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The newspaper of The Johns Hopkins University September 12, 2005 | Vol. 35 No. 2
Low-End Rents: The Forgotten Crisis in Baltimore's Housing

Study suggests promising approaches for helping city's poor tenants

By Glenn Small

More than half the estimated 128,000 rental units in Baltimore City rent for $400 or less per month, the lowest in the metropolitan area, yet the city's poorest residents still have trouble finding housing they can afford to live in, according to a new study by Johns Hopkins University Professor Sandra J. Newman, who also directs the Johns Hopkins Institute for Policy Studies.

According to Newman's research — the first intensive look at the low-end housing market in Baltimore in three decades — there are two poor residents for every affordable housing unit in the city and more than 16,000 households on a waiting list for assisted housing.

What's worse, because 80 percent of the city's rental units are owned by "mom and pop" landlords — those who own only a few units — the low market rents are making it difficult for these landlords to maintain their properties, especially because program rules and these owners' lack of sophistication exclude them from competing for scarce rehabilitation funds.

"Baltimore has a serious affordability problem," Newman said. "But the problem arises because so many renters in the city are poor — and getting poorer — not because a shortage of rental housing has bid up rents to unattainable levels."

"Available and affordable rental housing is critical to the health of a community, and it is a particularly important issue for the poor," said Robert C. Embry, president of the Abell Foundation, which funded Newman's study. "The issue needs to be high on the community agenda and the subject of ongoing debate."

"Too many Baltimoreans just can't afford higher rents. Yet we must have higher rents if we are to improve the housing stock's condition," said Ed Rutkowski, executive director of the Patterson Park Community Development Corp. and one of five independent reviewers of Newman's study.

The ominous picture is painted by Newman in a monograph titled Low-end Rental Housing: The Forgotten Story in Baltimore's Housing Boom, which has just been published by the Urban Institute. It includes the following highlights:

Half of all rental units in Baltimore rent for less than $400 a month and only 15 percent for more than $600.

Nearly half of renter households with children are paying more than 30 percent of their income for rent — rents considered "unaffordable" given their incomes — yet more than four in 10 of them are living in physically inadequate housing.

Many of the problems are related to the age of the housing stock, which averages 50-something years in Baltimore, compared with 40-something for central cities on average and 30-something for U.S. housing overall.

More than 80 percent of Baltimore's low-end rental housing stock is in the hands of landlords who own fewer than five dwelling units.

Newman's study suggests a variety of promising approaches to helping solve the crisis she has depicted, including:

Create an affordable housing trust fund, comparable to the Maryland Affordable Housing Trust, to infuse vital capital into salvageable low-end rental properties. According to Newman's work, virtually none of the $95 million spent between 1999 and 2003 from federal, state and local sources to rehabilitate city rental units went to properties with fewer than five housing units.

Explore creative ways to address the ownership problem, ranging from engaging professional managers to transferring property from individual to institutional ownership through small multifamily real-estate investment trusts, or S-REITs.

Find better ways to coordinate the city's efforts to address physically inadequate housing, perhaps through a demonstration project. Currently, the city's efforts — code enforcement, lead-based paint abatement and rental rehabilitation programs — operate independently, and small owners are excluded.

Revamp and improve Baltimore's Section 8 voucher program to make it more efficient and attractive to landlords. If that fails, the city should consider privatizing the program, Newman said.

For any of these policies to work in the long run, Newman suggests that the city would be wise to develop more accurate and recent data on the issue, as well as develop methods for evaluating housing programs.

"Timely and accurate data would allow program designers and policy-makers to better understand this market and to answer critical questions about underlying problems, not just symptoms," Newman said. "CitiStat [an accountability tool used by the city] provides an excellent vehicle on which to build. But much still needs to be done to finish the job."


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