Box 22, Folder 19, Document 5

http://allenarchive.iac.gatech.edu/originals/ahc_CAR_015_022_019_005.pdf

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Box 22, Folder 19, Document 5

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Preliminary Draft - LANDLORD-TENANT LAW REFORM
I
Archaic landlord-tenant law and practices, once appropriate to an
agricultural society, must be reformed and modernized to meet the
need of industrialized urban America.
Ancient legal doctrine, construing a lease as a conveyance of an
interest in land rather than an agreement, leads to the holding that
the obligation of the tenant to pay rent is independent of the duty
of the landlord to repair and maintain the premises. The sole remedies thus available to the tenant to secure his rights are limited
to his vacating the premises a nd then claiming termination of the
lease or himself repairing the premises, financing the cost and thereafter cla iming a set-off against future rents.
Such limitations, while onerous to all tenants, are intolerable in
their application to poor people. Their choice of accommodations
within their means is minimal; they can neither finance repairs nor,
often, even gain access to the parts of the premises requiring repair.
\Vhile states and local governments, in proper concern for the lives,
hea lth and safety of all citizens, prescribe mi nimum standa rds for
housing accommodations, out-dated legal practices thwart the poor in
direct assertion of their rights.
II
Reforma tion of l a ndlord-tenant law is a state and local g overnment
responsibility burdened with . consequence to the National welfa re.
While appropriate solutions may vary between jurisdictions, certain
broad principles must apply throughout:
A.
St a te a n~ J oca l enforc ement of building, health a nd safety codes
must be stpe~ml ipeg ~nd imprQY?d. Admini§trgtive flexibili ty ~nd
f~@t fin ding muet be fo@tered and the ~ower af local courts
streng thened. The obligation of code compliance must be a prior
cha r g e on the property itself and a ll rights the~ein, rather than
merely a persona l obligation of the ownero
B.
Complianc e with law mu st be a basi c part of every agreement and
every righto Obligat i ons of landl or d an d tenant alike, as provided in buil ding , h ealth and safety codes , must b e construed as
cr ea ting indepen dent righ ts enforcea bl e by dir e c t l ega l acti on.
Determination of such i ssues in the cour t r oom must b e facilitate d .
Co
Public funds mu st not reward illegal -conduc t . Appropriate rent
withholding pr o.cedures must be devel oped for the welfar e tenant.
Appropria te acti ons must be taken in all public acquisitions to
the end that pric e s paid disregard valu es achieved from income
�derived in property operation contrary to minimum. building, health .
and safety codes.


