‘Renters rights’ legislation is about optics, not solutions

Renters may acquire new rights, but will they have affordable quality housing?

By Jamie A. Hope | August 12, 2023

“The nine most terrifying words in the English language are, ‘I’m from the government, and I’m here to help,’” President Ronald Reagan said on this date 37 years ago.

Keep the Gipper’s maxim in mind as Democrats in the Michigan Legislature pursue what they call “renters rights.” Despite their stated intentions, their intervention in the housing business is most likely to make things worse.

Government rules during the COVID-19 pandemic forbade landlords to evict renters who did not pay. This and other restrictions hurt more than the wealthy. One-third of individual investors in the rental property industry are households with a low-to-moderate income. Rental properties make up to 20% of their income, according to Brookings Institution research.

Landlords also have expenses such as mortgages, utilities, and taxes, which they pay with income generated by renting out their properties. Yet during the eviction moratorium, they were left with little assistance.

Various members of the Michigan Legislature have introduced housing-related bills this term. You can find those on the Legislature’s website. Some of the bills, advertised as helping tenants, could reduce the quantity and quality of available housing.

House Bill 4062 would forbid landlords from considering a prospective renter's source of income, such as public subsidies, in deciding whether to extend a lease. House Bill 4063 would embed that restriction in Michigan civil rights law. Senate bills 408 and 409 would make it harder for landlords to recoup money owed by renters who do not pay.

Another measure, House Bill 4878 would make it illegal in most circumstances to consider a person’s criminal record when renting property. (There are some exceptions, such as for sex offenders.)

House Bill 4891 would require landlords who reject a prospective tenant’s rental application to refund the application fee.

Several of these bills create new penalties and open landlords up for lawsuits.

The likely outcome, if these bills become law, will be a financial burden on landlords. The increased costs and effects of the legislation will be passed on to renters, making the housing crisis worse. Landlords may also put off improvements or skimp on maintenance as a way to control their costs. Existing landlords, as well as prospective ones, may decide to forgo building new units.

Renters do face financial challenges. Year-over-year rent increases averaged 14.65% nationally between October 2021 and August 2022, according to rent.com. Rents in Michigan went up 6.4% on a year-over-year basis, according to the website’s latest numbers.

State government could help renters by making it easier for developers to create new units and by refraining from imposing new laws that raise costs. When a soaring cost of doing business and the headaches of consistently losing income due to new laws become the norm, property owners will not be the only ones to suffer.

What good are “renters rights” laws if the number of rental units shrinks?

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.

Michigan budget gives $5M for collection of racist images

Ferris State’s Jim Crow Museum has taken in $6M from taxpayers over two years

By Jamie A. Hope | August 11, 2023

The state of Michigan is granting $5 million from the 2024 state budget to Ferris State University’s Jim Crow Museum of Racist Imagery.

This is the second time in two years the museum has received money from the state. It was given $1 million in the 2023 budget, bringing the total to $6 million in two years.

The museum “uses objects of intolerance to teach tolerance and promote social justice,” according to its website.

The identity of the Jim Crow Museum’s benefactor in Lansing is not known. The grant for the museum came in the form of an earmark, and the released budget does not identify which legislators added items directed at specific districts and projects.

Ferris State’s $13,650 in-state tuition is 20.9% higher than the national average of $11,286, according to US News & World Report. The university raised tuition rates for undergraduates by 3.16% in the 2021-22 school year and by 3.2% in 2022-2023.

Ferris State University will also receive $59.6 million in direct appropriations from the 2024 state budget, meaning the grant for the collection is equal to 8% of the school’s appropriation for the year.

The museum’s collection includes about 20,000 objects related to the Jim Crow era in the late 19th and early 20th centuries, according to an October 2021 Q&A.

Trustees approved $5 million toward a goal of $22 million the museum hopes to raise for an expansion, according to a Feb. 17 university press release. The project would give the museum a 7,500-square-foot area for displaying items as well as hosting conferences, lectures and workshops.

The Jim Crow Museum did not respond to a request for comment.