And I’m a Democrat

Before I was born, I was an Eisenhower Republican.  I didn’t care much about ideology.  I supported politicians who were good managers who rewarded competence and punished corruption, a domestic policy that favored growth with a social safety net, and a foreign policy that cultivated alliances with democracies and stood up to dictators.  The Republican party was not perfect, but it did that better than any of the alternatives.  Then, Nixon said that it was OK to be racist.  Reagan trashed the social contract.  George W. Bush courted the jihadi Christian right, and Trump told the mouth-breathers that it was OK to MAGA.  So I looked to my right and to my left, and realized that I was a Democrat.

The manufactured housing industry skews MAGA.  When the boys from Clayton delivered the TRU homes to my park in northern New York, one said, ‘Y’all have rednecks up here?’

I looked at Mike, the manager of that park.  He wears steel-toed boots, says nasty things about Kathy Hochul and takes his son deer hunting.  The evening before, a resident named Webster had told me that you have to be careful not to cut your own hands when you gut a deer, because it is difficult to tell the difference between deer tissue and human tissue when both arms are elbow-deep in warm deer guts.  I said, ‘Oh, yeah.  We have rednecks’

‘But y’all don’t have hillbillies.’

‘Depends on what a hillbilly is.’

‘You a Democrat?’

I looked at the four beards, four ball-caps and three hanging beer-guts and said,

‘Yeah.’

‘What do you drive?  I’m gonna put a sign on your car that says ‘I love Trump’s butt’’.

‘I don’t think Melania would say that.’

The guy pulled his phone out of his pocket, glanced at it and said, ‘We can’t even turn on our phones unless we are in park.  Now that we’re stopped, I’m gonna watch some midget porn.’

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Two years ago, I did some desultory due diligence on a park in Missouri.  When I spoke with the manager, we commiserated about utilities.  I told him that I own a park in central New York with private water.  I said, ‘When I started charging for water, one of the tenants said, ‘You get water for free.  Why do we have to pay for it?’’

The manager laughed and said, ‘Hah, hah – he must be a Democrat!’

I paused and thought, If I tell him that I am a Democrat, he will think that I am an atheist Jew from New York with a trans child.  Then I thought, what the hell – it’s true, after all. I said, ‘I’m a Democrat.’

I could hear a shocked silence on the other end of the phone.  Show me a Missourian with his foot in his mouth, I thought.

‘But even I think that is idiotic’, I said.  ‘The electricity to run the system isn’t free.  Wear and tear on the well, the pump and the tank isn’t free.  Salt for the water softener isn’t free.  The chlorinator isn’t free.  Someone has to pay for it.’

The guy made some laughing noises that meant, Maybe I didn’t make too big of a faux pas.

‘I think that’s crazy, I said.  ‘And I’m a Democrat.’

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A recent article in Curbed reported that some New York City landlords are now reporting rent payments to credit agencies.  The subtext of the article is, How dare they?  My response is ‘Dude.  It’s about time’.

I encourage readers to follow the link to read the article in situ, but here are a few quotes, with commentary:

While landlords have long been able to report tenants’ payments, few did so. But now, housing and consumer advocates say that they’ve seen more of them use the threat of hurting tenants’ credit scores since pandemic-era eviction moratoriums and stronger rent laws passed in 2019. “Landlords are looking for any sort of stick that they can use as a collection tool without having to go to housing court,” said Tashi Lhewa, a Legal Aid Society attorney.

Credit reporting is a way that owners can use transparency to get residents to honor their agreements. That is a good thing.  Truth is good.  People should honor their agreements.  A tool that gets people to do what they should do is a net positive.  Contracts should have teeth.

Property owners are the only business owners who have to provide services to customers who don’t pay.  If you don’t pay your tab at a bar, the bartender will cut you off.  Strippers don’t dance on the laps of guys who don’t tip.  Insurance companies cancel coverage for people who don’t pay their premia.  If you don’t pay a contractor, he will stop banging nails.  Banks call mortgages when borrowers default.

Property ownership is different.  It can take months to get rid of a tenant who doesn’t pay.  Sometimes, such as during the pandemic, it can take forever. In the interim, you have to deliver your service for free.  This was exacerbated by the restrictions on evictions imposed by the Nakba law of 2019.  

