The True Cost of Evictions Run Deep
By Brian Wojcik
Evicting a tenant is an unfortunate reality that rental housing providers will face at some point. Far from being a simple transaction, the process is complex and costly, with independent investor housing providers reporting $48 billion in annual losses due to evictions, according to IRS data. Despite the rigorous and often lengthy procedures involving notices, negotiations, and attempts at resolution, the prevailing public image remains that of the heartless, wealthy landlord callously evicting a struggling family.
In reality, this stereotype of the “greedy landlord” is misleading. While it persists in the national consciousness, the narrative ignores the broader issues at play. Despite decades of well-intentioned housing policies, government assistance programs designed to offer safe and affordable housing can inadvertently trap renters in a cycle of poverty, while also causing financial strain for property owners.
Personal Insights into Poverty and Housing Instability
My understanding of these issues is deeply personal. Growing up in extreme poverty, my family faced multiple evictions and constant moves to avoid them. Poverty led to a host of challenges, including poor living conditions, hunger, health issues, lack of education, and household instability. The psychological trauma was profound, creating a perpetual state of distress that is difficult to comprehend unless experienced firsthand.
Systemic Issues Behind Housing Cost-Burdens
The very policies intended to ensure safe and affordable housing often act as disincentives for housing providers. Increased regulation and red tape make it harder to bring new, affordable properties to market. Independent investors, who account for 79% of all rental offerings, typically provide housing that is closer to the affordability needs of cost-burdened renters. These market-rate units, often of higher quality than government-subsidized housing, are crucial in addressing housing shortages.
The Fallacy of Government-Provided Low-Cost Housing
Contrary to popular belief, the private market is capable of supplying low-cost housing. Government-funded Low-Income Housing Tax Credit (LIHTC) projects often result in higher per-unit costs compared to market-rate units. Here are some quick stats:
- Per-unit costs range from $126,000 to $326,000.
- Only 50,000 low-income units were added annually between 2011–2015.
- Over 70% of these units require additional subsidies to be affordable.
- 95% of tax credits go to corporations, not individual investors.
In essence, it takes two taxpayer-funded subsidies to provide one unit of low-income housing at more than double the market rate cost.
Independent Investors as Advocates for Change
As the primary providers of low-cost housing, independent investors have a unique opportunity to drive systemic change. By advocating for themselves, their renters, and sensible supply-side policies, they can help alleviate the root causes of poverty and housing cost-burdens.
Effective advocacy starts with education and action. When you first became a property investor, you likely conducted extensive research and learning. Now, as a collective, independent investors can educate others and advocate for their renters. This shift in dialogue can reframe the narrative, highlighting the systemic issues that complicate housing availability and keep those in need trapped in their circumstances.
The True Villain: A Flawed System
The real issue lies within the system itself. Regulations and income-limit programs often prevent self-betterment for renters and impose unfair rules on housing providers. This over-regulation threatens both financial freedom for property owners and the well-being of renters.
Without an organized response from independent investors, the momentum of over-regulation will continue to grow. It’s crucial to unite and advocate for policies that support both housing providers and renters, ensuring a fairer and more effective housing market.
Let’s work together to transform the industry and create a future where everyone has access to safe, affordable housing.
Brian Wojcik is a housing industry advocate who transitioned into real estate, both as an investor and property manager, after more than two decades of experience in engineering, sales, executive management, and operational/business process reengineering consulting. He resides in Howard County, MD, where he volunteers to teach a “Tenant Success” program he created for Bridges to Housing Stability, and created Landlord411 to assist rental housing providers. His expertise of the independently-owned rental-housing market has been sought after for local and state level legislation/policy development. Mr. Wojcik has been published multiple times in national publications about legislative issues, affordable housing matters, and rental housing advocacy. He holds a Bachelor of Science degree in Manufacturing Management from Clarkson University and a Master of Science degree in Real Estate from The Johns Hopkins University. He is founder of diyRealty.co and the Federated Association to Innovate Rental Housing (FAIRH.org).
