HUD’s new guidance on Criminal Background checks places Housing Providers and Municipalities in conflict over the recognition of Arrests!
For the ten page HUD Guide – https://portal.hud.gov/hudportal/documents/huddoc?id=HUD_OGCGuidAppFHAStandCR.pdf
HUD’s guidance includes the banning of arrests from consideration for housing. While this may seem legitimate, it places housing providers in a very awkward position, as many municipalities have laws and regulations on the books regarding drug users, and justify eviction for drug-related arrests. HUD states, “As the Supreme Court has recognized, “[t]he mere fact that a man has been arrested has very little, if any, probative value in showing that he has engaged in any misconduct. An arrest shows nothing more than that someone probably suspected the person apprehended of an offense.” While this harkens back to a better understanding of “innocent until proven guilty,” until the municipal nuisance conflict is resolved, housing providers will face aggressive city enforcement on one side, and assertive housing advocates on the other. National REIA suggests working with your local housing advocates to address this concerns with municipalities.
(Cincinnati, OH) The National Real Estate Investors Association (NREIA) said today that new guidelines issued Monday by the U.S. Department of Housing and Urban Development go too far and will have a chilling effect on criminal background checks used to screen potential tenants. According to HUD, because a disproportionate number of African Americans & Hispanics have criminal records, they face potential discrimination in housing options based on race, in violation of the Fair Housing Act. National REIA believes this would severely restrict a landlord’s ability to protect residents from predictable harm & violence.
From every Congressman who rents an apartment in DC, to the poorest of their constituents in every district, has just been made less safe with HUD’s pronouncement that makes criminal background checks tantamount to discrimination.
Fair Housing Discrimination is a serious issue. No person should be discriminated based upon race, color, religion, national origin, sex, disability, or familial status. For HUD to claim that an individual’s criminal behavior should somehow be protected is a gross violation of the Fair Housing Act, and undermines the First Amendment protection of Free Association.
HUD’s flawed argument on “Discriminatory Effects Liability” makes the case that Safety, is neither a substantial nor a legitimate concern. In fact, according to HUD’s theory, until a property has residents raped, rapist shouldn’t be banned. Similarly, unless there have been murders at the property or community, murderers shouldn’t be banned. Ironically, HUD recognizes that convicted drug manufacturers and distributors can be banned, because of specific federal language, only to make exceptions for those who use drugs, or are convicted of any other criminal act!
The approach recommended by HUD, to individually consider each applicant flies directly in the face of HUD’s stated policy and directive from Congress, to treat each person equally. Today’s guidance does little more than try to make the criminal class a protected class – beyond the scope of congressional authority granted by the Fair Housing Act.
Charles Tassell, Chief Operating Officer of NREIA said “While we agree that an arrest is not a justifiable reason to deny housing, after all a person is innocent until proven guilty, the banning of convicted criminals is an entirely separate issue.”
Tassell further stated that “the safety of the renting public should not be sacrificed.”
Cost vs Value
Last Friday at our Movers and Shakers we discussed using a General Contractor versus hiring your own Sub Contractors. Almost like buying Retail and Wholesale. However there are many drawbacks lsuch as When do you have an Alternative or Plan B?
We also spoke about which improvements do you make to a property. Frankly if it’s a rental and won’t add any Rent increase, take care of Safety and Health issues or prevent further deferred maintenance, then Skip it!
[email protected] of Ask the Builder suggested we look at Remodeling Magazines’ Cost vs Value Report which he generously sent the link for
So before you start your improvements you may want to see what the payback is.
PS I believe the Boston Globe listened in Friday because their Real Estate section “Address” in the Sunday edition 2/7/16 had a similar analysis but also used Angys List. I noticed a big disparity in their answers. What do you think?
HOW MUCH and WHEN do you RAISE RENT?
By Mike Hurney, Director of MassRealEstate.net
There’s a matter of position. You as a Landlord want to be perceived as Responsive, Fair and Honest, otherwise simple things won’t get resolved such as what’s “Wear and Tear” and what needs to be charged back to a Tenant. And you could even lose a good Tenant.
If you’re a Tenant, you never want the rent to increase, “It’s way too high already!”
And of course if you’re the Landlord “It’s been below market for too long, I’ve got to catch up!”
We need to get somewhere in between. As Successful Landlords say I didn’t get into this business to get a Job, I got into it to make Money!
Number 1 you’ve got to determine if there are any Rent Control Laws? Rent Control which limited or prevented any increase was originally instituted after the second World War when there was a housing crisis. Fortunately Massachusetts voters ended Rent Control it in 1994 after some Tenants in Boston, Cambridge & Brookline had enjoyed it for 30 years.
It’s more likely you would have Tenants on Section 8 than rent control. Section 8 is the Massachusetts version of Section 8 (Housing choice Voucher) program administered through local PHAs (Public Housing Authorities) and funded by HUD (U.S. Department of Housing and Urban Development) The Vouchers are mainly based on the applicants family income and nationality. There are strict eligibility requirements based on need and income. The PHA calculates the maximum housing allowance and the families contribution. It’s unlikely you’ll be able to raise the rent on families that have a voucher for your unit since it is set by the PHA and monitored by HUD.
Owners and especially Non-Owner occupied properties have two reasons to keep their rents current with market rates. First it helps Cashflow (Rental Income minus Expenses) and Secondly it’s an indicator of value that Buyers use to justify a purchase price. GRM (Gross Rent Multiplier) and DSR (Debt Service Ratio) are two commonly used by Real Estate Investors.
Here are some tips and guidelines for figuring How much and When to raise rents.
