Affordable Housing: Challenges & Opportunities


by Beth McKee-Huger
July 9, 2018

Where one lives impacts everything else:
Housing affects one’s health, access to employment, type of transportation needed, school district, economic stability, and voting district.  Greensboro has a “persistent shortage of safe affordable housing” that limits the housing options and life opportunities of many in our community.

Problems:
Gap between incomes and rent levels:

  • Roughly half of Greensboro residents are tenants and more than half of the tenants pay more than 30% of their income for rent, leaving little for food, transportation, child care, medicine, and other necessities.
  • This trend in Greensboro is getting worse, as rents rise and wages are not improving, contributing to the seventh highest eviction rate in the country when tenants can’t pay the rent. Not only do families suffer disruption through eviction, but the community as a whole is impacted by students moving schools and the frequent turnover in neighborhoods.
  • The waiting lists for subsidized housing are years long because there are only enough federally-funded subsidies for 25% of qualified households, leaving 75% to struggle; the waiting list only moves when someone loses a voucher or public housing unit or finally gets the income to move out.

Connection between affordable housing shortage and substandard conditions:

  • Owners of low rent units do minimal maintenance because they know that if anyone is dissatisfied about no response to repair requests, there are dozens of other households ready to rent the houses and apartments.
  • Tenants are reluctant to complain about unsafe conditions because they have few other options for housing and they fear the landlord will retaliate or the city will condemn.

Connection between substandard housing and illnesses or injuries that send people to the hospital.

  • Asthma is exacerbated by moldy conditions (due to water leaks and drainage problems) and pests (due to water leaks and holes in walls and floors).
  • Broken rails and steps can cause falls and broken bones.
  • Excessive heat (no ventilation or cooling system) and excessive cold (inadequate heating and insulation, gaps around windows and doors) can have serious health consequences.
  • Dust from deteriorating lead paint (peeling, chipping) can cause lifelong cognitive and behavioral problems for young children.

Reasons for shortage of safe affordable housing:

  • The cost of building low rent housing is not much less than building luxury housing (other than location and size and amenities) and owners need to charge rents high enough to pay those costs, so they can’t “make the numbers work” building affordable housing.
  • Also, zoning requirements discourage development of affordable housing and developers face opposition from many neighborhoods unwilling to change zoning.
  • Existing affordable housing deteriorates if owners do not reinvest in maintenance and finally when the housing becomes uninhabitable, it is condemned—to be demolished to build luxury if the location is gentrifying or to endanger surrounding properties if the location is declining.
  • While many rental units are two bedroom, a growing number of households are one person and cannot afford the additional space. Of course, large extended families need more than two bedrooms and have difficulty finding affordable units.

Background on policies and plans:
Code enforcement:

  • State law (GS 42) requires rental properties to be kept in safe condition and city ordinance (Chapter 11) enforces minimum standards through code inspectors.
  • State legislation prohibits proactive inspections (like the RUCO ordinance in effect 2003-2011) but allows inspections when the occupant complains, 5 other people familiar with the property sign petitions, police or fire fighters refer, or the inspector notices code violations from the street.
  • After an inspector inspects and cites violations, the owner gets a notice of hearing to discuss the matter before an Order to Repair is issued for 30 days. If the owner does not bring it back up to standard condition before the order expires, the inspector reinspects and condemns the unit, ordering it vacated, charging civil penalties, and referring it to the Minimum Housing Commission. The commissioners—appointed by city council—decide whether to order repair or demolition in 90 days; at that point, the city can repair and place a first position lien on the property (ahead of mortgage and other liens).
  • The code compliance manager in place since 2013 has expertise in healthy homes and a strong inspection staff but they are spread too thin to handle repeated re-inspections of all the complaints they are handling now.

