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Affordable in Ohio

A five part series in November 2015 looks at affordability issues in Ohio
Part 5 of the series is here

Part 1: 
Renters need stability before affordability becomes a crisis in Ohio
    Finding and keeping an affordable rental home is a challenge to many tenants today as the increase in rents outstrips the increases in household income. Just this month at least three major West Coast cities, Los Angeles, Portland and Honolulu, have declared "homeless states of emergency" and other are working furiously to address the problems of displacement and affordability. 
    While Ohioans have not been "in the spotlight" in the rental affordability crisis which is sweeping the nation, Ohio renters are feeling the pinch of "rent burden," that is: paying more than 30% of household income for shelter costs (rent and utilities).  Even in Ohio, the increased demand for rental housing since the Housing Bubble of 2007-2009 has prompted rent increases. Ohio has been "lucky" that slow/no population growth has not made the supply and demand crisis worse, but local conditions can make the affordability crisis better or worse. If you live in a city or neighborhood that is attracting population, you have seen rents rise. Just a year ago, Cambridge and Zanesville were experiencing a steep rise in rents as gas and oil workers descended on Guernsey County's oil patch. This year each of the major metro areas is seeing an increase in both Millennials (young people born after 1990)  and retiring Baby Boomers (the so called "empty nesters").
    On the East and West Coasts and in Chicago, the rental squeeze has reached emergency proportions with cities acting to address both homelessness and affordability in very public ways. In Portland and in Los Angeles, for example, city officials have declared states of emergency for both homelessness and rental affordability and dedicated new funding for homeless programs and for protecting and expanding affordable housing. To promote stability, renters in Portland sought and won a moratorium on "no cause evictions." The Community Alliance of Tenants had originally asked for a year long moratorium in order to stop involuntary displacement and a 12 month notice of rent increases in order to give renters time to plan their futures. In both cities, politicians have "found" the money to address the problem of homelessness and affordability. What about in Ohio? Here's three no cost, short term policies that might help slow the pace of displacement (ie. forced moves). 
  • Moratorium on "no cause" eviction. Taking away a landlord's right to say "if you don't like it, move" would slow displacement. In Ohio, a landlord can terminate a month to month rental agreement with a 30 days notice or refuse to renew a lease for "no cause." A moratorium that requires a 90 days notice to terminate would give landlords and tenants time to work out their problems or to plan a transition. 
  • One year notice of rent increases. Giving tenants a year to negotiate or plan an orderly transition would ease the burdens of having to move in the middle of a school year or make a choice to move to homeownership. 
  • Shift public funds to short term rental assistance. Right now most Ohio cities and counties are subsidizing home repairs for low income owners. Important work, but not a crisis. Shifting those public funds (primarily HOME and CDBG) to short term rental subsidies could help prevent eviction and displacement for families facing a temporary housing crisis. 
    Why would city or county officials go to bat for rental stability? One good reason is the maintenance of stable neighborhoods and a stable workforce. Churning in rental communities contributes to overcrowding leading to blight, school and work absentee-ism, and crime. There is some reason to believe that local elected officials are ready to be lobbied for tenant protections. In a recent poll of mayors by the website Politico, the second most important issue identified by the Mayors was "affordable housing. From the article: "As Providence Mayor Jorge Elorza said, 'In the wake of the collapse of the housing market, many urban centers are facing a need to rehabilitate significant numbers of vacant and abandoned properties that pose health and safety threats in their communities. Presidential candidates should commit to making a significant new investment to support the revitalization of these properties to create affordable housing and mixed use developments to create strong and vibrant neighborhoods.' ” Another (not so direct) benefit to local leaders would be to tamp down the kind of real estate speculation that can lead to a "boom and bust" that puts housing stock and the local economy at risk. 
    An effort in Columbus by Affordable Housing Alliance of Central Ohio is focused on engaging civic and business leaders to fill the gap in affordable housing in the region.  But these non profit developers alone can't bridge the affordability gap. The moving force behind rental housing affordability must include tenants organizations and their advocacy allies. 
    Here's where Ohio is almost completely lacking. The few tenant based groups do exist are struggling to stay afloat and focused on rental rights information or emergency assistance, but not on political action. Without independent tenant voices demanding change, even modest short term efforts will fail. Media can help too but working with local news outlets to highlight the problems facing low and fixed income renters requires the engagement of low and fixed income renters. RobP from Portland reminded RHINO just this week that when things get bad enough, tenants will speak up. What should be clear to all is that more of the same won't change the overall dynamic of rental affordability. Does Ohio have to wait til affordability is a crisis? 

