Letter to Legislature Ahead of Session: Be Efficient, Listen to Housing Providers

December 3, 2020

Dear Legislator, 

These are difficult and challenging times. Federal, state, and local government have implemented measures to prevent the spread of Covid-19 that have meant job and income loss. This income loss has created housing insecurity. Eviction bans do nothing to ameliorate this. On the contrary, eviction bans have encouraged some concerned people to hold back on rent payments even when they can pay. And for those who have lost income, the ban does not pay their growing balance of unpaid rent. When you consider what to do please consider the following principles. 

• People who have lost income need fast, efficient rent relief, not defenses from eviction actions that benefit eviction defense attorney’s win loss records; 
• Government is grossly inefficient at distributing cash benefits and any and all relief should be coordinated with non-profit credit unions like the program that has distributed millions in rent relief in Hawaii; 
• Housing providers risk their private property to create housing, they are doing a service and they are trying to help their residents; 
• When housing providers are deprived of their income, they can’t pay property taxes, mortgages, and are forced to lay off employees; and 
• It’s time to listen to people who actually provide housing and experts in real estate not government sponsored eviction attorneys or lobbyists.  

I understand the people enter politics, often, with high ideals. Just as often they run for office for approbation. However, we have to say that the Governor and the Legislature have failed the people of this state. While the Governor has turned the state’s economy off and on like a child playing with a light switch, real people and families are suffering. Surprisingly, most are paying rent. We’d urge you to look at real data (see attached) for the scope of the problem not breathless data from the Commerce Department about back rent. 

Please take a look at the recommendations from The Center for Housing Economics a project we began to respond to deeply flawed housing data motivating equally flawed housing policy. Please talk to real housing providers not lobbyists who claim to represent them or their tenants. We are here to help facilitate that as session approaches. 

Sincerely, 
Roger Valdez
Director 
Seattle For Growth

Governor Inslee: Where is the Rent Relief?

Our comments on the latest Covid-19 interventions announced by Governor Inslee.

November 15, 2020

In a press conference yesterday Governor Jay Inslee announced a new set of interventions intended to stop the spread of Covid-19 — these measures will also disrupt the economy and create job and income loss. 

Since March, the Governor has done little to help people impacted by his orders who can’t pay their rent. Eviction bans don’t put money in people’s bank accounts to cover their housing expenses and the Governor’s $100 million in rent relief is not accessible to many residents or housing providers.The Governor failed to say how much of that money has been allocated; he said he “intends” to get it out. 

The Governor’s intentions won’t pay the rent. 

Here is what Washington needs now, 

• Immediate cash assistance to anyone who has not been able to pay rent because of job loss related to Covid-19;
• Housing providers should be able to apply for this assistance on behalf of their residents; 
• The Governor should use his influence not to seek a cabinet position but rental assistance for past rent and future rent for his actions this weeks; and
• No claims for assistance should be denied or held up by the bureaucrats in Olympia: Just pay the rent! 

Where’s the relief? 

For too long the Governor has ignored the real problems of the housing impacts of his Covid-19 orders, papering them over with eviction bans. Meanwhile unpaid rent is becoming a burden that will devastate families, businesses, and lead to more job loss and unpaid property taxes. 

It’s time to engage with housing providers and develop an efficient solution and advocate for more help from Washington DC!

Senator Kuderer: Misinformed or Dishonest?

State Senator Patty Kuderer is the Chair of the Senate’s housing committee. She is a personal injury attorney as a profession. Over the years she’s held lots of “stakeholder” sessions in Olympia about eviction bans. Eviction lawyers tend to do very well after her sessions are finished.

We know what happens in housing stakeholder sessions in Olympia. Lobbyists go through the motions but the outcome is already determined. When legislation is passed politicians and eviction defense attorneys can say, “We included landlords in the process!” Worse, as Senator Kuderer did in 2019, they’ll change the rules, mandating a 14 day pay or vacate period for example, then call housing providers “shameful” for following the rules she wrote. 

