The Silver Lining to Empty Subsidized Apartments

Happy Tuesday and welcome to another edition of Rent Free. Given the Labor Day holiday, this week’s newsletter is a little abbreviated. 

Our stories include an item on the silver lining to be found in reports of high vacancies in federally subsidized affordable housing developments, and another terrible squatter case in Washington, D.C.

The Silver Lining to Empty Subsidized Apartments 

A recent story published by the Associated Press details double-digit vacancy rates of federally financed affordable housing units that are reserved for low-income renters.

It certainly sounds like a bad thing when, depending on the city, 12 percent or 16 percent of subsidized units are sitting empty. One would presume that below-market-priced housing would be oversubscribed.

The A.P. article identifies two related reasons why so many affordable housing units sit empty.

Laborious income verification requirements are a turnoff to tenants who otherwise qualify for the subsidized housing. Per their reporting, tenants in Austin, Portland, and Denver are instead opting to skip the paperwork and pay slightly higher market-rate rents. 

That would seem to be a silver lining in the whole story.

Tenants who do qualify for affordable housing are finding that unsubsidized market rents are affordable as well. Austin, at least, is the home of a famous building boom that’s brought prices down. 

When private production pushes prices down, more people are willing and able to forgo state assistance (and all the strings that come with it) to put a roof over their head. Fewer people in need of state assistance means less burden needs to be placed on the taxpayer. What public aid is provided can be concentrated on the neediest.

Sky-high housing costs in many American metros have convinced some policymakers that the market will never serve working-class renters. Empty subsidized apartments in Austin would suggest that’s not true.

Squatters Strike in D.C. 

Fox News has a new story on a Washington, D.C., property owner’s nightmare squatting situation.

Tatyana Day Velasquez is the owner of a three-unit row home in Columbia Heights. Per Fox, her basement unit has reportedly been taken over by squatters who were never invited onto the property. The squatters have now barricaded themselves in the unit, which has allegedly become the site of drug use and other criminal activity.

The D.C. police told Fox that the path to removing squatters goes through the district’s housing court, which takes months. All the while, squatters are in Velasquez’s apartment, causing damage and menacing the neighbors. 

Velasquez’s situation is unfortunately not unique. As I covered in a recent feature for Reason, a common experience for property owners with squatters is being told that they must sue in civil courts to remove the unwanted home invaders. 

That’s not inherently an unreasonable setup. Police called to squatting situations often face ambiguities about whether someone is a squatter or a lawful occupant. Sometimes courts are required to sort out whether someone is, in fact, allowed on a property or not. 

The real trouble occurs when the court process for removing squatters takes months, or, in extreme cases, years. That raises the benefits of squatting (people can claim free housing for months at a time). It also increases the damages suffered by property owners, who have to host uninvited, nonpaying, often criminal occupants for longer.

As squatting has become a more high-profile issue, states are changing their laws to criminalize squatting and create expedited processes for removing squatters so that owners don’t have to spend months in court hearings just to get their property back.

D.C. did recently reform its tenant laws to allow for faster evictions of nonpaying tenants and tenants accused of serious crimes. But clearly those reforms haven’t been enough to relieve Velasquez’s squatting situation.

Quick Links 

• Texas’ new law allowing residential development in commercial zones is working a little too well for some cities. Frisco officials are asking for state lawmakers to limit the scope of the law.
• Another day, another land use battle over a data center, this time in Montana.
• City Journal on New York’s post-9/11 resilience.
• Matt Yglesias on the unknowns of the data center debate.
• The Real Deal on the truth behind New York City Mayor Zohran Mamdani’s “transfer” of distressed rent-stabilized properties.