The LandLord Advocate Nov 2010
I wrote last month as I prepared to give a Fair Housing Seminar to a group of IREM Professionals. I write now about a topic that we discussed at that seminar that has rocketed back to the top of my radar screen – expanding protected classes.
In our October 2009 edition, I wrote about the ever growing expansion of protected classes and the efforts nationwide and here in Connecticut to provide protected class status to convicted felons. I write now because the possibility of just such protection has inched at least one step closer to a reality here in CT. No, there is no draft legislation on the way to the governor’s office for review, but a pilot program in a large CT city could pave the way for just such an offering to our lawmakers.
I just read an article concerning a new program initiated by the New Haven Housing Authority that provides preferential placement of convicted felons who apply for and qualify under the program to live in their communities. I won’t get into the details of the article but can say that although federal regulation allows a public housing authority to deny a convicted felon access to publically funded housing, New Haven has opted to test a program where not only are convicted felons allowed to live in public housing, but, they get preferential placement in front of other applicants for the same housing. This program and New Haven’s desire to expand it (should it be successful) cannot be overlooked nor its potential in this state underestimated.
I know many of you use prior criminal history as a critical applicant screening criteria. And, as of this writing, I know of no law in CT or elsewhere that prohibits the use of criminal history as a disqualifying factor. However, as we discussed in the recent Fair Housing Seminar, there is ongoing effort to expand protected classes and the protections they enjoy. And, as we discuss in most of our seminars, public housing and other subsidized programs are often the test bed for new programs and policies that eventually seep into the private sector. Many of these programs and policies adversely affect and dilute private property ownership rights.
As we wrote about in our October 2009 article on Fair Housing, CT has seen attempts to expand Fair Housing protections to convicted criminals. Thus far, these attempts have failed. But, legislation that doesn’t pass doesn’t always just die. It is frequently reintroduced, sometimes every year, until it gains the support it needs to actually pass. One way it gains support is developing anecdotal or actual evidence of “success” stories that would be theoretically recreated under the proposed law. New Haven could be just the success story convicted felons need to become a protected class under Fair Housing laws, obtaining all of the benefits any other protected class receives under the comprehensive protections so provided.
There is no guarantee that the New Haven program’s success will serve as such a catalyst, nor is there any guarantee the program will succeed. While we wish New Haven and the individuals it has chosen to participate in the program the best, we also stand guard against the impact such a program could have on the private property owners and managers who otherwise don’t want further government intrusion into their property rights.
Recent decision backs landlord’s right to enforce the law.
In a June 2010 opinion involving commercial leased property, the Connecticut Appellate Court has clarified that the state entry and detainer act does not prevent a landlord from having a tenant arrested for criminal activity on the premises and from seeking a “no contact” restraining order that prevents the tenant from using and occupying his commercial premises. This substantial ruling clarifies that the state entry and detainer statute only protects tenants who peaceably possess the commercial premises, not those who commit criminal law violations on the premises.
In Bedard v. Weston Motors, LLC, tenant Christopher Bedard subleased commercial premises from landlord Weston Motors, LLC through its manager-member Scott Bird. The tenant and landlord separately operated their respective businesses on the premises. Two months after signing the lease, Mr. Bird called the police because of a “heated exchange” between he and the tenant on the premises, during which the tenant yelled and screamed that he was going to kill certain individuals, and his fear that the tenant may use a firearm that he stored on the premises.
Upon arrival and investigating the situation, the police arrested the tenant for breach of peace in the second degree and threatening in the second degree, and apparently ordered the tenant to have no contact with the landlord and not to return to the premises until his criminal court appearance. At the first criminal court date, the judge entered a “no contact” restraining order that prevented the tenant from returning to the premises.