This information is for informational purposes only and cannot be substituted for Legal or Financial advice from licensed experts. When you consult these experts, Attorneys, Accountants and Tax Experts at least you know who to see if there is trouble! Mike Hurney is also the author and Coach of the Step by Step Course “How to Become a Real Estate Investor in 12 Easy Lessons” you can reach him at [email protected]
Copyright © 2016 Can be reprinted only in its’ entirety.
PS There are 7 Protected Classes that HUD prohibits any housing or Rental Discrimination against, Massachusetts has 8 more, New Hampshire has 4 more. As a Landlord, do you know
Heart Attack help when alone.
from [email protected] of Ask The Builder fame
1 Let’s say it’s 5:25 pm and you’re going home (alone of
course) after an unusually hard day on the job.
2 You’re really tired, upset and frustrated
3 Suddenly you start experiencing severe pain in your chest that starts to drag out into your arm and up in to your jaw.
You are only about five km from the hospital nearest your home.
4 Unfortunately you don’t know if you’ll be able to make it that far.
5 You have been trained in CPR, but the guy that taught the course did not tell you how to perform it on yourself.
6 HOW TO SURVIVE A HEART ATTACK WHEN ALONE?
Since many people are alone when they suffer a heart attack without help, the person whose heart is beating improperly and who begins to feel faint, has only about 10 seconds left before losing consciousness.
7 However, these victims can help themselves by coughing repeatedly and very vigorously. A deep breath should be taken before each cough, and the cough must be deep and prolonged, as when producing sputum from deep inside the chest.
A breath and a cough must be repeated about every two seconds without let-up until help arrives, or until the heart is felt to be beating normally again.
8 Deep breaths get oxygen into the lungs and coughing movements squeeze the heart and keep the blood circulating. The squeezing pressure on the heart also helps it regain normal rhythm. In this way, heart attack victims can get to a hospital.
10 A cardiologist says If everyone who gets this mail, kindly sends it to 10 people, you can bet that we’ll save at least one life.
11 RATHER THAN SENDING JOKES, PLEASE…CONTRIBUTE BY
FORWARDING THIS MAIL WHICH CAN SAVE A PERSON’S LIFE.
Should you be out looking for your First/Next Deal or Arranging for the Financing?
Personally, I like to get the Financing or Access to Funds. I don’t like to commit to something I can’t follow through on. Why waste someones time? Why waste my own time? What is most important, is to find out EXACTLY what Property and Terms those Funds will Finance. In the extreme case, look at how much trouble one of the more important Investors got into. Do you remember Jack, of Beanstock fame? Look at what he went after? what he got? and How much trouble it caused?
e.g. I recently committed to fund a deal, non-owner occupied SF for 75% of the purchase. The ecstatic RE Investor said “That’s great, I’ll just get my boyfriend to lend me the other 25%!” 😉 Sorry it doesn’t work that way with me, YOU’ve got to have 25% in on the deal, if you’re on the Deed.
So whichever you’re inclined to start with, Deal or Money, you’ve got to be doing one or both of them, right NOW!
If not, let’s figure out WHY not?
Too busy, Not ready, Into something else right now, The cat had kittens, You’re going away, You need to finish something first.
Let’s lift your “hood”… It’s probably Fear, mostly Fear of Failure which might lead to embarrassment?
Hold on, What’s THE classic American Movie?
Rocky! of course.
This poor amateur gets beaten, bad, several times but ALWAYS picks himself up and tries again until he’s Victorious!
One of my favorite songs, by Jimmy Cliff
You can Get it if You Really Want It!
The refrain is:
You’ve got to Try, Try and Try, Try and Try You’ll Succeed at last!”
And of course Napoleon is credited with “Don’t wait until you know everything and have everything. Start now and you’ll pick up everything you need along the way!”
There are some fundamentals that will make it easier for you.
You may want to get Educated? As an Engineer I like to know what I’m getting into. I’ve spent a ton of money on courses e.g. every couple of years I take the Basic Practice course at the MCLE It’s three days of intensive CEU training in all aspects of Law by the top Legal experts in each field. By the way if anything will take you down in this business it’s lack of knowledge of the Laws involved and they’re adding more each day:-( There are many courses offered by our National Speakers, the best being ones that have a follow up local BootCamp, where they see where we live and how their system may be adapted.
Of course I’ve gone through something like an Associates, Bachelors and PhD at the infamous “University of Hard Knocks” but you don’t have to when Networking with Seasoned Pros at our events But you do need to understand what works and what’s BS. I check in on several Blogs periodically where about 50% of the information is wrong and from someone that does not know what it should be.
Why not right now, write down what you need to do your next or first deal? Then we can knock those items off as we go! Even draw a house at the top of a page and a bag of money at the bottom and fill in what you think it takes to get there.
Again the Engineer in me tends to gather a lot of information and process it quickly, sometimes you even need to change your beginning assumptions before the deal.
So let’s fill your notebook with Where you’re not clear, what education you need and Get It! You’ll be glad you did it this way! And probably Successful at it!
At one time Robert G. Allen, the famous “No Money Down” guru, challenged me “If you think you know something about Real Estate, write a book about it. You will find out what you don’t know, fast!” After finishing my MBA I did write that book (and rewrote it about 50 more times, finally as a successful course).
Mike Hurney is a Successful Real Estate Investor, Director of MassRealEstate.net & NewHampshireREIA.org, Speaker and Author of the step by step Course: “How to Become a Real Estate Investor in 12 Easy Lessons” which is still available. and he can be reached at [email protected]