The house always wins: Michigan’s coming housing crisis will be man-made

In Decatur, Georgia, a landlord named Tim Arko tried in February to evict squatters from his property. The squatters called 911, and the police arrested Arko.

Six months later, Arko is still waiting for the legal eviction process to play out. That’s six months that Arko has not had access to his rental property. He’s unlikely to recover funds from the squatters, and he’s still unable to rent the property, to say nothing of recovering any damages the squatters inflict.

Such is life in a tenant-friendly state.

Property rights — the ability to choose who lives in your property and then to evict those people if need be — are under attack in America.

In Michigan, it manifested in COVID-era changes designed to avoid evictions during a global pandemic. Three years later, efforts are afoot to crystallize those changes into law by way of the “renters bill of rights,” a package of about 30 bills moving through the Legislature.

As my colleague Jamie Hope reported:

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.

That last one actually makes sense. Renters looking for housing tend to need the money. A $75 fee means a lot more to someone looking for housing than it does a landlord. Nobody needs to turn a profit running background checks.

Another bill, which bans landlords from using credit scores “as a determining factor,” makes less sense. It represents an extreme state intervention in the commercial housing market. An overreach such as this makes owning rental properties less attractive. The very suggestion in the bill is a turn-off to would-be buyers of rental properties.

If you are a renter in Michigan who sees hope in the efforts to push Michigan from a tenant-friendly to a tenant-favoring state in landlord-tenant disputes, a word of caution. Getting what you want today could limit your access to a new apartment tomorrow. Costs are already on the rise, without the bill of rights.

Let’s game this out. Let’s say the entire 30-bill “renters bill of rights” gets enacted into law, and tenant advocates get everything they’re pushing for.

An equal and opposite reaction from landlords will come: build more hoops and more costs for tenants, and more certainty for themselves. If renting property to people is a risky endeavor, costs will shift to tenants.

A plan meant to make life better for renters will instead make it harder and more expensive to be one. Lawmakers talk as if their plans are solutions. But there are no solutions, only trade-offs. Too little thought is given to those trade-offs.

If Michigan becomes a tenant-favoring state, renting a new apartment won’t be easy. Landlords who can’t choose renters through credit scores or payment history might require character references, large upfront payments and blood oaths.

If tenants are trained to overstate their rights, landlords will rent to only the right tenants.

The house always wins.

James David Dickson is managing editor of Michigan Capitol Confidential. Email him at dickson@mackinac.org.