* * * * * * * * * * * *


While these responsibilities are local, the Federal Government can and
has assisted:
1.
The establishment of neighborhood legal centers in slum.s by
the Director of the Office of Economic Opportunity, who are
making a major effort to help tenants secure their rights to
safe and sanitary housing.
2.
The convening of a Conference by the Attorney General to develop new procedures to insure that the rights of tenants are
fully and effectively enforced.
3.
The appointment of a Commission to make a comprehensive review
of codes, zoning, taxation and development standards.
I
III
Programs and activities of the Federal Government, while indirect in
tha t enforcement of fire prevention, housing , building , hea lth and
sanitation law is a responsibility of local government, can be of decisive importance:
A.
1.
Section lOl(a) of Public Law 171 qualifies Federal assista nce
upon the appropriate local public bodies underta king "p ositive
programs" and "a workable program" for community improvement
through the
"adoption, modernization , administration and enfor cemen t
of housing, zoning, building an d other loca l laws, codes
a nd r egula tions r ela ting to - l an d use a nd a dequat e sta ndar~s of health, s a nit a tion a nd safety f or b~il ding s , inGl1H'iin6 t}rn lUH; ~ng, CHHHlPEl.IlQY gf dwel:U,n~§ e ,,
Administrative regulations heretofor e issued by the Secretary
of Housing ari d Urban Development should be further cla r ifi ed to
dire ct s pec i fic enum.erat i on and a tt ention to t he applic a ti on
and enf or cement of loca l co de s a n d or dina nc es rel ated to life,
hea l t h an d safety t hrough out the l oc a l i t y a nd t o demon s trat e
increas ed eff or t and progress -i n s uch enforcemen t. Such enf or c ement of minimum. co des shal l b e re quired as protect i on of
l i ves an d heal th of occupants , i rresp ective of whether a basi ca lly s ound and sta ble area is t hereby crea t e d o
2.
The Se cretary of Housing and Ur ba n Devel opment can furt her impl ement t he purp os es of the l egi s l a ti on t hrough t he dev el opment
of nati onal uniform s t a t ist i cal repor t ing, whereby yardsticks
of comparabl e municipa l performance may be e stablished.
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�3.
B.
The Secre tary of Housing a nd Urban Development can tighten
ex isting regula tions to t h e end tha t mortga g e insuran c e a va ila b le through the Federa l Housing Administration for prop erty
acquisition, rehabilitation and improvement must be conditioned up on code complia nce. At t h e s ame time, mortgag e in s urance
a nd g rants under Section 312 ca n be promoted and exp edited .
Special personnel can be . designa ted in each insuring office of
the Federal Housing Administra tion with the specific assignment
of coordinating the insuring a ctivities of that ag ency with
city building departments and community organizations to the
end that provision of proper financing for complete rehabilit a tion to meet code standards be greatly expedited.
The Secretary of Health, Education and Welfare can, by admin istrative regulation, require that each local authority pa rticipa ting
in a dministration and disbursement of relief funds establish , in
collabora tion with a ppropriate local authorities, systems of housing inspection and certification to the end that appropriate withholding of rents 1 where justified , be undertaken.
1
C.
D.
All DBpartments of Government concerned with property acqui s ition,
wherever Fe deral investment is involved , can require tha t t h e acquiring public authority demonstrate and certify that no par t of
the a ward granted or payment made represents values achieve d by
. operation contrary to local codes - of building , health and safety.
All Depa rtments of Government dealing with the a udit a n d ver ifica tion of real estate and mortg age loa n a ssets ca n require ·cer tification t h at as to the property conc erned no complaints are present ly pending by any local authority charging violation of local minimum codes of building, health and safety.
IV
At this t ime property owners in deter ior ated or declining city areas
a ssume tha t the muniqipality either cann ot or wi ll not enf or ce it§
'b-u.ilding, tHH.teing, h lth and EH:U11tat on la.ws ...... an assum:Ption be.s~d
on experience a nd occ a siona lly support e d by Federal s t atement:
" Chara c t erist i c of a typi ca l s lum ar ea is t he over c rowding
of h ous ing uni t s well b ey ond the level s permi tte d by lo cal
cod es. Any ef fort to enf orce th e occupan cy s tan da r ds of
the co de would h ave as it s immed i ate con s equenc e a massive
displa cemen t of t h e famil i es occupy i ng the overcr owded units.
Thi s might b e a cceptable i f it wer e c oupled wi th a concurrent
pr ogram t o make a va i labl e t o suc h famil ie s de c ent housing at
prices t hey can a ff ord. Unf ortuna t ely, t he latter tends to
be far sl ower an d mor e co stly than the carrying out of c ode
enforcement . In many cases local cour t s have recognized
this consequenc e and, as a matter of public policy, have
refused to p ermit enforc ement action. ·
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I
f
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I
�"By its very nature, a program of code enforcement re quire s
property owners to make substantial investments in repairs
and improvements in order to avoid prosecution. Unless
that investment is coupled to an increase in rental r e turns
or property values, the owner is likely never to be able to
recover the cost. But since we are still dealing with a
seriously blighted area, neither the increase in rentals or
property values is likely to occur. The present tenants
usually cannot afford higher rentals, particularly if occupancy is reduced and there are f ewer wage earners to pay
the rent. Tenants with higher incomes usually cannot be
persuaded to move into a still blighted area. The value of
the property in a priva te sale cannot be expected to increase
unless the ~entals increase nor would the repairs or improvements add significantly to the property value in the event
of a future public condemna tion.
It has been argued that rig id code enforcement in deteriorated areas will so depress property values that new pu.rcha sers will be able to afford to make the necessary repa irs
without increasing rents. In fact, this does not happen on
any broad scaleo While our understanding of the factors
whi ch motivate owners of slura property is very limited, a
recent study does c ast some light on this. The larg e
'sophisticated' owners of slum property usually have so
little of their own money invested that any f easible reduction in cost of purchasing could not equal the cost of needed repairs. On the other hand, the small 'unsophistica ted'
investor is usua lly incapable of taking advantage of any
s uch economic effects.
i'In sum, it is our belief that concentrated code enforcement
by itself in badly blighted areas would result in more turmoil than improvement of housing conditions. But to s ay that
this one appr oa ch will not work is not a satisfac tory a nswer
to a very real and pressing problem. Althoug h we have not
yet arrive d at anything we regard as a n adequate sol ut i on,
it would be extremely v a lua bl e to pres ent some of t h e problems and p ossibl e approaches in order to get broader con siderati on." (Staff Report, Housing and Urban Devel opment,
forwarded by the Secretary to Senator John Sparkman, Chairman, Subcommittee on Housing, Senate Committee on Ba nk ing
and Cu~rency, 7/26/66)
The
a ssumpt ion b e comes a self- fulfilling prophecy:
A.
Property owners r e duce ex penditures for property maintenanc e a nd
repa i r wherever possible.
Bo
Tenant and commun i ty morale collapse .
C.
Construc tive community lea d e r s hip is deni e d c re dibility.
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�If it be assumed that power of stat e and local g overnment to regulate
housing condition in order to preserve life, health and safety i s a
prior charg e on all interests in prope~ty, then the equation as t o the
feasibility of property repair to minimum standard is simply whether
the gross rent roll will cover current operating expense, current taxes,
and principal and interest payments to cover the cost of repair. Antecedent mortgage commitments, as well as the equity investment, are irrelevant to the issueo Were mortgagees and property owners , con trary
to existing assumptions, convinced of this contingency, their conduct
concerning property repair and maintenan ce would be altered signif icantly. In these circumstances, it would not be necessary that public action be asserted against each property in a given neighborhood in order
to reverse the prior assumptions.
A formidable case exists, therefore, for selection of a few neighborhoods in which, after complete inventory of structure condition, ownership, mortgage debt , and prior history of code enforcement , an experimental progr~m be undertaken by the appropriate local public authority,
working in collaboration with the local community, in which a number of
the possible Federal sanctions here enumerated were employed. The effort is attractive in:
1.
Presenting a new attack upon the syndrome of community decline
and collapsea
2.
Offering promise of reduced public expenditures by imposing
costs upon non-conforming properties.
3.
Generating increased voluntary compliance with minimum codes
-and standards.
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