The tenant later sued the landlord and Mr. Bird in housing civil court claiming that they violated the state’s entry and detainer statute (Connecticut General Statutes Section 47a-43) by having him arrested and having a “no contact” order entered, because it forcibly deprived him of the right to occupy the premises. The trial judge agreed and ordered the landlord immediately to place the tenant back in possession of the commercial premises upon the lifting or modification of the criminal judge’s “no contact” order. The trial judge stated that “to find otherwise would place [tenant] in a wholly untenable position. While it may technically be the order of the court rather than the acts of [landlord and Mr. Bird] that serves to bar [tenant] from [the] premises he rightfully occupied, it was Bird’s act of contacting the police that set this chain of events in motion.” In other words, the trial court started its analysis from the landlord’s actions in calling the police and obtaining the “no contact” order, not the tenant’s preceding criminal behavior.
The landlord refused to accept this result and appealed the case to the Appellate Court, claiming that the trial judge erred in ruling for the tenant. The Appellate Court agreed and held that the primary question was whether Mr. Bird’s complaint to the police was a “pretext” (or a false claim) to try and circumvent summary process to remove the tenant from the premises. Noting that there was no evidence in the trial record to support that Mr. Bird’s complaint was a pretext, the Appellate Court noted that it was the tenant’s actions in causing such a disturbance, not Mr. Bird’s act of telephoning the police set in motion the chain of events leading to his arrest and the no contact order. The Appellate Court held:
It cannot be said that under our case law that the entry and detainer statute protects a possessor from being removed from the premises by the police and from subsequently having a no contact order issued against him. Section 47a-43 protects peaceable possession from disturbance. The [landlord and Mr. Bird] did not violate Section 47a-43 by effectively using the police, and subsequently the court’s no contact order, as a ‘strong hand’ to dispossess the [tenant].
This makes perfect sense – the tenant engaged in the breach of peace and threatening, and all the landlord did was respond with an appropriate call to the police. The landlord does not (and should not) lose any rights to the enforcement of the criminal law just because the landlord signs a lease with a tenant. Crimes are a criminal matter, not a civil matter, and tenants cannot use the housing civil court to undermine a landlord’s right to keep crime and criminals from the premises.
As discussed in last month’s newsletter, this landlord remembered to think about the big picture when faced with a tenant’s challenge to the landlord’s legal actions, and engaged with his attorney before giving up a demand that the court enforce the landlord’s rights because of a tenant’s claim. It is not enough that conventional wisdom, most cases, or even other trial courts have handled a case a certain way – the law is there, but only for those landlords who demand rulings within the statutory language that further their business interests and objectives.
Trends to watch and studies worth discussing.
The Center for Housing Policy (“Center”) recently published a report reviewing a number of research projects concerning affordable housing that I thought was worth highlighting here. The various projects and the Center itself seem to focus, at least in this instance, on the growing problem of available affordable housing, never really offering any ideas on how to solve the problem they spend so much time researching. Nonetheless, I think a few of the conclusions they reach based on their research may be interesting to property owners and developers.
The Supply of Affordable Housing is Down and Diminishing
A trend that started as far back as 2003 continues to expand as the availability of affordable housing continues to drop. There are numerous factors creating this situation, not the least of which is the impact our economy has had on new property development as a whole. I think there are two reasons this is important:
1. New development will likely include more affordable components
As a developer of multi-family housing, you have probably already experienced a growing requirement that any new multi-family projects include an affordable housing component. You should expect this to continue (and perhaps grow) as efforts to expand affordable housing stock continue to increase. If you have not already experienced the impact of including affordable housing in your development or have only had minimal experience, your next development project team should include a member well versed in navigating this requirement. The viability of your project could depend on effective inclusion of affordable housing.
2. Other subsidy programs will be used to fill the gaps
We’ve been discussing at seminars for the last several years the likelihood that subsidy programs will continue to grow. With the affordable housing stock continuing to diminish, don’t be surprised when other subsidy programs, like Section 8, are called upon to assist with families seeking affordable housing. And, although Section 8 is a voluntary program under federal law, CT fair housing laws make it a mandatory program in this state. As other programs fill the affordable housing gap, you should expect to see an expansion of this and other programs’ mandatory participation.