The 14-day pay-or-vacate legislation, according Kuderer, was negotiated in “good faith” between lawmakers, tenant advocates and representatives for landlords and property management companies.

To see it used like this, Kuderer tells The News Tribune, is “shameful.”

“Technically, it doesn’t violate the law, but it certainly violated the spirit of the law and violated the goals we had discussed during many, many hours of discussions and negotiations,” Kuderer says. 

From the Tacoma News Tribune

Kuderer is either misinformed about her own proposals and what’s really going on with housing in the state or she’s not being honest. Maybe it’s a little of both. As I’ve pointed out, politicians have what I call a Sally Field Syndrome. It’s not in the Diagnostic and Statistical Manual of Mental Disorders (DSM–5) but maybe it will make the version 6. Wanting to be liked sometimes trumps common sense.

Kuderer was back at it again this week, claiming having no evidence of elective non-payers taking advantage of reckless eviction bans.

So I wrote her a “strongly worded letter.” You can see why politicians love me. Maybe someday the lobbyists in Olympia will realize that their job isn’t to make politicians happy, to play the “good faith” game, but to represent housing providers; sometimes that means getting up and walking away from phony stakeholder argle bargle.

—————

Hello Senator Kuderer, 

Every day I hear from housing providers who are struggling with growing unpaid rent. They don’t want to evict anyone. They want and need help for their residents who can’t pay rent and they want support in getting those who can to pay for what they are getting, a place to live. 

I think it is important to correct the record and to point out some facts. You were quoted in a Crosscut story about eviction recently. Here are the relevant paragraphs: 

There’s also the question of how much the declaration would actually accomplish. State Sen. Patty Kuderer, D-Bellevue, said she can’t rule out that there might be tenants choosing not to pay, but said no one has brought her any hard evidence.

“The real problem here is lack of resources,” she said. “So I don’t know how a declaration is going to solve the problem of a lack of resources.”

Let’s start with the evidence.

Attached you will find a study we completed and shared widely including with the Governor’s office. The Puget Sound Business Journal reported our survey (attached) We also sent you a letter earlier this year pointing out the problem with elective non-payers, people who are using the eviction ban to hold back rent even when they can pay (attached). In that letter from April 8, we said, “eviction bans have given a rational basis for hard hit families to stop paying rent to prioritize other expenses.”

Our survey found hundreds of thousands of dollars of the $22 million of unpaid rent as of May of this year, could be attributed to people who had money but weren’t paying. 

Furthermore, the story you were quoted in features just such a person. The fact is that elective non-payers (ENPs) are becoming a much larger problem as this crisis wears on. 

A smaller survey completed in May found that delinquencies were growing and that elective non-payers were becoming a larger part of the problem (see the attached)

So you are simply wrong or misinformed about the problem of people who can pay but aren’t because of the Governor’s eviction ban as well as local bans. 

You say in the story, correctly, that resources are a problem. We agree. That is why we’ve urged again and again to make the $100 million dollars set aside by the Commerce Department available to a wider group of people who need the help. 

Currently that program is limiting the use of resources and not allowing housing providers to apply for the help on behalf of their residents. Based on our survey, we think that most of the problem could be solved with that money if it was being allocated efficiently. You can read our letter asking for this which I’ve attached. 

In that letter we wrote, 

Finally, it is important to emphasize that even a small overall non-payment rate can dramatically impact people who manage and own rental property. An effective doubling of a 4 percent vacancy rate, for example, month over month, can affect loan coverage and solvency. Addressing unpaid rent now will ensure many housing providers can continue to serve their customers.

If you truly want to lead on housing issues please listen to the people who know housing the best, housing providers in the state both rural and urban. Too often you’ve chosen to listen to lawyers who defend eviction cases instead of people who own, operate, and work hard each day to provide people and families places to live. This has resulted in bad policy. Changing the eviction ban now and allocating resources effectively will help thousands of residents and housing providers. 