Coping with rent increases: Part 2 of RHINO's series on rental affordability focuses on things renters can do now to reduce the strain of increasing rents. 
  Too many tenants think of rent as "take it or leave it," but remember that a landlord with a vacant unit isn't making any money, while he/she continues to pay taxes,  mortgage payments, and utility bills.    A great place to start thinking about negotiation is a story at GO Bank Rates. "Negotiating Rent: Three Steps for Success."The three keys are: 
  • know the rental market, 
  • sell your value as a tenant, and 
  • be both flexible and assertive. 
Once you understand negotiating, here's some ideas that might work. 
    Offer to make repairs and improvements. Being able to paint, caulk, and repair your apartment could turn into reduced rent or a rent credit. Sweeping the stairwell and taking out the garbage could be other chores that the landlord would otherwise have to pay for. Keep in mind that the landlord cannot require you to make repairs or provide services that are landlord duties as a part of a rental agreement. That's a violation of the landlord tenant law! (Ohio Revised Code 5321.13 a). On the other hand you could make a contract for work to be completed in exchange for rent concessions or credits. Whatever separate agreement you create, put it in writing and make it clear. Example: "Tenant will paint the livingroom in by March 31st. Landlord will supply the paint. Tenant will supply the tools. When completed, landlord will deduct $100 from the next rent payment." 
    Making energy savings repairs and improvements is a double benefit. By caulking, weatherstripping and covering leaky windows, and energy saving light bulbs, you can increase your comfort level and reduce the landlord's utility bills. Reducing water and electric consumption saves the landlord's money. Tenants can install low flow fixtures and negotiate shared savings. For example. look at the water bills over the last few months, and then make an agreement to have a 10% reduction per month in exchange for a comparable credit off the rent for your savings efforts. See here for more ideas. 
    If you are paying your own utilities, the savings are more direct. Reducing energy consumption reduces your utility bills.  Inexpensive improvement like a set back thermostats and other low cost energy savings tools pay your back in lower bills. You can also negotiate for EnergyStar appliances or weatherization investments by your landlord that will save you money and increase the value of the landlord's rental property.
    Taking in a "boarder" is a time honored tradition in the US. A "boarder", as in boarding house, is someone who rents from you. In legal terms, you are "subletting" a portion of your space to another person. The boarder pays rent to you, you pay rent to the landlord. Unless subletting is prohibited by your lease agreement, it is legal. Keep in mind that you will take on all the landlord duties with regard to your boarder and you will have to account from payments from the boarder as income.  More on subletting here
    Or find a roommate! In contrast to a boarder, a roommate is someone who shares your space and costs. Instead of a subletting situation, each of you pays a fixed rent to the owner landlord. One roommate situation is where each roommate has a rental agreement. In that situation, you are not responsible for your roommate's non payment or rules violation. The potential downside of a co-tenant arrangement is that the landlord could bring in another co-tenant without your agreement. A more common form of roommates occurs when all the roommates are under one rental agreement. If one roommate "skips" the remaining roommates are fully responsible for the lost rent. If one roommate is delinquent landlord may evict all the roommates. If you are thinking about roommates, here's a sample Roommate Agreement from Ohio University. 
UPDATE: CityLab has a story of "stealth dorms." This is the practice of recreating dorm-like rental housing to enhance companionship and affordability. Municipalities are reacting against it with unrelated individual ordinances.  Takeaway: check your local municipality for occupancy codes that regulate roommates.
    Or you could find savings elsewhere. No one wants to hear the words "cut back" but there are some simple ways to reduce your consumption to cover increased housing costs. Here's the trick-the piggybank. When you skip that latte at Starbucks, put that amount of money in the piggybank for the next rent due date. Small daily savings of $5 from Monday through Friday can result in an extra $110/month...as long as you don't spend the savings elsewhere. One great place to look for savings is telecommunications. New cell phone services that rely on WiFi connections can reduce your monthly bills dramatically...even if you have to pay up front for a phone. But remember, you must save the savings. More ideas here.
    Finally, don't fall behind in rent. Piling up late charges, losing your home to eviction, getting stuck with court judgements for unpaid rent, and blemishing your credit record are all potential consequences. Pay your rent first, you can find other ways find food, transportation and medicine. What are your ideas about coping with high rent? Send them to communitymanager@rhinohhio.com

