Affordable Housing

How a rent escrow law would improve the supply of low-income housing

Nonpayment of rent is clearly a more frequent problem among poor people. Their lower income also limits how much rent they can pay. So lower-income neighborhoods have lower rents to start with and more problems with tenants being able to pay even those lower rents. This situation creates a serious restriction on the rental income that services and maintains lower-income housing, which is older housing almost always in need of repairs and improvements.

On top of this situation is our state’s rent withholding law, which allows tenants to stop paying rent and be safe from eviction for any reported defect in their apartment under the state sanitary code. Obviously, lower-income housing is a sitting duck for the use and abuse of this law – the “free rent trick.” Tenants turn their evictable nonpayment into nonevictable rent withholding by complaining about apartment conditions, blocking repairs and damaging their apartments to further lengthen their rent-free living.

This prolonged nonpayment of rent is a huge burden on lower-income housing, sucking needed money out of the housing and often leading to abandonment.

A rent escrow law requiring tenants to escrow any rent they claim to be withholding would shorten the rent-free period and thereby improve the rental stream of lower-income housing in particular. Less abandonment and housing in better condition effectively increases and improves the supply of lower-income housing.

It’s a no-brainer. But politicians need a huge amount of support to buck the legal services establishment that wishes to maintain the status quo for their own self-serving reasons – to be able to slam landlords and justify their jobs.