Now you have a lot to consider. There is a real problem of non-payers who can pay (just read the story you’re quoted in if you don’t believe all the data attached), and this problem is solvable if providers could act against those individuals. As far as unpaid rent, there is enough money now to substantially reduce that problem if the Governor’s office would change its approach. 

We’re always glad to talk with you and discuss any of these issues and we’d appreciate your support in the weeks and months ahead. 

Roger– 

November at Forbes

I have four new posts up at Forbes covering mostly rental housing issues but also homelessness and commercial rent collection. Here’s the headlines and a precis for each.

Will Private Rental Housing Survive Covid-19 Eviction Hyperbole?
The Colorado Apartment Association has been razor sharp in cutting through the fake news coming from people (mostly eviction defense attorneys) who want the world to believe that there is an “eviction tsunami” coming. This post explains why that isn’t happening and links to the Association’s presentation on why it isn’t happening in Colorado.
What Would Jesus Do? Give The Homeless Cash!
Want to drive socialists crazy? When they demand permanent eviction bans, rent forgiveness, and a take over of private rental housing because people can’t pay suggest giving families struggling to pay rent cash. You can hear the chain coming off the sprocket. The same is true when we look at homelessness. A promising study in British Columbia has found that rather than making homeless people wait for years for a subsidized apartment, giving them cash is more efficient.
Housing Providers Fail To Reverse CDC Eviction Ban In Court, Setting Bad Precedent
One of my heroes or at least a spirit animal of mine is Laocoon, the Trojan priest that warned the leadership of Troy to leave that wooden horse on the beach. His motto might well have been “dixi vobis,” or “I told you!” Legal challenges don’t work. You can read here about the failure of the legal efforts to upend the Center for Disease Control’s eviction ban.
Hawaii Rent Relief Effort Needs To Be National
The efforts in Hawaii to channel federal dollars to help offset the devastating impacts of government interventions to prevent the spread of Covid-19 have been successful; but the problem persists there and everywhere else in the country. This post covers the latest from there and the efforts to expand the survey nationwide.

Back to Basics:Where to After the Election?

Here’s a long reflective after-election post on how we might rescue some basic principles and rethink our approach to how we make policy. If we believe in a free market system for housing, we’ve got to anchor it something deeper than next quarter’s internal rates of return or whether we got a “better bill” in the state capitol or won a legal challenge. Enjoy!

There are many people who have strong feelings about Wal-Mart; and then there are people that shop at Wal-Mart. Oddly, this country is divided between those two groups. People that have thoughts about Wal-Mart think that the people who shop there are, well, generally uneducated and poor. Furthermore, Wal-Mart exploits its workers and then the government ends up subsidizing that with federal benefits. And by the way, Wal-Mart is so cheap because they get all there stuff from China. Then there is the person pushing the cart in Wal-Mart who might justifiably ask, “What the hell are you talking about?” 

It’s because of this strange cultural divide that several years ago I changed my screen background on my phone to the side of a Wal-Mart truck that I photographed while on a trip in Eastern Washington. The phrase on the side of the truck is simple and can be seen, still, all across the interstate highway system that crisscrosses the country: “Save money. Live better.” I’ve eaten at a restaurant where I’ve had a single fig carved table side, I have an advanced degree, my groceries are delivered by Whole Foods, but deep down inside, I’ll always be a Wal-Mart person. 

And no, the notion that Wal-Mart is exploitative of its workers and destructive is, as Penn and Teller so succinctly put it, bullshit.

But this rift, between the educated, latte sipping liberal looking over the top of their print edition of the New York Times and the mom with three kids, a cigarette in her mouth, and a shopping cart full of cheap stuff from Wal-Mart is at the heart of the division in this country. This is also the deep division that has riven our nation. Donald Trump, not through a diabolical ploy but by accident, stirred this inchoate tension between what I’ve illustrated with cultural stereotypes. Each side on this divide has reasons why the other is wrong; and each side has deep, primal fears of the other. 