Part 3: Policies to promote stability and affordability
    Last week RHINO addressed things that tenants could do to cope with the rising cost of rent. This week we learned that rent is rising faster for lower income households than it is for upper income families. That's because developers have put all their money into building "luxury" apartments instead of affordable units, according to a study by the New York Federal Reserve Bank. Keep in mind that Federal housing programs that offer affordable rents reach only about 25% of eligible households. 

 Are you rent burdened? Rent-burden has a very direct impact on renters as it affects their ability to save for the future. This calculator from the Urban Institute shows whether you're rent-burdened and reveals the percentage of people in your neighborhood who pay more rent than they can really afford.Use the calculator! 

That leaves a lot of low/moderate income households with a rent burden. In 2013, the US Census estimated that 685,279 rental households in Ohio were paying more than 30% of income for rent. That was over 50% of all rental households in Ohio. This week RHINO looks at what state and local governments can do to offset rising rents for the low and moderate income renters. 

Step 1: increase rent assistance. A boatload of new studies show that rental assistance is the best way to prevent homelessness. Trouble is there's not enough subsidy to go around. Center for Budget and Policy Priorities estimates that only 25% of eligible households receive Federal rental subsidies. So what can be done? 
  • At the National level, the goal should be full funding for housing assistance programs. The recently passed bi partisan budget bill offers hope that tenants will be spared the "sequestration cuts" adopted by House and Senate majorities. Still... "Because of funding limitations, only one out of four low-income renter households receives federal rental assistance, and the number of unassisted renter households with 'worst case' housing needs rose by more than 30 percent between 2007 and 2013. " More here. Changing this level of support will require a radical change -- making rental subsidies a Federal entitlement, like affordable health care. Instead of lots of small housing programs for seniors, people with disabilities, veterans, family's reunification...just make a universal voucher, based on income, for every household. 
  • At the state and local levels, governments could create programs to help renters using HOME and CDBG funds that flow from the Federal government. Traditionally these dollars have gone to assist first time homebuyers or to help low income seniors make neeeded home repairs. Given the severity of the rental affordability crunch, maybe it's time to change priorities. One idea would be to give landlords low/no interest loans to make improvements to bring rental homes into compliance with local code requirements or to install energy savings improvements. How would this benefit renters? Landlords would be required to freeze the rent at an affordable level and adopt a "just cause" termination so that tenants can't be forced out. Another state/local program could be one year rental assistance for households at risk of displacement by rising rents or financial crises like loss of employment or high medical expenses.
Step 2: increase minimum wage. National Low Income Housing Coalition calculates that a household would need to make $14.13/hour to afford a two bedroom apartment in Ohio in 2015. That's a lot like the $15/hour minimum wage that some elected officials are promoting. Right now the current $8.10/hour state minimum wage means that two full time incomes are needed to rent a two bedroom apartment in Ohio. Even the proposed ballot initiative of a gradual rise to $12/hour, while helpful, would not be enough to afford basic "non luxury" housing. Local governments, following the lead of Seattle, could raise their minimum wages without waiting for a state initiative that only goes part way to the solution. 
    Next week, RHINO will look at ways that communities can promote the production of affordable housing. Remember that increasing supply to meet the real demand should lower rents over time. What's clear for now is that tenants and advocates need to get organized to address rental housing needs or face another decade of rising rent burdens "The report, by Harvard University’s Joint Center for Housing Studies and Enterprise Community Partners Inc, projects a growing renter affordability crisis, with the largest increases expected among older adults, Hispanics and single-person households. The findings suggest that even if trends in incomes and rents turn more favorable, a variety of demographic forces—including the rapid growth of minority and senior populations—will exert continued upward pressure on the number of severely cost-burdened renters." 
 
