Proposed Michigan court rules would hurt renters in the long run
Landlords warn of ‘voluntary payment system;’ eviction diversion prolongs the inevitable
Renters will suffer the most if Michigan’s court system makes pandemic-era court rules permanent, as has been proposed.
Michigan was already considered a tenant-friendly state in landlord-tenant cases, but property owners and managers say the pandemic court rules have made things worse. The Mackinac Center has argued that the proposed rules affect the substantive rights of landlords and should not be made permanent. The State Court Administrative Office is expected to decide soon what will become of the proposed rules.
Leslie Etterbeek’s LR Management, of Troy, is property manager for 10,000 rental units in 32 Michigan counties.
Before the pandemic, a nonpayment rate of 1% to 3% was common. So anywhere from 100 to 300 units.
These days, the nonpayment rate is 15%, Etterbeek told Michigan Capitol Confidential.
“I’ve never in the past had a lot of evictions or problems with people not paying. And I just think there’s a very bad misuse of the system currently,” Etterbeek said.
“No landlord wants to evict anyone,” Etterbeek said. But when it has to happen it’s best for all if the process moves quickly. Before the pandemic, it did.”
“When they left, it wasn’t with an insurmountable amount of debt,” Etterbeek said.
But the pandemic lengthened the process. Rental assistance programs were available, and now there is increased legal representation for tenants.
The eviction process now includes multiple adjournments and “empty” hearings, Etterbeek said. Meanwhile, the renter’s debt meter keeps running. Now people are leaving with $7,000 to $10,000 in debt.
“At that point, they can’t really make an arrangement,” Etterbeek said.
Difficulties with evictions extend to tenants who do pay their bills but don’t follow the rules, said Kristin Lortie, a landlord in Houghton County. Lortie owns 11 rentals.
“A single tenant eviction issue is a major problem,” Lortie said.
Even during the pandemic, landlords were able to pursue behavioral or rule-based evictions. But that process, too, has slowed, Lortie said.
Lortie says the new process makes land ownership less viable in Michigan.
“The state of Michigan has compounded the risk to my property rights,” Lortie told CapCon. “We have a voluntary payment system now. Why should they (the tenant) pay rent? Why should they move out when the lease is over? Why should they follow the rules?”
In her studies, Lortie became familiar with the eviction diversion movement. She warns that if its ideas take root, the property market for Michigan landlords will be upended.
“Stakeholders should act now to make key pandemic-era changes permanent to continue to prevent a wave of harmful pandemic-related evictions and a return to high pre-pandemic eviction levels,” reads a June 2021 report called Reducing Michigan Evictions: The Pandemic and Beyond.
Three times in one paragraph it mentions the word “pandemic.” The report was published by the Poverty Solutions program at the University of Michigan.
In 2020 evictions were paused on the belief that, during a global pandemic, it wouldn’t be safe to have sheriffs going into people’s homes, or to have people looking for new housing. That made sense, once upon a time.
But President Joe Biden said in September that “the pandemic is over.”
To retain pandemic-era policy changes without a pandemic to justify it is to strike against evictions as a concept. It’s to strike against the property rights of the landlord to remove a nonpaying tenant in a timely fashion.
This is politics, not public health. The U-M report admits as much.
“A growing body of research has documented the detrimental effects of eviction on individuals, households and neighborhoods,” the report reads. “This evidence suggests that eviction is not merely a symptom of poverty but also a cause of it.”
The new court rules are about avoiding evictions by any means necessary. If the pandemic has ended, so too should pandemic-era rules.
A tenant-friendly system is fine. But there’s nothing tenant-friendly about letting people rack up debts they can’t possibly pay back. These debts will make it harder for them to find housing next time.
As the U-M Poverty Solutions report explains: “Households who move as a result of an eviction, rather than by choice, move to poorer, higher-crime neighborhoods and are more likely to experience problems with their new housing like broken appliances, exposed wires, or lack of heat.”
Evictions can be delayed, but ultimately will happen. If tenants face these difficulties after evictions now – after falling only a month or three behind – what will become of the tenant who leaves with thousands of dollars of debt and needs to find a new landlord? Tenants who delay the inevitable, on the advice of counsel, have not done themselves any favors.
When they are kicked out, they will “move to poorer, higher-crime neighborhoods,” and do so with a mountain of debt.
James David Dickson is managing editor of Michigan Capitol Confidential. Email him at email@example.com.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.