So have we resolved this genuine and deep divide now that Trump has been dispatched? Of course not. The suspicion and dis-ease remain. The triumphalism of the left could exacerbate the tension; how that plays out remains to be seen. In many ways, as has been joked about in The Onion, Joe Biden might just be a Wal-Mart guy too. Trump was not. Across many parts of this country, especially exurban and rural communities, people are suffering. I drove a stretch of Kentucky highway called the Bluegrass Highway and all along it was government signage instructing on how to call for help if drivers spotted another driver in distress from an overdose. How do we solve that? 

Nobody seemed to talk or care much about that over the last five years. Instead we scrolled through our feeds looking for the next outrage, the next thing that would stir up the feud. The left got more left, and the right got more right. As Willie Nelson put it so well in Hands on the Wheel, 

In a time when the world
Seems to be spinning 
Hopelessly out of control
There’s deceivers 
And believers
And old inbetweeners 
That seem to have no place to go

We’ve lost balance, and those of us who are “old inbetweeners” have no party. The left has lost the thread, favoring a dangerously Orwellian strategy of thought policing. It’s hard not to think back to the genius of Orwell’s Animal Farm when hearing proposal to draw up a list of names of Trump supporters to hurt them. On the right, conservatism has been replaced with pure tribalism as well, emphasizing worries about culture over economics. Our political discourse has indulged a frenzy of group therapy, of yelling and screaming and has legitimized emotional reaction and protest over thoughtful discussion. 

The election, by itself, does nothing to upend what has become a stable and steady diet of cathartic outrage and recrimination that Orwell illustrated so perfectly in 1984, the “two minutes of hate.” What will replace it? 

Unfortunately, I’ll offer no answers here to this deep problem. What I’ll do is suggest, if we get a respite from the national nonsense, what we might do to clear away some space to rebuild conservatism. I am a conservative. No, I don’t care where you use the bathroom or if you’ve had an abortion. No, I’m not a libertarian. We are free whenwe have good government not because of its absence. The work we must do is defining and establishing that good government. We have an opportunity now to do this. Here’s what it could look like. 

Exchange of Value 

I often tell the story of my conversation with a middle of the road left leaning friend – a Wal-Mart hater. I described the “free market” as the place where people show up with deficits and assets. I have a cow that gives milk, but no apples. My neighbor has apples and no milk. We bargain. We discuss. At the end of the conversation, he walks away with a quantity of milk; I leave with a number of apples. We each walk away maybe thinking we got the better of the other, but we ideally have what we need. My friend said, “That’s just called ‘civilization.’” Indeed. 

But this most basic concept needs to be hauled out from the garage, dusted off, and perhaps given a couple coats of paint. But the notion that what is at the heart of every society and civilization is the satisfaction of the most basic needs through collaborative exchange of value is not only durable, but it is simply fact. In North Korea selling and buying is illegal with a penalty of death. Yet “grasshopper markets” persist, with women setting up tables to buy and sell. The persistence and need for value exchange isn’t capitalism, it’s human nature. 

Freedom 

Well, why not just change that nature. True, one might make a compelling argument that value exchange often if not always results in winners and losers. Shouldn’t we together use reason, and policy, find methods and strategies to change that nature, to mold it and shape it toward a better world, one without winners and losers? When I was a student of religion, I wrote a paper comparing Buddhism and Marxism, concluding that Marxism was truly a materialistic version of Buddhism. All history hitherto is the history of class conflict, argues Marx. Eliminate private property and that conflict ends. All life is suffering, and suffering is caused by unsatisfied desire; overcome desire and suffering ends, says the Buddha in the Four Noble Truths. 

