Is the rent really too damn high in Salisbury?

Facing his final few months as Salisbury’s mayor, Jim Ireton decided to be Santa Claus. You know the old adage about a democracy lasting until the people figuring out how they can vote themselves a piece of the treasury? This is really a proposal for the 2018 Ireton campaign.

In a Facebook posting, the mayor explained his reasoning.

Today I announced that I will forward to the City Council a Rent Stabilization Initiative aimed at bringing rents in Salisbury into line with national averages. This is a common sense step which will have very real results for residents who find themselves living paycheck-to-paycheck, struggling to make unnecessarily exorbitant rent payments. I was asked by someone earlier today “Why now?”

Here’s why:

  • 59% of renting households are cost burdened, and 36% of households are severely cost burdened, i.e. paying 50% or more. This means that over 1,600 Salisbury households are paying between 30% and 50% of their income for rental housing costs, and an additional 2,700 households are paying over 50% of their income for rental costs.
  • The lack of affordable housing in Salisbury has a quantifiable negative impact on our local economy. High cost burden means households are spending less on food, transportation, health care, and apparel, while accruing little-to-no wealth. If housing was affordable for all renting households, an additional eight million dollars a year would make its way back into the local economy.
  • From 2000-2008 rents rose dramatically, over taking the national average, as a result of increased energy costs and a doubling of the average home price.

If we want and expect to do better for the people in this City who are hurting the most, then we cannot shrink from this tough discussion -and I can tell you that I won’t. Our residents pay far too much for the quality of the rentals that they live in, and far too many of them are severely cost-burdened. In the end, renters know when they are paying too much in rent; it’s when there’s no money left on the 2nd of the month. We have tried endlessly for 30 years to address the problem of the greed of the rental industry in Salisbury. This Rent Stabilization Program is good for our residents, good for the local economy, and will allow the City to get a return on the investment it makes in its citizens.

It’s small wonder that there’s a chorus of renters who agree. They think they are getting something for nothing but what they will get are fewer choices or more substandard dwellings.

But let’s look at some of these claims. Ireton says that a large percentage of renting households are overburdened. However, his proposal only addresses individual houses, not multi-family dwellings, so only some portion of the population would benefit. We aren’t given the number who would actually be affected.

And I still can’t quite wrap my head around how additional money makes it into the local economy, because it’s not really additional money. The renters aren’t making any additional money on the deal. Granted, they may gain some choice on where to spend it but this is pretty much a zero-sum game.

Ireton is playing the old class envy card here, pitting poor, struggling renters against a class of businesses his allies derisively refer to as “slumlords.” It’s a convenient target to evoke sympathy, but one tends to forget that these businesses and individual homeowners are also investors in the community. The $8 million the renters save isn’t just sitting in their pockets – they are paying workers to oversee their properties, spending money on upkeep, or, as individual homeowners who depend on rental income, they buy food, transportation, health care, and apparel too.

Let’s imagine for a moment that this initiative passes – and given the current composition of City Council I could see three votes to make it happen. What incentive is there for people to invest in housing if the return is arbitrarily limited by the assessed value of the house, something that’s determined on a triennial basis? Once a house is maxed out on rent, in effect the price is frozen for the remainder of the three years unless the city benevolently changes the formula.

In the meantime, the decrease in money coming in makes investment less worthwhile, so housing prices will sag. Arguably that’s good for renters who may want to purchase a house, but the house they get may not be in as good of repair as it could have been because less money came in to make repairs, just the essentials to keep it up to code. It’s the small mom-and-pop investor businesses which would be hurt the most by this law because the rental companies can increase the rent on those dwellings they own outside the city limits.

The solution for homeowners may be that of subdividing larger houses into apartments where possible. Certainly that’s not an elegant solution and I suspect the various housing boards may look a lot more severely at these efforts because it’s a way of skirting a bad law.

It’s just the latest chapter in the Ireton war on landlords. He may think he can bring Salisbury up from poverty but instead it will just change the distribution of wealth slightly, eventually make affordable housing more scarce, and discourage investment – or, as Ireton calls it, “greed.”

My friend Muir Boda has his own thoughts on the process, and notes that College Park dropped its program a couple years ago. I agree with his main point, though: instead of using government to bring one class down in the attempt to raise another, why not try to add value by attracting the kind of economic development which can make fewer households “cost burdened.”

Perhaps that should have been Ireton’s plan all along.

Comments

One Response to “Is the rent really too damn high in Salisbury?”

  1. Anonymous on September 30th, 2015 4:44 pm

    Is this serious? Pay attention to the commentary. All city council members are saying this is ridiculous. 3 votes?!? There’s no precedent for that. This has no chance to make it out of work session. This has no chance to even get one vote.

  • I haven't. Have you?
  • 2018 Election

    Election Day is November 6 for all of us. However, Delaware still has to get through its primary on September 6.

    Maryland

    Governor

    Larry Hogan (R – incumbent) – Facebook Twitter

    Shawn Quinn (Libertarian) – Facebook

    Ben Jealous (D) – Facebook Twitter

    Ian Schlakman (Green) Facebook Twitter

     

    U.S. Senate

    Tony Campbell (R) – Facebook Twitter

    Arvin Vohra (Libertarian) – Facebook Twitter

    Neal Simon (Unaffiliated) – Facebook Twitter

    Ben Cardin (D – incumbent) – Facebook Twitter

     

    U.S. Congress -1st District

    Andy Harris (R – incumbent) – Facebook Twitter

    Jenica Martin (Libertarian) – Facebook Twitter

    Jesse Colvin (D) – Facebook Twitter

     

    State Senate – District 37

    Addie Eckardt (R – incumbent) – Facebook

    Holly Wright (D) – Facebook

     

    Delegate – District 37A

    Frank Cooke (R) – Facebook

    Sheree Sample-Hughes (D – incumbent) – Twitter

     

    Delegate – District 37B (elect 2)

    Chris Adams (R – incumbent) – Facebook Twitter

    Johnny Mautz (R – incumbent) – Facebook Twitter

    Dan O’Hare (D) – Facebook

     

    State Senate – District 38

    Mary Beth Carozza (R) – Facebook Twitter

    Jim Mathias (D – incumbent) Facebook Twitter

     

    Delegate – District 38A

    Charles Otto (R – incumbent)

    Kirkland Hall, Sr. (D) – Facebook Twitter

     

    Delegate – District 38B

    Carl Anderton, Jr. (R – incumbent) Facebook Twitter

     

    Delegate – District 38C

    Wayne Hartman (R) – Facebook

     

    Delaware

     

    U.S. Senate

     

    Republican:

    Rob ArlettFacebook Twitter

    Roque de la FuenteFacebook Twitter

    Gene Truono, Jr. –  Facebook

     

    Libertarian (no primary, advances to General):

    Nadine Frost – Facebook

     

    Democrat:

    Tom Carper (incumbent) – Facebook Twitter

    Kerri Evelyn HarrisFacebook Twitter

     

    Green (no primary, advances to General):

    Demitri Theodoropoulos

     

     

    Congress (at-large):

     

    Republican:

    Lee MurphyFacebook Twitter

    Scott Walker

     

    Democrat (no primary, advances to General):

    Lisa Blunt Rochester (D – incumbent) – Facebook Twitter

  • Categories

  • Archives

  • Link to Maryland Democratic Party

    In the interest of being fair and balanced, I provide this service to readers. But before you click on the picture below, just remember their message:

  • Part of the Politics in Stereo network.