Higher rents, 'massive displacement': The unknown cost of Detroit's landlord crackdown 

click to enlarge Lillie McGee runs her faucet for Amina Kirk, a legal advocate with the Detroit People's Platform, to show that her hot water doesn't work. - VIOLET IKONOMOVA
  • Violet Ikonomova
  • Lillie McGee runs her faucet for Amina Kirk, a legal advocate with the Detroit People's Platform, to show that her hot water doesn't work.

Lillie McGee swings closed an entry door to her apartment building on Detroit's west side to show how it rests on its frame without shutting. Squatters, she explains, are able to access the building, and have at times taken up residence in the vacant units that surround her home.

"And here I thought I had new neighbors," McGee, who's asked we withhold her real name, says wryly.

Inside her spartan two-bedroom, the stove top is cluttered with pots she says she uses to boil water to bathe. The hot water has been out for months. Last winter, the heat didn't work.

The problems are not unique to this building, McGee says. As a lifelong, low-income renter in the city of Detroit, she's accustomed to living in poor, and at times unsafe, conditions. At other rentals, she's endured roach infestations, leaky ceilings, mold.

"It's always been difficult to get landlords to respond," she says. "Some would just be like, 'If you don't like it, find someplace else.'"

Once, in 2010, McGee withheld rent with the hope that it would prompt her landlord to deal with a roach problem. She was evicted and sent scrambling to find a place to live. Unable to qualify for several apartments within her price range, she wound up moving into a hotel.

McGee's plight is typical for a low-income renter in Detroit. Tenants in at least one in every five of the city's rental properties face eviction each year, often for withholding rent over unlivable conditions, according to a Detroit News investigation published last year. Part of the issue, the News found, was the city's lax enforcement of building and safety codes. As of last year, just 4,200 rental units had been inspected and registered with the city, as is required by law. There are 140,000 total rental units in Detroit; inspections are required each year.

In order to get a handle on the problem, the city in February launched a massive undertaking to get landlords to register their rentals, undergo inspections, make the necessary repairs to bring their properties up to code, and obtain certificates of compliance. The program is being phased in throughout the city, with all zip codes required to be in compliance in 2020.

But while the rental inspection and registration program is designed to improve living conditions for people like McGee, there's fear that it will squeeze mom and pop landlords along with the big slumlords the city is targeting — leading to rent increases for Detroiters who can least afford them. The thought is that by requiring landlords to make improvements that housing industry experts say can cost up to $10,000 per standard single-family home, landlords will be forced to pass the cost on to tenants, taking rents up 25 to 50 percent, by at least one property manager's estimation. If they can't charge enough in rent to recoup what they've spent on the property, landlords are expected to sell, in some cases to speculators or to tenants through precarious land contracts that often result in eviction. Both scenarios could jeopardize Detroit's already dwindling supply of low-cost rental housing and further destabilize its neighborhoods as evictions threaten to bring about more vacancy and blight.

As part of the rental registration program, landlords must pass a lead inspection and have their taxes and any outstanding blight tickets paid. Landlords who don’t comply are threatened with stiff penalties, including monthly blight tickets for failing to register the property and get a lead clearance — which together total $750 — and the loss of months’ worth of rent, as the city encourages tenants to escrow. Criminal charges are also a possibility.

Early signs show landlords at the overwhelming majority of the city's rental properties may have trouble or be unwilling to make the requisite improvements. Compliance rates are abysmal in the first two zip codes where the program has been fully or almost fully implemented. On the city's far east side, in 48215, where a six-month deadline for improvements came up Aug. 1, landlords brought up to code just 11 percent of properties. In neighboring 48224, just five percent of properties have been brought up to code ahead of that zip's Sept. 1 deadline.

click to enlarge Detroit rental compliance schedule. - CITY OF DETROIT
  • City of Detroit
  • Detroit rental compliance schedule.

With so few rentals in compliance as the ordinance goes into effect, the unknowns are tremendous. There's also nowhere to look for clues on how this might shake out. No other major city in the country — let alone one as economically distressed as Detroit, and with housing stock as old — is known to have attempted such wide scale enforcement of its property maintenance codes in such a short period of time.

A program in Cleveland that aims to get rental landlords on track to compliance is being phased in over twice the length of time as Detroit’s effort and affects about half as many homes. Other cities don’t have as strong of consequences for landlords who fail to comply, or require inspections only once every few years.

"We're the first city out to shoot in developing this process," says Mark Kincannon, the project manager on the rental inspection program. "Everybody's watching us."

But housing advocates warn that, when all is said and done, Detroit will not be a city known for providing particularly safe living conditions. Rather, it will be beset by displacement and disinvestment as a result of its own negligence.

Said Amina Kirk, with the nonprofit advocacy organization the Detroit People's Platform, "It's irresponsible to draft an ordinance that has this large of an impact on our low-income housing stock without being very careful and conscientious about ensuring that it does not result in displacement."

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