Doubling-up Remains on the Rise
Consolidating households is an important factor in rising vacancy rates. The Center at least suggests that this trend existed late into 2009 and would likely continue into the near future as a result of the diminishing affordable housing stock. Now, remember, the brief focused on affordable housing. If you are a market property, you may not be experiencing this at the same levels as the affordable housing communities. Thus, it may have less of an impact on your vacancy rates. But, all managers should be aware that doubling-up may be resulting in a greater number of people living in your community than you realize. Keep your attention on proper occupancy so you can ensure accurate occupant information on your property.
Income Calculation Models May Be Outdated
Many of you use income calculation models to help screen applicants. And, in seminars across the state, we’ve heard that the most common version of that model is 30{b3839be935df112798d4ec5997aa1a27aa9a9725854b075bcbd0000f0c7f06fc} of an applicant’s gross income should cover the rent. This is a similar model to that used by subsidized programs when determining the subsidy a tenant will receive and the amount the tenant must pay directly to the landlord. In its October brief, the Center suggests that this income model may be outdated as it fails to consider a second criterion largely impacted by a person’s choice in housing – proximity to the workplace. Again, the Center’s focus is on affordable housing and the impact of rents and transportation costs on low-to-moderate income tenants. However, their observation that the income model may be inadequate could apply even in the market environment.
As owners and managers, you want tenants to be able to timely pay their rent. Their ability to do so is not only income dependent, but also lifestyle dependent. If they live in your suburban community and commute a long distance to their place of employment, perhaps using a 30{b3839be935df112798d4ec5997aa1a27aa9a9725854b075bcbd0000f0c7f06fc} income ratio is overlooking a real challenge to getting your rent paid. Lowering the percentage used in your income model may increase the likelihood that the tenant’s decision to pay the rent on time need not be overly influenced by other financial factors.
As I indicated at the outset, this information comes from The Center for Housing Policy and its focus is affordable housing. But, as we’ve said many times, housing policy often originates in the affordable housing arena and finds its way to the market rate communities eventually. Knowing what the affordable housing advocates are focused on will help you plan for the future of your community.
Getting help from CT’s DECD – an agency you may not be aware of.
Landlords and their attorneys are surrounded by acronyms, notably those for organizations to which they may belong, such as the National Apartment Association (“NAA”), Connecticut Apartment Association (“CTAA”), the Connecticut Chapter of the National Association of Housing and Redevelopment Officials (“Conn-NAHRO”), New England Affordable Housing Management Association (“NEAHMA”), and the Connecticut Housing Coalition. We participate in the annual conferences sponsored by each of these organizations and invariably see DECD – the State of Connecticut Department of Economic and Community Development – present.
We often find that our landlord clients do not know what DECD is or does. Moreover, they do not realize that it can be a source of funding for their development, acquisition, renovation, and operations of multi-unit residential housing.
DECD’s Office of Housing Finance runs at least three (3) financing program – called the Affordable Housing Program (AHP or “flex” program), Housing Trust Fund Program (“HTFP”), and HOME Investment Partnerships Program (HOME”) – and one listing service – called CTHousingSearch.org – that may benefit landlords operating or investing in Connecticut. All three financing programs accept applications from for-profit developers, non-profit organizations, local housing authorities, and municipalities – the HOME program is also open to individuals. The listing service is free and available to all landlords operating in Connecticut.
While each has its own focus, all three financing programs strive to support the provision of quality, affordable housing for Connecticut residents of all incomes, plus the advancement of mixed-income developments. Accordingly, DECD does not focus its programs on only low-income or subsidized housing, but the development and integration of these units into communities with market-rate units.
