The Paletz Law Blog

Taking Away Private Property Rights is Not a Solution for Michigan’s Homelessness Dilemma

In an April 29, 2023, Detroit Free Press editorial, tenant advocates wrote that Housing Choice Vouchers, a government program, should be expanded in Michigan. Their premise is that multiple bills now being considered by the Michigan Legislature “could be a game changer for struggling families in Michigan.” These bills, however, would force rental housing providers/landlords to comply with a new set of source of income laws and expand federal voucher programs. The truth is that these bills by themselves are not a solution. They encroach on the rights of property owners and infringe on the constitutional right to freely enter into a contract. In addition, they attempt to create a wholly arbitrary set of new rules for the landlord, cloaked under the false assertion of creating a new “civil right.”

If passed, these bills would represent another example of a governmental taking of private property without compensation, in conflict with the fundamental construct of how this nation was formed. Private property owners, including multi-family housing, have just gone through two years of pandemic-inspired eviction moratoriums where they legally could not enforce their rights to reclaim their properties if a tenant failed to pay their rent. While I believe source of income laws are well-intentioned, and we must address aiding lower income families, these laws are replete with additional administrative and financial hurdles for property owners. It is this issue that deters landlords from participating in voucher programs.

If the true intent was to provide housing for unhoused individuals and put more monies in their hands, then the solution should be and is a simple one. Do not require landlords to fulfil certain requirements when they choose to lease their rental properties to a participant in a voucher program. Once a participant is vetted by the agency to prevent waste, fraud, and abuse, then the funds provided by such a housing program should be provided to a landlord without any strings attached. There should be no invasion of their private property rights nor any intrusion in their contractual rights.

Although typically glossed over or not even addressed by tenant advocates, is the adverse impact current requirements of housing choice voucher programs have on the majority of landlords who own, on average, only three properties (Smartmove). These “Mom and Pop” owners do not have a large staff or the resources to fill out reams of government paperwork for a prospective tenant, nor engage in time-consuming email or telephonic communications, or subject their property to the frequent inspections required to be able to take these vouchers as rental payments.

Legislatively enacted “one size fits all” edicts do not work in a state like Michigan, which is highly diverse between urban, suburban, and rural areas. Plus, in participating in these programs, property owners are forced to give away their right to terminate the lease at the end of the contract term. In other words, an end to “at-will tenancy.”

If this agenda is forced upon multi-family property owners, it will undoubtedly adversely affect out-of-state and international investors in Michigan property who seek the best rate of return on their money. Restrictions on private property ownership like these will force them to go to another less-restrictive state. Thus, impacting the overall supply of housing available to individuals and families.

As an example, the City of Dayton, Ohio, recently began approving new legislation requiring all multi-family property owners to accept Section 8 funding. The president of the Dayton Realtors, Greg Blatt, was quoted as saying, “If this legislation passes, you’re going to put a redline around the city of Dayton, and you’re going to send a message to every investor outside of the city that the city of Dayton is closed for business, that if you come here, it’s a high-risk environment.”

Bottom Line: There needs to be a serious conversation about preventing homelessness, especially for low-income individuals. But, there are certainly more reasonable and workable solutions than taking private property rights away from property owners to do so.