Housing and land use policies:

  • Greensboro is developing a plan for Housing Our Community to promote broad collaboration, policy changes, and substantial philanthropic support for affordable housing leveraging housing bonds and other public funds and private investment.
  • The city’s use of federal housing dollars is defined in the Five Year Consolidated Plan, which will be reworked in 2019; the Annual Plan was approved by city council on June 19. The five year plan is an opportunity to provide input to the city about community priorities for bonds and city tax dollars as well as the federal funds, while the annual plan and report show whether the city is spending the dollars consistent with the five year plan or not.
  • Zoning and occupancy policies are defined in the Comprehensive Plan, which is done much less frequently but the city Planning Department is starting to talk about input in the next update. Right now, most zoning for single family residential does not allow additional housing units, such as basement or attic apartments or garage apartments that could provide affordable housing for single persons or small families in stable neighborhoods. Access to water and sewer services are also defined in the Comprehensive Plan and important to affordable housing developers who find less expensive land outside of the city limits.

Evictions:

  • Rental owners file Summary Ejectment paperwork in Small Claims Court (Magistrate’s Court) stating the reason for eviction and the amount the tenant owes. A notice is delivered to the tenant with the date and time of the hearing, usually by a sheriff deputy; sometimes this is handed to the tenant or whoever is at the house or is stuck to the door, although it sometimes gets lost before the actual tenant receives it. Tenants often do not go to the hearing because they are intimidated (some owners specifically tell tenants “you don’t have to go to court”) or have to work or are sick, but the owner automatically wins uncontested cases.
  • Tenants can document the housing conditions to the Magistrate who can award damages to the tenant, abating the difference between the rent paid and the value of the rental in its current condition so that the owner must pay the tenant or allow free rent for a specified period.

Recommendations for community engagement:
Code enforcement and evictions: Educate tenants about their rights to safe housing conditions (including how to make a code complaint and how to document housing conditions in Small Claims Court), petition for inspections, and advocate for more code inspectors and Legal Aid attorneys. Attend court to observe the process.

Policy, priorities, zoning: Get involved with the planning processes for Housing Our Community, the Consolidated Plan for Housing and the Comprehensive Plan to advocate for policies and investment that promote housing affordable to the lowest income levels.

Public awareness: Educate the general public about the positive community impact of affordable housing: more stability, fewer school moves and hospital visits, stronger economy, less homelessness. Speak up for welcoming development of affordable housing in the neighborhood rather than opposing zoning changes.

Community organizing: Support investment that revitalizes neighborhoods while minimizing displacement of residents. Build the capacity of community residents to speak up for themselves about what they want—and don’t want—in their neighborhoods, in order to balance between the two risks of gentrification and disinvestment.

Community service: Volunteer to help repair homes and to build new ones.

History of RUCO:

In December 2002, Greensboro Housing Coalition presented a map of substandard housing conditions to City Council, compiling the door-to-door assessments that Willena Cannon’s team had done and code enforcement cases. Council told Butch Simmons, director of Engineering & Inspections, to propose a new ordinance to address these problems. He designed RUCO (“Rental Unit Certificate of Occupancy”) to require inspection and certification of all rental units. GHC and Greensboro Neighborhood Congress advocated for City Council to adopt this in spring 2003, while Piedmont Triad Apartment Association and Greensboro Landlord Association opposed it.  It passed overwhelmingly but landlord groups immediately undermined it. The stated plan was to begin at the center of the city to identify and inspect rental properties and then fan out to the surrounding areas but that soon changed to landlords requesting inspections whenever they were ready in the next five years. Some of the rental properties passed the initial inspection, some had to be re-inspected before passing the second time, and some continued to be below standard. The positive result of this ordinance was that tenants did not have to complain to get an inspection and some owners probably made repairs before calling for their RUCO inspection. The frequently-negligent landlords enjoyed being treated the same as the “best” landlords. However, with no penalties for delaying inspections and no clear way of identifying which housing units were rental and needed certification, many did not get inspected. GHC frequently had to remind the inspections department of the importance of implementing RUCO and to defend RUCO to the public.