So – yeah.  Credit reporting is a tool that property owners can use to get residents to honor their commitments.  They can function both as a carrot and a stick.  Vive la carotte!  Vive le baton!

The notices, like the one sent to Deborah, often frame the reporting programs as a good thing. It’s true that for much of the population that is underbanked, rent payments might be one of the few ways they can build credit. (Reporting on-time rent payments has been an initiative pushed by lenders like Fannie Mae and former comptroller Scott Stringer.) But negative credit reports can be disastrous for most major life milestones — getting approved for a new lease, buying a car, mortgages, loans.

Per supra, contracts should have teeth.  Teeth sometimes hurt.  That’s why Jezebel’s tagline was ‘Sex, celebrity, politics with teeth’.

“It’s almost like a bullying technique,” said Knight.

Credit reporting is the use of data as leverage in a negotiation with a recalcitant counterparty.  If that is bullying, the definition of ‘bullying’ is so broad as to be meaningless.  I have had residents who could pay but chose not to during the pandemic because I did not have a remedy.  Other residents have milked the statutory cushion that the Nakba legislation gives them by, e.g. paying at the end of the month, every month, staying for free for the full three-to-four months allowed by Section 233, moving people not named on the warrant into the unit after the court date, changing their name so that it did not match the name on the warrant, and teaching their children every step of what they do.  If we define ‘bullying’ in Knight’s sense, I have been more the victim of bullying than a resident whose late payments are reported to Equifax.

Currently, it is illegal for a landlord to blacklist tenants — essentially, refuse to rent to someone because they’ve been to housing court — but advocates fear that downgrading someone’s credit rating may be used as a way to get around that law, since most landlords look at credit to determine whether or not to rent to someone. “They could say it’s because they don’t think the person can pay the rent because they have a poor credit history and it’s not related to them being sued,” McCune said.

True, and right on.  One of the craziest provisions of the Nakba law is that it prohibits property owners from refusing to rent to a prospective resident because the resident has been evicted in the past.  That is insane.  A potential customer’s past performance is the best predicter of their future behavior.  That is particularly important in a manufactured housing community, where residents live in close proximity to each other.  It is my responsibility to deliver clean, safe and affordable housing to the ninety-five percent of the residents of my parks who obey the social contract.  It is not fair to for me to ask that an old lady, a young family, a multigenerational immigrant family, or a lesbian couple who have never bothered anyone live next to a bunch of deadbeats, a meth lab or a pitbull farm.  For me to provide my customers with the service they pay me for, I need to do due diligence on potential neighbors.  But the best way for me to do that – by researching their past performance in similar situations – is prohibited by the Nakba law.

Banks don’t lend to people who have defaulted on loans.  Insurance companies raise premia for people who crack up their cars.  Caltech and MIT deny admission to people who flunk math tests.  Property owners are prohibited by law from doing likewise.  That is an unjust, irrational law. The use of credit reporting attenuates the injustice created by the law.

In the past, said Mary McCune, a lawyer at Manhattan Legal Services who is advising the tenants in Deborah’s building, she’s seen landlords offer rent reporting as a voluntary option. But now, more and more are unilaterally enrolling their tenants. … At minimum, Lhewa believes that there should be a legislative fix that ensures rent payments can only be reported if tenants opt into it.

Now we are past Kafka and have entered Etgar Keret territory.  Imagine a society where only criminals who opt in to the criminal justice system are punished.  In such a society, people planning a school shooting or a bit of domestic abuse would opt out of the enforcement mechanism before engaging in harmful behavior.  The result would not be optimal for society.  Nor would opt-in credit reporting.  Incomplete data distorts the truth.  Contractual obligations need to be enforced uniformly.  Without uniform enforcement of contracts, there is no reason for parties to enter into contracts in the first place. 

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Until now, I have not reported payments to credit bureaus.  Like any process, it costs money and is not seamless.  That said, the article has inspired me to look at ways to begin doing so.  I understand that it is not possible to report payments directly, but some third-party providers help property owners do so.  A few have an API that feeds into Rent Manager.  It would be a worthwhile thing to do even if it costs a few hundred bucks a month.  After all, I believe that people should be rewarded for good behavior and punished for bad behavior – and I’m a Democrat.