The post And the Oscar for best paper goes to… appeared first on Market Urbanism.
]]>The basic case for zoning reform, across the political spectrum, is that the rent is too damn high. Michael Manville, Michael Lens, and Paavo Monkkonen give a combative and accessible review of the evidence in their Urban Studies paper (2020). The principal drawback is that it is rapidly becoming dated, as evidence and research come in from more recent reforms. The most important of those may be Auckland’s, which Ryan Greenaway-McGrevy has reported in a few papers, including this Economic Policy Center working paper (2023). Using a synthetic control method (which is not perfect, to be sure), Greenaway-McGrevy finds that upzoned areas had 21 to 33 percentage points less rent growth.
A new candidate for the best review of the evidence on zoning reform and affordability is Vicki Been, Ingrid Gould Ellen, and Katherine M. O’Regan’s late 2023 working paper, “Supply Skepticism Revisited.”
Many authors from different disciplines have shown that both the intent and effect of zoning as practiced in the U.S. were racist and classist. That is, zoning policies have separated people by race, homeownership status, and income more than would have occurred in an unregulated market. Allison Shertzer, Tate Twinam, and Randall Walsh’s review of the evidence in Regional Science and Urban Economics (2022) is concise and helpful.
However, fewer authors have attempted to show that removing specific zoning restrictions reduces existing patterns of segregation. One is Edward Goetz, in Urban Affairs Review (2021). He makes a qualitative argument. I’m unaware of a good causal, quantitative paper showing how broad upzoning impacts local integration (but I would happily commission it if anyone wants to write it!)
Along some dimensions, it is quite straightforward to argue that zoning reform benefits the environment. In other contexts, there’s more tension between environmentalism and other goals of liberalization. Does allowing denser subdivisions on the edge of Texas cities increase or reduce carbon emissions relative to baseline? I don’t know.
The IPCC chapter on urbanism (2022) stands out as a consensus summary if not as a model of persuasive prose.
Zoning reform can deliver a large boost to economic growth and living standards. I hesitate to accept any particular number, but the best work is clearly in Gilles Duranton and Diego Puga’s Econometrica paper (2023). From their conclusion:
Zoning directly constrains the right to use real property. It’s hard to turn that obvious statement into meaningful research. Bob Ellickson has done so as effectively as anyone, including in a widely-cited exploration of alternative, lighter-handed approaches to solving the problems zoning is purported to solve (University of Chicago Law Review, 1973).
There’s also a strain of thought around “the right to the city” and self-expression through activities from art to business, which need to take place somewhere. These literatures include interesting gems, like Beckers and Kloosterman’s 2014 study of pre- and post-war Dutch neighborhoods, but none that can make for real inclusion here.
Property developers are almost always among the top donors to city councilmembers’ campaigns. As with segregation, this is a place where the problem is clearer than the solution. No recent paper can best Jesse Dukeminier and Clyde Stapleton’s 1961 classic in the Kentucky Law Journal, “The Zoning Board of Adjustment: A Case Study in Misrule.” I would welcome (and commission!) a paper testing whether broad upzoning (perhaps via state preemption) reduced corruption.
Add your own nominees in the comments!
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]]>The post Apples to apples housing cost comparisons appeared first on Market Urbanism.
]]>To put it another way, to compare Chicago and New York you should look at comparable neighborhoods rather than regionwide averages.
For example, one reasonable comparison might be between Chicago’s reasonably desirable inner suburbs and New York’s. I picked four suburbs that I have visited and that are reasonably close to city boundaries: Great Neck and Cedarhurst on the New York Side, Skokie and Evanston on the Chicago side. According to Trulia.com, the cheapest two bedroom condo* (other than one that clearly needs major renovations) in Evanston sells for $115,000 and the cheapest in Skokie for $165,000. By contrast, Great Neck condos start at around $350,000, and Cedarhurst prices are similar.
Similarly, elite intown areas are cheaper in Chicago. I looked at Chicago’s Lakeview, where I spent part of my honeymoon five years ago; two-bedroom units there start at $235,000. By contrast, in Manhattan’s Upper West Side such units start at $730,000 (not counting units that require extensive renovation or are income-restricted).
To sum up: regional averages do seem to reflect the reality of housing costs, at least in these two cities.
*I picked two bedroom condos for the somewhat arbitrary reason that I currently live in a two-bedroom apartment.
*
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]]>The post Poor People Move Too appeared first on Market Urbanism.