I think my conclusion then is the same one I would reach today: changing our nature is best done as individuals through religious practice and faith, not through public policy and government mandates. Trying to change human nature with legislation, as Hayek so brilliantly points out, is the Road to Serfdom. When efforts to get human nature to change fail, the result is force. Laurie Anderson states it vividly in what I consider to be an anti-fascist hymn, O Superman, 

‘Cause when love is gone, there’s always justice.
And when justice is gone, there’s always force.
And when force is gone, there’s always Mom. Hi Mom!

The free exchange of value, with its uncertain outcomes and winners and losers, isn’t a system or ideology, it is the source of our freedom. Any effort to promise certain outcomes always fails, and when it does, the need to find a culprit is natural and the result of the loss of freedom and worse. Freedom means acceptance of the unknown and uncertain future and doing what we can to make that future more certain and more secure for as many people as possible. 

Expanding Opportunity

Inflation, rising prices because of scarcity, is the single most dangerous threat to the well being of people who are poor. Solving this means increasing production and supply. On the other hand, greater production and expansion of the economy creates more money and wealth, and that expansion can create competition among consumers in which poor people can lose. Balancing this dynamic is our key to expanding opportunity. Exerting control over the economy is never certain and it presents many temptations, like wage and price controls, reckless tax policy, and overregulation. 

Opportunity is exactly that, it is a chance, not a promised outcome. In any game with winners and losers, the expectation is at the end, there is a reshuffling of the deck, the next match, a new season, and a sense that having lost created lessons. The rules matter, and when the rules tend to favor one kind of winner over another kind of loser, after much consideration the rules can and should be changed. Consider the height of the pitcher’s mound in baseball. The pitcher’s mound in baseball is highly regulated, but it is not adjusted after every ball, strike, or homerun. Similarly, economic policy can’t be subject to petulant changes over short periods but instead consideration of how to improve outcomes through playing the game better than the other side. 

Good Government 

Edmund Burke wrote of the men that established the settlement of English government known as the Glorious Revolution, that

They knew that a doubtful title of succession would but too much resemble an election; and that an election would be utterly destructive of the “unity, peace, and tranquility of this nation,” which they thought to be considerations of some moment.

Edmund Burke, Reflections on the Revolution in France

Was Burke anti-democratic? Hardly. He also wrote this in the same book, Reflections on the Revolution in France, 

“I attest the retiring, I attest the advancing generations, between which, as a link in the great chain of eternal order, we stand.”

Edmund Burke, Reflections on the Revolution in France

Burke’s greatest contribution to conservative thought was in his criticism of the French Revolution. He left no comprehensive theory of government, but by looking at the negative spaces in his criticism of the French Revolution and his support of the American Revolution we can see the shape of what good government looks like. 

In frustration, I have thought how nice it would be to have a coup and seize control of local government to do it the “right way.” Imagine that. How could such a thing be accomplished? Only through fiat and force. Nothing is more frustrating to the will of aggrieved groups and individuals than the slow machinations of government. But that is precisely the point. Good government is not an active player in the game; rather it is like the wall in squash, present, essential, seemingly permanent and unchangeable but impersonal and without any bias toward either player. 

Order and predictability are essential for the function of a market with free exchange of value. But to simply destroy the rules creates chaos. Burke’s view was that we must work to improve our system, always imperfect, by conserving what is good from those who came before in the interests of those who will come after. This is and should always be the conservative principle of good government. And rules exist to be challenged through innovation. Think of Uber or other share based businesses; they have broken rules but made life better. These disruptions are not destructive but instructive and must be embraced.

Taxation 

The simplest principle of the function of taxation is that taxes, 

• Raise revenue for common benefits, 
• Motivate behavior; and  
• Redistribute wealth 

If we wish to have an open space in the center of a growing town with rising property values, then a reasonable way to finance the acquisition of the land is a tax levied on all people to fund that acquisition and operation of what we’d call a park, something available for the use of all. This is an example of the first principle. 

