By Sherri Way, President MWPOA, Realtor at Keller Williams, Landlord
Attention lawmakers! Attention tenants! Do you want to provide affordable housing to those who really need it?
If the answer to this question is yes, then you need to work with landlords instead of imposing legislation that works against landlords.
Landlords depend on tenants and tenants depend on landlords. With the current lopsided legislation and the potential for it to become more lopsided, it is making it more difficult for those who need it the most to find rental housing.
Being a landlord is a business. Landlords are not social services. They must do what they can to ensure that their business runs well, and this means getting tenants who can pay the rent and removing tenants that do not pay or that cause problems.
Landlords look at 3 specific criteria (sometimes more) when choosing a tenant:
- Credit: Good credit indicates responsibility and respect for others to whom they own money. While sometimes life gets in the way (job loss, divorce etc.), the higher the credit score, the more likely a tenant is to be approved for an apartment.
- Landlord history: If a tenant was good to a past landlord, then the chances are they will be good tenants moving forward. Tenants who are evicted (for good reason), typically are going to be viewed as problems.
- Income: Landlords have guidelines they use with respect to income. Typically, landlords require that no more than 25%-40% of a tenants’ combined income can go towards the rent.
As legislation is passed that makes it more difficult to evict (e.g., Just Cause Eviction etc.), landlords tighten up their guidelines. Landlords may require lower rent/income ratios, i.e., 25% instead of 40%.
For credit, landlords may previously have taken someone with a credit score in the 500s and now, thanks to tougher landlord laws, they are requiring 600 or higher.
While tenants with low credit scores or high rent/income ratios may be good tenants, why should landlords take a chance that they may have to evict when there are many other tenants with good credit and low income/rent ratios who are looking to rent?
The first rule of being a landlord is that an empty apartment is better than one with a bad tenant.
So legislators, tenant groups: you need to work with landlords if you really want to solve the housing crisis for those who really need it. By passing more legislation that makes it harder to evict, you are only making it harder on those who really need it.
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