Part 4: Reducing rent by increasing the supply of affordable housing
    According to the law of supply and demand, creating or preserving affordable units should reduce the upward pressure on rents. Dr. Susan Wachter, professor of real estate at the Wharton School, explains: “ 'What we’ve seen since 2004 is no increase in homeowners...whereas the number of renters has increased by the millions. The lower the income level, the harder it’s become to own a home, the more people opt for renting." .
    What do we mean by "affordable"? Think of two levels of affordability.
Level 1. Rent subsidized units like HUD, USDA, and public housing have a subsidy that makes up the difference between 30% of the household's ability to pay and the "market rate" for a comparable unit in the community. Rent subsidized units typically have strict income guidelines and long waiting lists.
Level 2. Affordable, but not rent subsidized include units that are affordable to a low/moderate income household from minimum wage workers to middle income working families. Typically this type of housing is affordable for households that are 30-60% of the Area Median Income (AMI). Often these affordable homes with no rent subsidy have an incentive to the owner that reduces the cost of financing, development or construction. Examples would be Low Income Housing Tax Credits, HOME assisted developments, or tax abatements. Typically, state or local governments give these "hidden" subsidies in exchange for rent caps and "just cause" protections for tenants.
    This year, cities across the US are experimenting with ways to make more affordable units. Here's some examples 
  • Linking affordable and luxury development. In "hot" housing markets, cities are requiring developers to create affordable units or pay into an affordable housing trust fund when they seek permission to develop luxury rental housing. Right now, Chicago landlords are challenging the expansion of Chicago's affordable housing law. Linkage makes sense in places where developers want to create luxury apartments. In Ohio that could include Columbus and other Metro areas, but also smaller university communities.
  • Investing local funds in lowering development costs. Many cities and some states are using their own funds to reduce the costs of development in exchange for agreements that control rent levels for a fixed period. Using HOME or CDBG dollars to reduce the costs of land or construction could help an owner reduce his rent levels. In Pennsylvania, the State Housing Trust fund has just expanded housing development assistance state wide. The fund uses taxes on gas/oil development to support developers who are building affordable units. In Columbus the Affordable Housing Alliance of Central Ohio is working to encourage business and industry to invest in affordable housing. 
  • Using Municipal Land Banks can help lower development costs. Municipal land banks were created in Ohio in the aftermath of the Great Recession, to "capture" foreclosed properties. Many land banks are simply vehicles to demolish unusable single family homes, but some have become development agencies helping local non profits with acquisition and financing. In Cuyahoga County, for an example, the Land Trust has teamed with a health care agency to create new healthy affordable housing for veterans. More info on Ohio Landbanks here. 
  • Preserving affordable housing. The foreclosure crisis continues for owners of "underwater" properties. Helping homeowners stay in their homes makes sense because otherwise they will become renters and increase the demand for affordable units. At the same time, many people are living in homes that are "real estate owned" (REO). Sooner or later the financial institutions that own these houses will want to sell off at a market rate, especially in areas where home prices are on the rebound. Across the country, there's a movement to get Fannie Mae (Federal National Mortgage Association, a government owned entity) to sell these REO houses to local non profits at a discount so that the homes can be rehabbed and sold or rented to the current occupants. Fannie Mae is making small steps in that direction. This past month, Fannie announced that local non profits would get a "right of first refusal" but would still have to pay market value for these units. Still, the pressure from lawmakers and community based organizations continues. 
  • Mobilizing to use the National Housing Trust Fund (NHTF) to develop affordable units.This spring, the Ohio Housing Finance Agency will be seeking comments on how to use the NTHF dollars that will be coming to Ohio. NTHF will provide up to $3M to support the development of housing for low and very-low income households in Ohio. Citizens will be invited to offer suggestions. More on NHTF here
  • Creating alternative forms of rental housing. All across the country, local groups are using tools like cooperative ownership, shared equity and land trusts to reduce development (and sometimes operating costs) and cooperative real estate investment
None of these steps is a "silver bullet" to reduce rent inflation, but unless some of these steps begin, rent inflation has no end in sight, according to the Joint Center for Housing Studies and the Enterprise Community Partners. "In our baseline scenario (where both rents and incomes grow in line with inflation, set at 2 percent), we find that demographic trends alone would raise the number of severely burdened renter households by 11 percent to 13.1 million." Next week, rhinoUP will wrap up this month of stories on affordability by looking at citizen efforts to get local and state governments to pay attention to the affordability crisis in rental housing.