In 2008, after the five-year phase-in, there was no clear plan to begin enforcement. The penalty in the ordinance was a daily fee for renting a unit that did not have a RUCO and a RUCO board was established to hear appeals from landlords who objected to the fees. Mike Barber was the chair, as city council liaison to the board, and most members represented landlords, so everyone who appealed had their fees dropped. Willena was on the board but usually not informed of meetings and ignored when she attended. The Piedmont Triad Apartment Association and its statewide group Apartment Association of North Carolina went to the legislature in 2009 to get a bill passed that would prohibit proactive inspections (i.e. without a specific indication of violations). It almost passed but Senator Katie Dorsett proposed an amendment that resulted in no decision by the end of the legislative session.  Landlord groups continued to avoid penalties and in 2011, re-introduced the state legislation, which passed with no objection from Greensboro City Council and Mayor Bill Knight.

Greensboro then moved inspections to the Planning Department and set up another committee with majority landlord representation to consider what to do next.  Finally, ordinance changes were proposed that would allow inspections only when there was a resident complaint, a petition, or “inspector initiative” when the inspector could see multiple exterior violations; non-compliance with repair orders would be penalized.

In 2013, the city again called in stakeholders (GHC and landlords, including Irene Agapion) to discuss what to do since the non-compliant landlords were not paying the penalties; ARCO owed the city around $500,000. Finally, TREBIC and other representatives of landlords realized that they needed to support code enforcement against the most egregious rental problems, rather than saying that any enforcement was a slippery slope to hurting the best landlords. New changes to the ordinance were proposed making the penalties collectible as personal debts and authorizing the city to pay contractors to correct code violations and place a first-position lien on the property (to be paid before mortgage or other liens). This was adopted by city council. The city also moved inspections to the Neighborhood Development department and chose Beth Benton to manage inspections; she has a long history with healthy homes and quality work.

Code enforcement staffing:

During the 18 years that I have been dealing with code enforcement, there has been a positive shift in staffing competence and commitment to public safety. Local Ordinance Enforcement staff in 2000 were not focused on compliance but continually inspected the same units without getting violations corrected. They were surprised when I pointed out that in their own reports there was only 10% compliance. Danny Nall expressed concern that landlords were at a disadvantage when tenants complained. When I called code supervisors that landlords had moved tenants into condemned units, they backdated the final inspections to “uncondemn” the units as of the dates I said the tenants moved. When I was chair of the Minimum Housing Commission voting to demolish condemned units, code staff took no steps to actually demolish properties, so one landlord told me the Commission was a joke. After years of advocates pushing for equitable and prompt enforcement, gradually inspectors and supervisors were moved to other positions and replaced by inspectors with more dedication to fair and thorough inspections and follow-ups. Beth Benton as manager of this division and Mark Wayman as supervisor are a vast improvement, committed to understanding and addressing the conditions that endanger health and safety, rather than checking boxes on a list.

Beth Benton has provided investors with list of properties that have been ordered repaired or demolished; investors contact the property owners and negotiate sales, where possible, so 152 properties have been purchased and rehabilitated in the past 4 ½ years. This moves them from non-compliant ownership to responsible ownership.

At this point 98% of code violation cases eventually come into compliance with minimum safety standards. The remaining 2% are often heir property where heirs don’t have the capacity to repair or multiple heirs can’t agree on who is to take responsibility.  The process for getting housing up to minimum standard is often very slow and, without a change in ownership or maintenance, conditions often slide back down below standard.

Small claims court (Magistrate’s Court):

Magistrates are under the supervision of the Chief Justice of District Court. Some are much more attentive than others.  Landlords are in court much more often than tenants, especially since tenants may not come to court and some rental owners file multiple evictions every month, so the magistrates become familiar with them. With dozens of cases every session, magistrates quickly rule in uncontested cases, but they need to slow down and listen when tenants come ready to present clear evidence. I haven’t had recent experience with court to compare overall trends over the years.