If we don’t like cigarette smoking, rather than inveigh against its immorality, we can tax the product and use the money generated to support quitting programs. If we support more housing, we’d reduce direct and indirect taxation of it through pointless regulation. We should never tax or regulate things we want more of. 

And yes, taxes can and do redistribute wealth; there are no taxes that do not do this. Therefore it is critical that every tax be considered in terms of who benefits and who gains and why this is preferred to some other way of achieving the same outcome. A fee on new expensive housing to subsidize housing that is inexpensive is idiotic; the answer to the problem of high housing prices is more housing, not a tax on new housing to subsidize government housing. 

Ripon, Henry Clay, and the American System

I was in Wisconsin more than a decade ago and I stopped by The Little White School House, the birthplace of the Republican Party. It was closed, so I couldn’t go inside. Later, I had the chance to visit both Andrew Jackson’s Hermitage and Henry Clay’s home in Lexington. You can read my reverie on that trip here. Jackson and Clary represented two distinct paths in American government, limited and weak in the case of Jackson, and active and engaged with the economy in the case of Clay. Clay’s system, related to Hamilton’s vision of a strong banking system, became the American System and looked a lot like the New Deal, yet Clay’s view was the infrastructure of the new Republican party. Why mention all this? 

It’s time to turn off the computer and then turn it on again. I think people with a good sense of being a conservative need to think about the basics, the origins, and the operating system underneath what we say and do. There’s nothing wrong with being a libertarian. If being against abortion and condoms turns your crank, fine. If you want to invade other countries and be the “leader of the free world,” then support that. But are views on those things “conservative” or are they essential to part of another world view? What’s more important?

But it’s time to redefine conservative, not into some kind of politically correct and watered down broth, but a hearty stew of the deep principles in Magna Carta, flavored by the sweat and blood of civil war, religious feud and foment, settlement, establishment of limited government and church, served in an open market, and seasoned with innovation and spontaneity. 

Americans didn’t invent the separation of powers Montesquieu describes in The Spirit of the Law; the separation of powers emerged, in much the same way Marx hoped his dialectic would unfold. If anything, Marx had a sense of the dynamism of ideas in history and the sense in which they work themselves out using, it would seem human beings as the canvass or clay. But what’s true is that we are the maker as much as we are the made. I have recently fallen in love with The Maker, a song originally written and recorded by Daniel Lanois in the late 80s. It’s worth quoting the lyrics here (and I have no editor so, I’m going to). 

Oh, oh deep water, black and cold like the night
I stand with arms wide open,
I’ve run a twisted line
I’m a stranger in the eyes of the Maker
I could not see for the fog in my eyes
I could not feel for the fear in my life
And from across the great divide,
In the distance I saw a light
Jean Baptiste’s walking to me with the Maker
My body is bent and broken by long and dangerous sleep
I can’t work the fields of Abraham and turn my head away
I’m not a stranger in the hands of the Maker
Brother John, have you seen the homeless daughters
Standing there with broken wings
I have seen the flaming swords
There over east of Eden
Burning in the eyes of the Maker
Burning in the eyes of the Maker
Burning in the eyes of the Maker
Oh, river rise from your sleep

The lyrics are mystically American, presumably alluding to the Louisiana Purchase, a new Eden, and the transformation, in a dream perhaps, of someone lost and alienated. The protagonist in the song is alienated by fear and in the eyes of The Maker, a stranger. The redemption comes when he goes from being simply seen by God to becoming malleable in His hands. (See my post on the song for context). 

This is and must be our relationship with history and politics. We are both the clay and the hands of history. It’s time to decide what really matters to us if we are conservatives; not the end of government or culture wars or being against every tax, but being for free expression through the exchange of value – not money, value – in an orderly civic space sometimes interrupted by uncomfortable and distressing innovation. This, I’d suggest is the direction we should go from here. What do we want to make of government and what should it make of us?