]]>But it seems to me that there’s an assumption hidden behind this idea: that the neediest people are the ones who are ordinarily most stable, and thus do not suffer from rising housing costs as long as they are protected by rent control or similar measures. For example, law professor Richard Schragger complains that pro-housing zoning reform will “redound to the benefits of investors and developers and not to those residents with limited resources who seek to afford to remain in place.” (emphasis added) In the next sentence, he adds that “those in the market for housing- including middle-class families, recent college graduates, and young families– are often priced out of high-cost urban markets. But reforms should be careful not to equate their interests with those of the working class and especially minority poor…” (emphasis added)* In other words, the “working class” and “minority poor” and people “in the market for housing” are somehow two separate groups.
This assumption might be persuasive if poor people moved less often than other people. But neither common sense nor data support this idea. If you are poor, you might be less likely to have steady employment, which means that your income is likely to be unstable. Thus, you are more likely than other Americans to be evicted or to move voluntarily even if rents are stable. Even if you rely on government transfer payments, you are at risk for bureaucrats questioning your eligibility.
What do the data show? Census Table S0701 shows that over the five year period between 2017 and 2022, 10.6 percent of persons with incomes below the poverty level moved recently within the same county, as opposed to only 6.1 percent of persons with incomes at or above 150 percent of the poverty level. 7 percent of poor Americans switched counties or states, as opposed to 4.7 percent of persons with incomes over 150 percent of the poverty level. Thus, a total of 13.1 percent of the poor moved, as opposed to 10.8 percent of the nonpoor. This is not a new development: between 2011 and 2016, 14.6 percent of the poor moved within a county and 7.2 percent switched counties or states, as opposed to 6.9 percent and 4.4 percent for persons with incomes over 150 percent of the poverty level.
What about in cities with extensive rent control? In New York City, everyone moved less, but poor people still move more. 10 percent of the poor moved within a county or switched counties or states, as opposed to 8.5 percent of persons with incomes over 150 percent of the poverty level. In San Francisco, 15.9 percent of the poor moved, and 13.6 percent of the nonpoor. (These statistics only include people who move into these cities, not people forced out by rising rents).
*My quotes are from page 129 of this article.
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]]>The post Milton’s Zoning Referendum appeared first on Market Urbanism.
]]>Well, until last week it was not that dramatic. East Milton is an old railroad-commuter neighborhood favored by affluent Boston Irish. It’s separated from the City of Boston by the Neponset River estuary and from the rest of Milton by a sunken interstate highway that makes it more congested and big-city than the rest of town.
In January 2021, Massachusetts passed the first transit-oriented upzoning law of the YIMBY era, now called “MBTA Communities,” “MTBA-C”, or “Section 3A”. Implementing regulations assigned a multifamily zoning capacity to each town.
Milton was always going to be one of the toughest cases for MBTA Communities. The northern edge of town is served by the Mattapan Trolley, which John Adams rode to the Boston Tea Party links up to the Red Line at Ashmont. The trolley makes Milton a “rapid transit community”, which means it has to zone for multifamily units equal to 25% of its housing stock. Among the dozen towns in the rapid transit category, Milton is the only one where less than a quarter of current housing units are multifamily; it also has few commercial areas to upzone.
East Milton voters went to the polls on Wednesday and led a referendum rebuke of the plan. In Ward 7, it wasn’t close: 82% opposed the rezoning.
The Boston Globe offered a helpful breakdown of the surprisingly varied voting:
There are several hypotheses as to why the neighborhood went against rezoning so hard, all probably played a role.
These reasons do not excuse East Milton. Its net multifamily zoning addition is so large because it has allowed so little multifamily housing in the past. The paucity of Black residents certainly suggests that prospective movers feel unwelcome.
The real man-bites-dog story in Wednesday’s vote isn’t in East Milton. It’s along the street named for the Puritan apostle, which parallels the trolley tracks. The town’s plan (map, ordinance) put as much of the upzoning as possible into commercial or already-multifamily parcels. What was left was absorbed by Eliot Street and Blue Hills Parkway, plus some side streets.
The Neponset River in this section divides a 70% white census tract from a 95% non-white one surrounding Mattapan station. In my teen years, I remember a desultory movement to have the Capen Street trolley stop closed out of concern for crime. I expected these residents to vote no: theirs were the only houses being rezoned, and they live at the bleeding edge of a stark color and culture line.
