City Commissioners Vote to Starve Poor Children and to Lower Real Estate Prices

The big roll out of the 2016-7 budget occurred last evening, six hours of it. I voted “no” twice, once on a proposal to hire a new rental property inspector and the second time against the entire budget in part because of the inspector issue.

The pitch was that the city could help control crime and shiftlessness by improving the housing in which renters lived. Therefore the city should increase the inspection of these properties so forcing correction of perceived deficiencies. The city would do well by doing good!

I differed. The sociology here is dubious and the economics is even worse.

Sociologically, there are data showing that hooligans don’t own their apartments but rent. I’d intuit that these lowlifes don’t have much money, live in shabbier and cheaper quarters and are likely beat property up more than their more civilized contemporaries. But none of this supports the notion that living in a self created fleabag causes bad behavior. Correlation is not causation. Crime, poverty and laziness are not treatable by “improving” housing. It doesn’t pass the sniff test.

The economic implications of increased inspections are actually more ominous especially here in “Rentwood.” Nearby Grand Rapids increased inspections in 2011 and drove rental costs up by about $100 per unit.  Inspections cost landlords a average of $5,000 per unit which, capitalized, might have supported a $50 dollar a month increase But landlords had to come up with lots of money rapidly, they were uncertain about what other fantasies that the GR city fathers harborred and facing risk, doubled the rent increases. The knock on effect was that fewer renters could afford the new fare, so they moved back in with parents or doubled up in existing units so the demand for rental units faltered.  Marginal landlords were forced to exit the industry, they sold or abandoned their properties and so lowered real estate prices. Decrepit areas of Grand Rapids became more threadbare, not that you’d notice.

Well, say the reformers who wanted to improve the lives of the poor by improving the housing in which they live, it only costs each renter an extra $100 dollars a month to live in housing that we approve of. True enough, except that for many a $100 dollars is  a $100 dollars and spending it for rent means that they can’t afford peanut butter and jelly sandwiches for their kids, so they go hungry and, at best stare listlessly at the well fed reformers who arranged the original inspections and “improvement” of their quarters; at worst the urchins slit the throats of their oppressors.

If renters are unhappy with the cleanliness, safety or cost of their apartments they can easily move to others that they can afford that satisfy their wants. Governmental intrusion intended to make folks better by forcing them to live in more expensive housing than what they prefer comes at huge costs both socially and economically that dwarf the minor costs to the city of hiring another inspector.

Doesn’t anyone pay any attention to theory of unintended consequences anymore?

3 thoughts on “City Commissioners Vote to Starve Poor Children and to Lower Real Estate Prices

  1. Jerry DeMaagd

    You’re right on two counts: correlation is not causation, and cost of mandated improvements will drive up rents on average. We have, or have had, problems in the Ridgebrook/Christie area though, where duplexes border on single family homes. Lower cost rentals may be in public housing, mobile home parks, and large apartments…or perhaps back in bordering cities!

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    1. David DeBruyn

      i will answer this blog at this time with one comment .. as a standing Commissioner it is your duty to reperesent the residents of Kentwwods best Interest>> i find it totally Unexceptable to imply or degrade the city that has a balance of high and low homes to buy as well as great apartments and duplexes to live in>> but you went to far to bring up a term that is DECADES old and certainly NOT relavent to our city >> shame on you for tagging our City as Rentwood>>

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      1. erwinhaascommish Post author

        http://www.towncharts.com/Michigan/Housing/Kentwood-city-MI-Housing-data.html

        The percent of housing units that are rented is 41% in Kentwood versus 36% nationwide. Renters, as the victims of increased inspections was the whole point of the article. Renters tend to be young and poor, vulnerable to these pass through costs. We on the Kentwood City Commission need to be especially sensitive to their plight.
        The term “Rentwood” might offend you, but I refuse to let your political correctness distract our attention from this serious issue.

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