Part 5: Mobilizing for Affordability 
    In the late 1980's, an informal group homeless advocates were frustrated with the lack of state support for homeless shelters and affordable housing. It was the height of the homeless crisis of the 1980's Inspired by Mary Brooks at the Center for Community Change, the informal group wondered if a State Housing Trust Fund could be the answer. Through their networking with more experienced advocates and housing experts, they discover that Ohio's efforts to support housing were limited because housing was not a "public purpose" as defined in the State Constitution. The low income housing tax credit program had just been authorized by the US Congress, but the fledgling Housing Finance Agency, then a department of the Ohio Department of Development (ODOD, now ODSA) was limited to spending money on homeownership programs, thanks to a "carve out" promoted by the homebuilder industry and former Governor Rhodes. Bill Faith recalls getting in touch with Cindy Flaherty at ODOD to carry a message to then Governor Richard Celeste. Governor Celeste, contemplating a race for the Democratic Presidential nomination in 1988 was interested in supporting a bold housing initiative.   He. appointed a "blue ribbon" committee to study the problem and make a report with action steps. The report, "Affordable homes--within our reach: report of Governor Richard F. Celeste's Commission on Housing" was released in 1989 and called for the adoption of a Constitutional amendment and the formation of a State Housing Trust Fund.  With support from outgoing Governor Celeste and incoming Governor George V. Voinovich, the Ohio General Assembly put the proposed Constitutional Amendment on the ballot in 1990. State Issue 1: Making Housing a Public Purpose in Ohio. With little organized opposition and broad grassroots support through a network of community based organizations, the issue passed and the foundation was laid for the Ohio Housing Trust Fund. 
    Because 25 years have elapsed, many housing advocates have only fuzzy recollections of this decisive campaign for housing rights. Because there's been scant historical documentation of the campaign, today's advocates can't even google good source materials. No wonder there's an air of mystery when it comes to thinking about social change campaigning. Social practitioners (leaders, advocates, and social providers) often think of "politics" as chance and luck...not the result of a rational practice. That "magical thinking" about social change could be why social practitioners are still waiting for leaders and wishing for issues to emerge, instead of becoming leaders. Today's rental affordability crisis is a great time to re learn the lessons of an earlier campaign. 
Step 1: Preparation 
    Social change begins with a core group of active advocates--folks who are WORKING on the issue with and for the victims. In the State Issue 1 campaign of 1990 a small group of people (direct service) who were working on the problem of homelessness reached beyond blankets and bunks to learn more systemic options. Many were "advo-crats" (social system employees who were nevertheless "friends of the homeless," neither bureaucrats nor policy wonks. This personal commitment made them the "core group" that was necessary before "experts" could be brought into the discussion. 
    The core group needs to understand the system they are trying to change. One 1990 campaigner points out the critical role of the media in framing the issue. This was the era when homelessness exploded on the pages of daily newspapers. Their focus on the issue sensitized communities to the need to do something. 
   Seeking some consensus is critical at this phase. For State Issue 1, the Governor's Commission provided a forum for Interested parties to identify their interests and reservations about possible courses of action. Even when consensus is not possible, the opponents have been consulted and their arguments analyzed. The recent marijuana intitiative seems like maybe it skipped this step, relying on "investors" and assuming that long term advocates of legalization would come along for the ride. 
Step 2: Organize for a change. 
    Up to this point the informal core group has been preparing for a change action, but as the issue grows a more formal organization is needed. For state issue 1 the campaign coaltion included a mixture of advocates, housing providers and real estate interests and social service providers. Not everyone contributed equally, but each was "in the tent" when it came to decision making and operations of the campaign. 
    One key element of the organizing phase is to agree upon a clear simple message like "Make Housing a Public Purpose." Bill Faith recalls that the Issue one coaltion decided to limit the scope of the initiative to amending the Constitution without adding a lot of details about the structure of a Trust Fund or the possible funding sources. Keeping a simple message is also critical to obtain "big name" endorsements. In the case of State Issue 1 both Governor Celeste and soon to be Governor Voinovich endorsed the ballot measure. 