The plan rezoned these single-family neighborhoods to allow 3 units per 7,500 square foot lot, up to 2.5 stories. Few, if any houses would be worth scraping, but some might be subdivided.
On Wednesday, the ward including Eliot Street voted 67%-33% in favor. The wards on each side of Blue Hills Parkway were also in favor. I don’t have a theory of the case. One person I spoke to pointed out that it’s a more progressive neighborhood. Another obvious aspect is that people here bought a home along a trolley line – they knew they were living in a city.
Despite Eliot Street, “the town” failed to abide by MBTA-C. But who, exactly, failed? Is the town its staff? They worked exceptionally hard to comply. Is it the elected council, the Select Board? It complied. Or the representative town meeting members? They voted for the compliant plan 158-76.
But a state law allows voters to appeal the decision of a representative town meeting if they gather enough signatures. They did. In the resulting referendum, “the town” rejected “the town’s” decision.
I recently finished Lisa Belkin’s Show Me a Hero. You can take it as a tale about the racism or classism run amok, depending on which side you take. But I see it as a story about local democracy. The ruling in United States v. City of Yonkers didn’t just deconcentrate public housing, it also delegitimized a local democracy. The judge refused to make the hard decisions himself – he forced the city’s elected council to do so.
Whatever you may think of Milton, it is one of the world’s oldest continually-functioning democracies (362 years). It maintained its own militia and welfare system a century before the Declaration of Independence.
Democracies – local or sovereign – should not be omnipotent. Constitutional checks are vital at the top; hierarchical checks put guardrails around locals. Some areas of law are rightly outside local jurisdiction and the state can overrule a town.
But as Attorney General Andrea Campbell decides how to punish Milton for its failure to comply, she should keep in mind that no individual voter or representative should be forced to change his vote. The town can be overruled, but its democracy should not be mocked.
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]]>The post Houston as an Affordability Model appeared first on Market Urbanism.
]]>Following the hearing, I received a good question from Congresswoman Sylvia Garcia. She points out that, as in the country as a whole, the share of cost burdened renters has increased in recent years in Houston, in spite of land use liberalization. She asked what local policymakers could do to improve affordability for low-income residents.
When market-oriented housing researchers point to Houston’s relatively light-touch land use regulations as a model for other U.S. localities to learn from, its declining affordability may cause skepticism. Houston, however, has fared better than many other cities in housing affordability for both renters and homebuyers.
While Houston is the only major U.S. city without use zoning, it does have land use regulations that appear in zoning ordinances elsewhere, including minimum lot size, setback, and parking requirements. These rules drive up the minimum cost of building housing in Houston. However, Houston has been a nationwide leader in reforming these exclusionary rules over the past 25 years. Houston policymakers have enacted rule changes to enable small-lot development and, in parts of the city, they have eliminated parking requirements. In part as a result, Houston’s affordability is impressive compared to peer regions.
As the chart below shows, Houston has the lowest share of cost-burdened renter households among comparable Sun Belt markets for households earning 81% to 100% of the area median income. Only San Antonio and Austin have lower rates of rent burden among households earning 51% to 80% of the area median income.
At the least-well-off end of the income spectrum, Houston has the lowest rate of homelessness among major U.S. cities, due in part to its relative abundance of housing and in part to well-administered public and nonprofit services for formerly homeless residents.
The next chart shows that at the other end of the spectrum, homeownership is also more attainable to residents earning the region’s median income compared to the same group of Sun Belt metros shown in the chart above.
While Houston is a model of relative affordability, its housing market cannot serve its least-well-off residents without aid. As I interpret the evidence, the best way to improve housing affordability and housing quality for households that cannot afford adequate market-rate housing is with housing vouchers or other forms of income assistance targeted to the renter households most in need. The Housing Choice Voucher program improves important outcomes for the households that receive them. Compared to eligible households that do not receive vouchers, those that do suffer less food insecurity, less domestic violence, fewer child separations, and much less housing instability.
Dedicating resources toward vouchers allows dollars to go further relative to dollars dedicated toward new, subsidized housing construction because new-construction housing is generally the most expensive type. Relative to new construction that is fully or partially dedicated to residents of a specific income, vouchers open up opportunities for recipients to live in many different types of housing.
Policymakers in cities like Houston could provide a similar, locally-administered aid for extremely-low-income residents who are not receiving federal Housing Choice Vouchers. However, fiscal constraints and tax competition across local and state borders present challenges for providing this type of aid at the subnational level.