AHP is focused on housing families up to 100{b3839be935df112798d4ec5997aa1a27aa9a9725854b075bcbd0000f0c7f06fc} of the Area Median Income, HTFP will go up to 120{b3839be935df112798d4ec5997aa1a27aa9a9725854b075bcbd0000f0c7f06fc}, and HOME focuses on 80{b3839be935df112798d4ec5997aa1a27aa9a9725854b075bcbd0000f0c7f06fc} (for home ownership) and 60{b3839be935df112798d4ec5997aa1a27aa9a9725854b075bcbd0000f0c7f06fc} (for rental housing). According to DECD, AHP and HTFP funds come from the sales proceeds of the state’s general obligation bonds, which it awards competitively as loans and/or grants. HOME funds come from the federal government, and DECD receives an average of $13 million annually. AHP, HTFP, and HOME funds can be used for acquisition, rehabilitation, new construction, demolition, rental housing, home ownership, and adaptive re-use of historic structures, while HOME funds can also be used for special needs housing.
For additional information about these funding programs, landlords can contact Dorothy Malerba at DECD at:
Office: (860) 270-8183
Fax: (860) 270-8032
Email: dorothy.malerba@ct.gov
Finally, DECD is offering a free service to all landlords operating in Connecticut to advertise their property listings, including property descriptions, pictures, maps, and information about nearby amenities. DECD contracted with Socialserve.com (a nonprofit that runs such listings in 19 states) to create this listing service which is web-based and searchable, and which has a bilingual call center to assist users who cannot access (or are not comfortable) with the Internet. Landlords can access the service at www.CTHousingSearch.org or call Socialserve.com at (877) 428-8844 or DECD at (860) 270-8164 with questions.
Your landlord attorney can be an invaluable reference point for landlords in dealing with DECD, both to help initiate contact with the appropriate program and to advise landlords about the legal and operational environments in which DECD’s financing programs operate.
Quick Tip:
CT energy programs and services to save you money!
Residential landlords can contact their local utility provider for energy efficiency programs and services to benefit their business and unit infrastructure (as well as their personal home) and offer a value-add to their tenants by publicizing these programs.
The primary program is an in-unit (or in-home) energy assessment and weatherization program available to landlords and tenants, which has two (2) names for apparently the same program – the Home Energy Solutions program and the Weatherization Residential Assistance Partnership (“WRAP”) program, apparently only distinguished by the eligible applicants and cost (see below). Under these programs, a technician will come directly to the apartment complex or home and actually perform a variety of energy-savings services, such as:
- Check and seal drafty windows and doors to eliminate critical drafts and air leaks;
- Check and seal ducts to eliminate significant air leaks;
- Evaluate the walls and attic to determine if insulation is needed, and identify incentives to add insulation that may apply;
- Determine if you qualify for rebates for replacement of certain inefficient appliances with qualifying energy-efficient models, or for qualifying central air conditioning systems;
- Provide and install energy-efficient, compact fluorescent bulbs and table lamps;
- Provide and install hot water-saving measures such as faucet aerators and low-flow shower heads; and
- Provide additional efficiency measures as needed.
Families or individuals on a low or fixed income (at or below 60{b3839be935df112798d4ec5997aa1a27aa9a9725854b075bcbd0000f0c7f06fc} of the state median income) will receive the services for free under the WRAP program, while everyone else pays a flat fee of $75.00 for the Home Energy Solutions program.
Landlords can facilitate this process by completing the Owner’s Permission Statement for their tenants in advance (the WRAP program requires the landlord’s permission before the tenant can complete work for the tenant).
Landlords can access these programs and obtain more information by calling 1-877-WISE-USE or by visiting www.ctenergyinfo.com.
DISCLAIMER:
The reading of this newsletter does not form an attorney-client relationship. The contents of this newsletter are for informational purposes only and do not constitute legal advice. Nothing in this newsletter is intended to imply or predict the outcome of any legal matter that you may be considering or be involved in. The Landlord Law Firm makes no warranties of any kind regarding the information contained in this newsletter.