RENTAL HOUSING REGULATION IN COOK COUNTY Alan Mallach Senior Fellow Center for Community Progress October 13 2015 Increase in rental housing 20052014 Suburban Cook County Chicago The market is changing ID: 386633
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Slide1
BUILDING EFFECTIVE
RENTAL HOUSING REGULATION IN
COOK COUNTYAlan Mallach, Senior FellowCenter for Community Progress
October 13, 2015Slide2
Increase in rental housing 2005-2014
Suburban Cook County ChicagoSlide3
The market is changing
55,000 more rental units, and 30,000 more
single family
rental units in suburban Cook County today than in 2005.
This is an opportunity
and a challenge. Slide4
Opportunities and challenges
Opportunities for families seeking rental housing in suburban communities
New and inexperienced absentee landlords with limited skills and capacity
Difficulty maintaining scattered
site properties
Predatory, speculative
investors in low-price
communities, particularly in
South Cook County. Slide5
Low prices are a
major problem
Investor buys a 3 bedroom house for $20,000 and rents it for $900/month (tenant pays utilities)
Gross income (with 10% vacancy) over three years = $
29,160 – annual return on cash flow alone 15.3%
Gross income
with voucher
(
with 5
% vacancy) over three
three years
= $
43,947 –
gross annual return
39.9%
Expenses = ?Slide6
The response
Effective municipal regulation, coupled with pro-active strategies and incentives, can improve rental housing quality and reduce problems.
The most effective strategies are based on licensing and regular property inspection
Effective regulation cannot be punitive – must be geared toward building a strong landlord community – ‘raising the bar’. Slide7
Raising the bar
A rental licensing ordinance based on sound standards and regular inspection
A performance-based system oriented toward fostering compliance
A landlord support system
Incentives for good landlords
System must be sensitive to different legal powers of home rule and non-home rule municipalities. Slide8Slide9
Elements of an effective ordinance –
Home rule municipality
Findings
Definitions
License required; application procedure
Inspection and re-inspection
Issuance of licenses
Annual performance evaluation and property classification
Performance based standards
Fees
Violation; penalties Slide10
Elements of an effective ordinance –
Non-home rule municipality
Findings
Definitions
Landlord obligation to register (informational)
Nuisance physical conditions
Other nuisances
Outcome of chronic nuisance determination; registry
Inspection; re-inspection
Annual performance evaluation and property classification
Effect of annual review
Fees
Violation; penalties Slide11
A proactive approach
Find landlords – don’t wait for them to come to you
Work with landlord community – it’s in their interest, too.
Help build landlord and property management capacity
Build local government capacity through inter-governmental and partnerships with private and non-profit entities. Slide12
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