Due in part to the fiscal difficulties in providing costly aid at the local level, local policymakers tend to turn instead to policies to mandate income-restricted housing through programs that appear costless. Increasingly, local policymakers are implementing “inclusionary zoning” programs that require housing developers to set aside a portion of new-construction units as income-restricted. I’ve studied inclusionary zoning in the Baltimore-Washington region, which has the country’s longest history with these mandates. I find that in this case, localities that have adopted mandatory inclusionary zoning programs have seen greater increases in their median house prices relative to what they could have expected without these programs.
Inclusionary zoning can provide large benefits for the few residents who win lotteries for the units that they produce. However, inclusionary zoning provides a very small number of units relative to the number of households that qualify for them based on their income. Further, as I find, these programs can actually make housing affordability worse for the households that don’t specifically benefit from them.
The name “inclusionary zoning” implies that these programs are a reversal of the exclusionary zoning rules that exclude people from neighborhoods and localities on the basis of their income. In fact, inclusionary zoning depends on continued exclusionary zoning in order to function. These programs are typically paired with density bonuses that are intended to fully or partially offset the cost of providing income-restricted units. Without exclusionary zoning, these density bonuses would have no value, and inclusionary zoning would be a clear tax on housing construction.
Even in a city at the far end of land use liberalization, like Houston, the housing market may not adequately serve low-income residents. There is a role for policymakers to provide aid to extremely-low-income households. Expanding the Housing Choice Voucher program is one way to make progress toward improved housing affordability that carries fewer risks than programs that require market-rate housing construction to subsidize income-restricted housing.
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]]>The post Resources for Reformers: Houston’s minimum lot sizes appeared first on Market Urbanism.
]]>A concerted research effort has brought minimum lot sizes into focus as a key element in city zoning reform. Boise is looking at significant reforms. Auburn, Maine, and Helena, Montana, did away with minimums in some zones. And even state legislatures are putting a toe in the water: Bills enabling smaller lots have been introduced [in 2023] in Arizona, Massachusetts, Montana, New York, Texas, Vermont, and Washington. The bipartisan appeal of minimum lot size reform is reflected in Washington HB 1245, a lot-split bill carried by Rep. Andy Barkis (R-Chehalis). It passed the Democratic-dominated House of Representatives by a vote of 94-2 and has moved on to the Senate.
City officials and legislators are, reasonably, going to have questions about the likely effects of minimum lot size reductions. Fortunately, one major American city has offered a laboratory for the political, economic, and planning questions that have to be answered to unlock the promise of minimum lot size reforms.
Houston’s reduced minimum lot sizes from 5,000 to 1,400 square feet in 1998 (for the city’s central area) and 2013 (for outer areas). This reform is one of the most notable of our times – and thus has been studied in depth.
To bring all the existing scholarship into one place, I’ve compiled this annotated bibliography covering the academic papers and some less-formal but informative articles that have studied Houston’s lot size reform. Please inform me of anything I’m missing – I’ll add it.
M. Nolan Gray & Adam Millsap (2020). Subdividing the Unzoned City: An Analysis of the Causes and Effects of Houston’s 1998 Subdivision Reform. Journal of Planning Education and Reform.
Jake Wegmann (2020). Bayou City Townhouse Boom: Does Houston Have Something to Teach Us About Pro-Climate Urban Transformation? Platform,
The University of Texas at Austin School of Architecture.
NuNu Chang (2018). Planning the Houston Way, Part II: Special Minimum Lot Size. Rice Design Alliance.
Jake Wegmann, Aabiya Noman Baqai, and Josh Conrad (2023). Here Come the Tall Skinny Houses: Assessing Single-Family to Townhouse Redevelopment in Houston, 2007–2020. Cityscape.
Stephen Fox (2000). The Houston Townhouse. Cite: The Architecture and Design Magazine of Houston.
John Park, Luis Guajardo, Kyle Shelton, Steve Sherman, and William Fulton (2021). Re-Taking Stock: Understanding How Trends in the Housing Stock and Gentrification are connected in Houston and Harris County. Kinder Institute for Urban Research, Rice University.
Mike Mei (2022). House Size and Household Size: The Distributional Effects of the Minimum Lot Size Regulation. Working paper.
Gregory Dobbels and Suren Tavakalov (2023). Not in My Back Yard: The Local Political Economy of Residential Land-Use Regulations. Working paper.
