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A group of Detroit tenants is hoping that a challenge to the way evictions are handled in court will dramatically improve housing conditions. Landlords warn this approach could destabilize the city’s already fragile rental market.
They might both be right.
The outcome could force thousands of landlords to address unsafe conditions. It could also reduce the number of homes available to Detroit renters, hike rents, and push some properties into foreclosure or abandonment.
The Detroit Tenants Union is suing the 36th District Court, where Detroit eviction cases are heard, in Michigan’s Third Circuit Court. The union argues that in nonpayment cases, judges should not allow landlords to collect rent or evict tenants when the property lacks a certificate of compliance.
The certificate is a legal requirement to operate a rental in Detroit, indicating that a property has passed a city-run inspection. Currently, only 14% of Detroit’s rentals are certified.
The union’s complaint argues that the 36th District Court cannot issue eviction judgments for properties that don’t have a certificate.
Steven Rimmer, lead organizer with the Detroit Tenants Union, calls the lawsuit the most direct path to compelling landlords to fix up their properties.
“Property owners continue collecting rent every month while tenants are forced to fight for the most basic living standards,” Rimmer said.
Some landlords, however, believe the litigation is misguided. Outlier Media spoke to three property owners who predicted that restricting rent collection for noncompliant properties would lead to foreclosures and rent hikes.
“There will be more abandoned properties, and more self-help evictions,” said Matt Temkin, partner at Greatwater Opportunity Capital, referring to the practice of evicting outside the court system. “Both of which are really bad for Detroit residents.”
John Roach, Detroit’s media relations director, said the city recognizes the urgency of the situation — for both tenants and landlords.
“There’s little doubt that prohibiting rent collection or eviction without C of Cs (certificates of compliance) will result in less available housing units and higher rents as landlords adjust,” he wrote in a statement. “On the other hand, the status quo of landlords ignoring the City Code has resulted in unsafe and uninhabitable conditions for tenants.”
The 36th District Court said through an attorney that it doesn’t comment on ongoing litigation. It’s asking for the case to be dismissed, arguing that judges should have discretion to weigh all the evidence, noting that the ordinance itself stipulates the court “shall determine if such breach excuses the payment of rent.”
Paying for safety
Rent in Alexis Hernandez’s home was relatively affordable when she moved there in 2021. But she was just 22, renting for the first time, and unaware that the $500-a-month price tag came with hidden costs.
Hernandez described lengthy periods when the house was without heat or hot water, and a leak seriously damaged the ceiling in her son’s bedroom.
Worst of all, her nine-month-old daughter tested high for lead in her blood last year. Subsequent testing identified lead hazards in the home.
The affordable rent, Hernandez said, was not worth it. She would have gladly paid much more to make it safe — or never moved in at all.
“If I had a crystal ball and knew all this stuff would have happened, I would not have moved here,” she said.
The home also didn’t have a certificate of compliance. It’s one of tens of thousands in Detroit without one.
Officials recently estimated there are around 85,000 rental properties in the city, but fewer than 12,000 have a certificate. Outlier Media and other news outlets have documented troubling conditions at dozens of noncompliant rental properties in recent years.
In Detroit’s nuisance abatement lawsuit against cryptocurrency real estate company RealT, none of the 408 properties mentioned in the complaint had a certificate of compliance. Other recent crises include nearly 100 tenants at Alden Towers going without heat last winter, and dozens of tenants being displaced after the city condemned the Leland House.
“The status quo of landlords ignoring the City Code has resulted in unsafe and uninhabitable conditions for tenants.” John Roach, City of Detroit media relations director Roach admitted the city has struggled to enforce its own rules.
“There’s certainly truth to the statement that the City and its policies have historically done a poor job of incentivizing landlords to bring their properties into compliance,” he said.
But, Roach added, the city is being more proactive. It updated the rental ordinance last year to streamline the inspection process. Last week, the city launched an initiative to send notices to landlords whose certificates are about to expire, and provide more personalized support to both landlords and tenants. The city aims to bring another 9,000 properties into compliance over the next year.
Cost vs. safety
One question looming over the lawsuit, and Detroit’s rental market generally, is how landlords will pay for decades of deferred maintenance.
Many landlords have told Outlier they’re already at a breaking point. Detroit has seen a string of high-profile foreclosures, receiverships and portfolio collapses in the past year, driven in part by high tax and insurance bills. The city’s old building stock makes maintenance more expensive. And Detroiters’ low incomes limit how much landlords can charge to cover expenses.
Sean Tidwell, founder of development firm Tidwell Group, predicted that many rental businesses would collapse if tenants stopped paying rent en masse.
“We already see a lot of these larger developments going into receivership,” Tidwell said. “There’s going to be much more, not just the larger developments, but a lot of these single-family, mom-and-pop investors.”
He added that bringing a single house up to code can cost $30,000-$40,000, and that he’d have to increase rent to pay for it.
Rimmer and the Detroit Tenants Union reject the idea that economic constraints justify unsafe housing.
“Tenants should not be held hostage by the threat that landlords might sell, raise rents, or leave if they are required to follow the law,” he said. “Safe housing cannot depend on whether accountability is profitable for landlords.”
Donovan McCarty, a lawyer for the union and the director of Michigan State University’s Housing Justice Clinic, argues that landlords should not be allowed to pass the cost of substandard housing onto tenants — who pay for it with their own health and well-being.
“If our housing market can’t sustain itself unless it does so unlawfully, that’s not a housing market that we can afford to have,” he said.
The next hearing for the lawsuit is on Sept. 21, when a judge could rule on the 36th District Court’s request to dismiss the case.
Clarification: This story has been updated to clarify that the lawsuit addresses eviction cases filed for nonpayment of rent.
This article first appeared on Outlier Media and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
