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Pushing Back Against Corporate Landlords

Robert Damewood, Esq.

Regional Housing Legal Services

Pittsburgh People’s Assembly

for Fair and Equitable Housing

University of Pittsburgh

April 13, 2024

 

 

What can Pennsylvania municipalities do to protect affordable housing and empower tenants?

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Regional Housing Legal Services

Regional Housing Legal Services is a legal aid program whose mission is to create housing and economic opportunity in under-served communities in Pennsylvania and to effect systemic change for the benefit of lower-income households.

RHLS

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The Rise of Private Equity

Background

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  • 2008 Foreclosure crisis – Equity firms assembled large, geographically-dispersed portfolios of foreclosed homes
  • Digital technologies allow equity firms to automate core rental functions
  • Business model – buy low-priced housing in rising markets, spend little on repairs, increase rents, and maximize returns to investors
  • Vice.com, Robot Landlords Are Buying Up Houses https://www.vice.com/en/article/dy7eaw/robot-landlords-are-buying-up-houses

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Western PA Examples

Background

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  • Melvin Court (Penn Hills), Expiring LIHTC property bought by CityLife – plans to increase rents
  • AHRCO’s entire portfolio of HUD multifamily homes (Allegheny County) bought by NB Affordable/ Lakeside Property Management – cut security and repairs
  • Connect 55+ (senior building, Meadville), bought by Calamar Investment Group – increased rents by 30-40%

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Municipal Power

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  • Dillon’s Rule: Local governments may only exercise powers that are (1) expressly granted by the state, (2) necessarily and fairly implied, or (3) crucial to the existence of local government
  • Home Rule: Home rule municipalities may exercise all powers not denied by the state Constitution, by statute or by the municipality’s charter, subject to limitations specified in the home rule/optional charter authorizing statutes

Municipal Legal Authority 101

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Business Exclusion

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  • A home rule municipality shall not determine duties, responsibilities or requirements placed upon businesses, occupations and employers except as expressly provided by statute applicable throughout the state, to all municipalities or to a class or classes of municipalities
  • Only applies to affirmative burdens, not “negative or passive” ones (e.g., anti-discrimination laws)
  • To overcome the exclusion, a home rule municipality may invoke legal authority that any municipality has been granted

Home Rule Business Exclusion

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Business Exclusion

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  • Preservation Ordinances, e.g., advance notice, TOPA/COPA (Smaller Manufacturers v. Pgh)
  • Source of Income Ordinances requiring LLs to accept housing vouchers (Apartment Assn. v. Pgh)
  • Some Rental Licensing Requirements (Landlord Services Bureau v. Pgh) – under appeal
  • Most local regulation of the housing market is likely off limits

Exception: PA municipalities have broad ordinance-making powers to protect the health and safety of building occupants

The Business Exclusion Prohibits:

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1. Rental Licensing/Inspection

What Can We Do?

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  • Protects tenant health & safety
  • Preserves housing stock
  • Disrupts Private Equity business model by forcing LLs to make repairs & designate local agents
  • Gives municipalities useful info about ownership, repairs and rents – this allows municipalities to document the effects of investor ownership, ID problems and develop other solutions

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What Can PA Municipalities Do?

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2. Protections Against Retaliation

What Can We Do?

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  • Protects tenant health & safety
  • Preserves housing stock
  • Builds Tenant Power – This is important regardless of who the LL is, but especially if the LL is remote, automated and inflexible
  • Examples: Meadville, State College, Philadelphia, Erie, Sharpsburg

What Can PA Municipalities Do? (Cont’d.)

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3. Build Our Social Housing Sector!

What Can We Do?

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  • Invest in Nonprofit, CLT and Co-op capacity
  • Funding preferences for NPs, CLTs and Co-ops
  • Land Bank preferences for CLTs (e.g., Philly)
  • Permanent affordability requirements for public funding, public land and IZ
  • HACP needs to take a more active role in acquiring, preserving and expanding affordable housing

What Can PA Municipalities Do? (Cont’d.)

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Contact

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Robert Damewood�bob@rhls.org�Staff Attorney

RHLS Pittsburgh Office�100 Fifth Avenue, Suite 911�Pittsburgh, PA 15222�phone: (412) 201-4301�fax: (412) 434-5706

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