Salim Furth (2021). Foundations and Microfoundations: Building Houses on Regulated Land. Mercatus Center Working Paper.
M. Nolan Gray and Salim Furth (2019). Do Minimum-Lot-Size Regulations Limit Housing Supply in Texas? Mercatus Center Research Paper.
Joseph Shortell (2022). The Effect of a Minimum Lot Size Reduction on Residential Property Values: The Case of Houston. Universitat de Barcelona master’s thesis.
Emily Hamilton (2024) addresses the same question by comparing land price growth in areas where minimum lot sizes were lowered in 2013 to areas where it had been lowered in 1999.
Nobody has critiqued or dissected Shortell (2022) yet. It is an excellent master’s thesis, but readers should bear in mind that it is student work and has not undergone peer review. Given the disagreement between these two papers – which both rely on assessment data – more research may be needed.
Samuel Brody, Russell Blessing, Antonia Sebastian & Philip Bedient (2012). Examining the impact of land use/land cover characteristics on flood losses. Journal of Environmental Planning and Management.
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]]>The post Hopefully, AI will create a perpetual housing crisis appeared first on Market Urbanism.
]]>Karl Marx divided the economic world into capital and labor. More recent economists have frequently (and self-regardingly) divided labor into low-skill and high-skill. In an AI world, we need to start talking about inscriptible and uninscriptible labor. I’m using a circular definition on purpose – AI will replace inscriptible labor because inscriptible labor is the type that AI is good at replacing – because I have only a fuzzy idea what AI will be good at.
(Why inscriptible rather than legible, in a James C. Scott sense? I thank Bard for the suggestion. Think about visual art – AI is probably no better than humans at guessing what nuances a human artist intended, but it can produce human-quality visual art rich with nuance. Since AI’s value is partly predicated on repetition speed, it will thrive in arenas where failures are costless. Thus, AI may be formulating 99% of new drugs in a few years even if nobody trusts it to perform a simple surgery. That’s an inscriptibility difference, not a legibility difference.
The most inscriptible human tasks are presumably those that simpler software replaced long ago, usually called “routine.” The big surprise of 2023 AI was the advances that software made with tasks we have considered creative. The “routine” concept was valuable as long as physical and informational machines advanced at comparable paces. But with informational machines far outpacing physical ones, it now seems that routine tasks handling physical materials are likely to be assigned to humans longer than non-routine tasks handling information.
Will any capital be replaced by AI? Other software and some intellectual property, sure. But most capital is buildings and vehicles.
Construction, especially low-rise residential construction, relies heavily on uninscriptible labor – individual workmen solving physical problems on a site-by-site basis.
To be sure, there have been and ought to be more productivity increases. But promising changes remain just out of reach. Factory-built housing is the Brazil of construction. And AI adds almost nothing to the relevant mid-20th century factory techniques. Besides, richer consumers (we’ll get to that) will want bespoke, not standardized, homes.
Looking upstream – softwood lumber growing and harvesting, Portland cement manufacture – one sees few obvious gains from better software.
Construction will gain a bit from the “ripple effect”: as people leave sectors where labor demand declines, more will enter construction.
But overall, construction productivity will be a laggard in an era of potentially – hopefully – high productivity growth. Any argument for a big AI effect in construction (e.g., via inventions) must admit even larger effects in most other fields. The robots will eat plumbers last.
In our hypothesized future, most workers will be more productive than they are today. (Some – I think of drivers – will experience so much productivity increase that they lose their jobs.) As consumers, most will face a world of higher wages (or, equivalently, lower prices).
This popular graphic shows how price levels have changed in 20 years. Overall inflation came in just below the price of housing over this period; average wages grew a bit more. AI, in our optimistic scenario, takes a big bite out of the eds-and-meds inflation near the top of the graph.
That’s great – but it will leave housing even more exposed as a productivity laggard.
So what do deep-pocketed consumers do when they have more money, fewer college loans, and lower medical expenses?
Economists have spent lots of time studying what happens to housing expenditures when people have more money. There are a range of estimates, each with its own nuance. A solid starting point is that the average share of income spent on housing is mostly constant across time and place, implying an income-expenditure elasticity of 1.0 (Davis & Ortalo-Magne 2011). A more optimistic estimate of that elasticity is 2/3 (Albouy, Ehrlich, and Liu 2016). A related estimate of the income-home price elasticity finds a U.S. average of 0.81, but with wide variation between cities (Oikarinen et al 2018).