Step 3: Mobilize mass action 
    Creating an action campaign means enlising individuals and organizations to carry to message to their members and the general public. A key aspect of the campaign model is consistency and predictability so that each campaigner is "on message." Faith recalls that leaders were only partially successful at this task in State Issue 1 in 1990. Many organizations with money did not contribute for stickers, banners or handouts. Other groups which "found" money ran parallel campaigns outside the control of leadership. Luckily a little chaos was not a critical problem since everyone stayed "on message". 
    Mass media outlets were really important in the 1990 campaign, but because there was not a lot of money for advertising, most media hits were "earned" by the campaign staging activities that encouraged media coverage. This is a really important lesson. In the early stages of issue development, investigative journalism can play a key role in defining the issue, but in a campaign phase, advoctes generate media coverage.
Step 4: Seize and freeze the victory. 
    At the point that State Issue One was adopted by voters in 1990 the campaign shifted from mass mobilization to legislative lobbying as the General Assembly was tasked by the voters to pass "enabling" legislation. Slowly the informal core group which became the campaign leadership organization morphed into what was to become the Coaltion on Homelessess and Housing in Ohio. (COHHIO). Continuously since then the Coalition on Homelessness, later becoming COHHIO, has been the primary advocate for winning a dedicated revenue source for housing and resisting efforts to restrict or defund the Ohio Housing Trust Fund. 
    These steps fit nicely into the "Force Field Analysis" of systems change. ( https://en.wikipedia.org/wiki/Force-field_analysis ) In Kurt Lewin's model, systems change results from a three step process: unfreezing the current situation, pushing for change, and then re-freeze the system in a new reality. Lewin is famous for observing that "there's nothing more practical than a good theory," but maybe not so famous for an equally important observation "If you want to learn how something works, try to change it." 
    One can almost hear today's advocates saying "Oh, well...times have changed," but wait! Just this year, housing advocates in Pennsylvania won some significant victories in their efforts to create a state wide housing trust fund. Their victory came in the midst of a standoff between a liberal Governor and a majority Republican General Assembly. The campaign of the Alliance for Housing in Pennsylvania was built on taking a smaller program and enlarging it's scope based on the rental affordability crisis in that state. 
    How does all this apply to addressing housing affordability in Ohio? By challenging advocates to seize their legacy of activism and become the leaders they have been waiting for. What is your goal? Rent control, more spending on affordable housing locally? A local housing trust fund? This rhino!UP series has focused on a number of different approaches to the problem of rental affordability. For starters, advocates should pick one solution and identify a "system" that seems amenable to change. The system. Options include a mix and match of:
  • local, state or Federal,
  • legislative, administrative, judicial or electoral,
  • public, private or non profit sector.
The scope of your action is kind of dictated by the size of your "core group." Good organizers will design roles for all the advocates (advo-crats, grassroots leaders, and "professional advocates). Build a network or coalition. tell the story--document the situation in human terms in order to engage mass participation. The critical first step is to stop waiting for someone else and become the magnet that pulls together a core group of advocates to start mobilizing. 
    How have things changed since 1990? Hard to measure the impacts of mass media, social media, and social network analysis, which has supplanted Lewin's social system paradigm. In NonprofitQuarterly, authors Mark Leach and Laurie Mazur take a look at "movement networks" a new form of campaign organization which buildings on older theories of social movements (occasional uprisings of mass participation) and social change coalitions. "Yet while movement networks offer extraordinary leverage, they also present outsized challenges. With fluid boundaries of structure and membership, movement networks (and the organizations that comprise them) require new approaches to management and leadership—approaches that are different from those employed by traditional nonprofit organizations and short-term, issue-based coalitions." In its quiet moments, that's what RHINO strives to be.





 Notes & Links 

Part 1: Self help

Part 2: Coping with rent increases

Part 3: Policies to promote affordability
Alameda Tenants in confrontation with police

Part 4: Increasing the Supply of Affordable Rental Housing

Part 5: Building and supporting a Tenants movement for affordable houisng



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