit meets their standards they will usually move forward with negotiating a leasing agreement with the property owner. The leasing agreement must comply with all federal, state and municipal laws, codes and ordinances. If there is no written lease, state laws govern the leasing relationship. Nothing in the leasing language can violate the law.

Rental Registry proponents are exploiting the hardships and problems faced by a small percentage of renters and trying to create a crisis that is not supported by the factual data. If they succeed, renters will be forced to pony up $10 to $19 million out of pocket to pay for a nonexistent crisis, and homeowners will face the threat of a Homeowner Registry looming overhead.

Rental Registry Is A Double Standard?

If the Rental Registry is enacted, look for homeowner inspections to follow. You can also expect fees to increase year-over-year as is the bureaucratic custom. A combined Homeowner And Rental Registry could extract upwards of $25 million from the pockets of renters and homeowners. While the landlords will pass all fees along to the renter, the homeowner would be stuck paying his own fees. Perhaps, once the Rental Registry is up and running the name might be changed to the Homeowner And Rental Registry. Naturally, more inspectors and office staff would be needed to process the 89,000 homeowner’s registration fees and other inspection fees. Will the next step be to go after the homeowner’s dollars.

One could make a strong argument for a combined Homeowner And Rental Registry because it is equally important that the homeowner’s property be held to the same “minimum standards” as the rental property next door? Does not the rental property owner have a right to demand the city inspect the homeowner’s house adjacent to his rental for substandard conditions like peeling paint, leaky sewer-lines, rat harborage, other code violations and fire hazards?

The rental property owner has a substantial investment in the community and a bad homeowner with a substandard house next door or across the street will only lower the value of the rental property and make it extremely difficult for the rental owner to find good tenants and charge a fair price. We cannot have a double standard. Is not the issue about the condition of housing in New Orleans, and not about who owns the property. How can we say to the rental property owner, the condition of your rental must meet a “minimum standard” while ignoring the deplorable condition of a homeowner’s property next door?

Proponents of the Rental Registry will argue that there is no need to regulate homeowners because they are already regulated by existing municipal codes and ordinances that are sufficient to address any substandard conditions. All the landlord needs to do is report the problem to code enforcement and they will address the problem according to the seriousness of the violation.

And there it is my friend, all anyone needs to do, is report the problem to code enforcement and they will focus their time, energy and resources on the problem and not the 90% to 95% of rental properties that have not been reported by a renter who is happy with his rental unit.

For illustration purposes let’s assume 10% of the rentals need repairs. That’s 1 in 10 rentals that need to be inspected and cited. The Rental Registry requires all rentals to register, pay the fee and be inspected. Therefore, it will take 9 times longer to reach the 1 rental unit that actually needed help. If you are truly trying to resolve the problem a Rental Registry is possibly the worst approach to effectively accomplishing the task. It is colossal waste of time, energy, resources and money.

Stop! Wait a minute! Is any of this really necessary? The short answer is No, but don’t take my word, let’s look at a few more facts.

In the AHS tri-city report of the selected categories we averaged 92.72% (cell E10) reporting no problem. On the attached spreadsheet we also plugged in the numbers tabulated by the Rental Registry proponents as exclusive estimate for New Orleans. New Orleans scored 93.61% (cell H10) reporting no problems in the selected categories and was also inline with the national average 93.54% (cell L10). The table below is just a sample of the attached spreadsheet data that demonstrates there is no need for a multimillion dollar overlapping bureaucratic process to address a nonexistent crisis. The current process addresses in detail all the codes and standards of habitability.

sample exhibit data A

Legislative action is never the answer to addressing limited issues, especially when effective remedies are available to achieve the same results without costly legislation and burdensome fees. The facts demonstrate that the problem is not systemic, but limited in nature to between 5% and 10% max. As our Attorney General‘s office stated:

Education is the best way to address these types of complaints and give you the answers you need.

If anyone is of the mind to discount, disregard or distort the facts because they are married to an agenda, then such behavior is more egregious than the problem they desire to remedy. Our focus must be on the problem—properly identifying it, evaluating its scope and developing an action plan to effective achieve our objective. Today’s renters are savvy, smart consumers. Let’s educate and teach them the process and necessary steps they must take when they believe the landlord is mistreating them. Let’s teach them self-sufficiency and not make them dependent on a multimillion dollar process just to get the toilet repaired.

What About The Grandfather Clause?

New Orleans homes and rental properties date back to the 1700’s, predating all our modern building codes and safety standards. A “grandfather clause” allows the current status of a pre-existing house or rental to remain unchanged when new codes and standards are enacted. The Rental Registry ordinances could easily kill our “grandfather clause” because many of our older buildings may not meet the new “minimum standard.” Property owners would be compelled to bring their building up to an arbitrary “minimum standard” which could be cost prohibitive. The unit would not be eligible for the Rental Registry Occupancy Permit and therefore the rental owner would face the monthly mortgage without the benefit of the rental income—not to mention the 2nd mortgage needed to meet the new minimum standard. Never mind the fact that according to the AHS data report, on average 93.51% (cell C16) of renters were satisfied with their landlords repairs and maintenance responses and 92.27% (cell E10) reported no problems.

Conclusion

The Rental Registry concept is a bad idea for New Orleans. The supposed crisis from which it arises is based on misinformation that is inconsistent with the facts. The premise is rooted in skewed data and cartoon caricatures designed to elicit an emotional response rather than appeal to ones intellect. It is completely unnecessary because it will achieve nothing that cannot already be achieved through our existing codes and ordinances, with one exception—extracting $10 to $19 from hard working over taxed citizens of New Orleans who can least afford to pay. It is not a self-supporting bureaucracy as some proponents allege—landlords will raise rents to pay fees. It will drive rental rates higher across the board and institute an insatiable taxing process. If enacted, the Rental Registry could soon lead to a Home Owner And Rental Registry as challenges are made against the creation of a double standard.

In closing, we hope the following illustration will help make our point:

Suppose for a moment that you are a New Orleans’ business person and there arises an important problem with your business in Spring Field, Missouri. From New Orleans you would need to fly or drive north to reach Springfield, but several people that know little about travel and less about running a business suggest you charter a private plane and travel due south until you reach your destination.

You pause for a moment and look at them in a strange sort of way and say, “that’s ridiculous.”

So it is with the Rental Registry idea, it heads due south and takes you on a costly, unnecessary journey around the world to reach a destination that could have otherwise been achieved by simply going directly to the problem which is due north.

The Rental Registry concept abandons sound business principles and problem solving skills to address a limited problem that could otherwise be met through existing codes and standards. We cannot afford an unsolicited $10 to $19 million door-to-door invasion of our private homes that we choose to buy or rent.

HOME

END NOTES

vSee note 4 above.

xiiiA Guide To Louisiana Landlord & Tenant Laws: https://www.ag.state.la.us/Shared/ViewDoc.aspx?Type=3&Doc=220

xivJames Perry, GNOFHAC

xvFair Housing Act 1968: http://www.justice.gov/crt/about/hce/title8.php

Contacts for New Orleans City Council members and staff. Your voice matters!

SIGN THE PETITION
City Council, STAY OUT of Private Residences!

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