Once we split rental and ownership costs out, it’s obvious that interest rates and timing luck for purchasers can move observed “affordability” metrics drastically:
Speculating, I predict that housing expenditure as a share of income will rise around these choppy trends. There’s no deep reason why it should be constant. If other major categories are cheaper (and the categories are complements), then expenditures should rise. The services we derive from “shelter” are also growing – a nice house today includes not only a home office but what could only be described to a 1960s family as a miniature cinema.
Obviously, there are two ways to spend more on housing: Buy more or better housing, or bid up the per-quality-adjusted-square-foot price. Oikarinen et al found what market urbanists expect: the home price elasticity was smaller in cities with a less constrained housing supply.
Higher per-square-foot housing prices are obviously going to hurt whoever is on the outside of this boom. And even higher-quality housing stock has historically made housing concerns more salient. I’ve illustrated this article with pictures of old houses. They’re cute, but they are far below modern legal and cultural standards.
In their short Mercatus book on high prices and Baumol’s cost disease, Eric Helland and Alex Tabarrok note that having a few high cost sectors is a price worth paying for progress:
There is nothing wrong with a future world in which consumers spend most of their income on live musical performances.
But people in 2040 or 2080 are no more likely than our own generation to be complacently grateful for their material abundance relative to the past. Our own YIMBY movement, after all, arose not from poverty but from constrained affluence. As I’ve pointed out elsewhere, the oddest thing about the “abundance agenda” moment is that it’s occurring at the most materially-abundant time in history (so far).
AI success will not extinguish the motives and causes of YIMBY v. NIMBY politics. Rather, it will deepen them. An AI-enabled world will produce even more people who fit the profile of YIMBY recruits. And, by raising the share of expenditure on housing, it will raise the stakes for both sides.
Among those left behind by productivity growth, housing will be – even more than it is now – the clearest outward signal of income inequality. The political and ethical stakes of the housing debate are going to rise, not fall.
Build accordingly.
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]]>The post The weird D.C. housing grift that’s sending a former FBI agent to jail appeared first on Market Urbanism.
]]>WASHINGTON – David Paitsel, 42, a former FBI agent, and Brian Bailey, 53, a D.C. real estate developer were sentenced today on bribery and conspiracy charges for their role in schemes involving confidential information held by the D.C. Department of Housing and Community Development
United States Attorney’s officeThere are plenty of housing laws you can break. But these grifters were busted only for bribing a city official for information. Otherwise, they used the housing law – the most innocent-sounding of all housing laws – correctly.
Washington DC has a strong Tenant Opportunity to Purchase Act (TOPA). When a landlord sells, tenants have the right to match any offer, conceivably buying their own building. That never happens. But TOPA also allows tenants to sell their rights to literally anyone else. The law treats the new owner of the TOPA rights with the same exaggerated deference as a tenant.
The TOPA grift goes like this: A TOPA shark, like Paitsel and Bailey, approaches tenants whose building is on the market. The “approach”, as I’ve witnessed it, can be a hand-scrawled note placed in the tenants doors or mailboxes. The tenants rarely know the mechanics of buying a house, let alone utilizing an obscure city-specific TOPA scheme that would have to involve collective action among many tenants.
So the sharks offer the tenants a few hundred dollars for their rights. If the offer is accepted, the shark informs the landlord.
Now suppose a prospective buyer comes along and offers $1,200,000 for a D.C. sixplex. The landlord must inform the shark, who now has the right to match any bona fide offer on the property. But the shark has no interest in buying – he just demands ten or twenty thousand dollars to surrender the rights.
If the landlord resists extortion, the shark finds ways to delay the sale until the buyer walks away. If he finds a misspelled address or other technicality in the landlord’s legally required communications, he can add time to the clock. The shark can force the landlord to wait up to 240 days for financing to be approved. Of course, if the landlord does wait all that time, the shark can just decline to purchase…at which point the entire charade begins anew.
More often, the landlord will submit to extortion – if not before the first prospective buyer walks away in frustration, then before the second does the same.
(Patsel and Bailey didn’t get in trouble for extorting landlords. That’s within the letter of the law. Instead, they were busted for trying to make their shakedown operation more efficient, buying the names and addresses of TOPA-notified tenants. The info presumably gave them an edge on their competitors who drive around with sticky notes seeking for-sale signs on small buildings.)
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