Speaker 1: Seven six if I have PERCV talk station. Very happy
Speaker 1: Wednesday to Jim Neale running for Sheriff. He'll be on
Speaker 1: at the bottom of the ar. In the meantime, I'm
Speaker 1: happy to welcome back to the fifty five Cassee Morning
Speaker 1: So Chief Operating Officer of the National Real Estate Investors Association,
Speaker 1: Charles Tassel. Charles, welcome back to the fifty five Carssee
Speaker 1: Morning Show. Great to have you on today.
Speaker 2: Thank you, Brian, good morning. How are you.
Speaker 1: I'm doing well well. I just feel like I got
Speaker 1: to qualify as far as the things over which I
Speaker 1: have controlled, Charles, I'm doing fine. Beyond that, I feel
Speaker 1: like I'm in a crisis. Anyway. Remind my listeners before
Speaker 1: we dive into the emergency rental assistance programs plural and
Speaker 1: how it affects runners and landlords, which is the topic
Speaker 1: we're talking about today, Remind my listeners what you do
Speaker 1: at the National Real Estate Investors Association.
Speaker 2: So we have about forty thousand members across the country,
Speaker 2: and what we do is really try to put teams
Speaker 2: together for investors people who want to invest in real estate,
Speaker 2: and really try to help them build a team so
Speaker 2: that they can maximize the value that they bring to
Speaker 2: the table and build wealth classically as we do in
Speaker 2: this country. And have you know this is the original
Speaker 2: hustle or side show. You know what kind of that?
Speaker 2: How do I make some money on the side. Yeah,
Speaker 2: you invest in real estate and it's a long term proposition.
Speaker 2: And guess what, you build up your community. You invest
Speaker 2: in your community, and you're helping people out who don't
Speaker 2: have the capital to get started in housing and in
Speaker 2: real estate, and you grow the country. That's what we do.
Speaker 1: It sounds like a great idea, great concept, and of
Speaker 1: course I like the capitalistic nature around it. Real quick again,
Speaker 1: before we get to the emergency mental assistance programs. What
Speaker 1: a city like Cincinnati has been struggling for years and years,
Speaker 1: as long as I've been paying attention, dealing with the
Speaker 1: problem of absentee landlords. You know, you got to have
Speaker 1: an apartment buil it's there to make you money. Hopefully
Speaker 1: you're taking good care of the tenants, you're keeping you
Speaker 1: providing them with electricity and water, and you're keeping the
Speaker 1: rodents and investation out. But there are a lot of
Speaker 1: them that don't. And when you go to try to
Speaker 1: find them and prosecute them. Otherwise hold them accountable under
Speaker 1: the laws that exist. They disappear, they change LLC structures,
Speaker 1: and you got to start from scratch. Is there a
Speaker 1: solution to that? I hate to put you on the
Speaker 1: spot for that issue, Charles, but it's one of those
Speaker 1: things that just drives everybody crazy.
Speaker 2: Well, so there's let me unpack that a couple of ways.
Speaker 2: So looks for Apartments Association for a couple of decades
Speaker 2: and we worked on this issue and just unpacking different
Speaker 2: pieces of it. One is which is what is the
Speaker 2: definition of an absenty landlord? Because some communities will say,
Speaker 2: you know, if you don't live in our community, you're
Speaker 2: an absentee landlord. That's the farthest thing from the truth
Speaker 2: right now. The realities are if you're not within I
Speaker 2: like to be able to keep eyes on the properties.
Speaker 2: They're within the driving range, they're short range. Most people
Speaker 2: that do investing will invest in a community or two.
Speaker 2: They know their area and that's where they invest, so
Speaker 2: they'll pick a community. They'll get to know what they know.
Speaker 2: You know, two blocks over is a problem. Two blocks
Speaker 2: this way is great. This is where I'd really like
Speaker 2: to move to. So that's one piece of it. But
Speaker 2: the other side is when you start going into building
Speaker 2: inspectors and police departments, they have the ability to go
Speaker 2: in and they have standing to go in and find
Speaker 2: out who owns that LLC because most properties owning an
Speaker 2: LLC right, And so the municipalities what we've encouraged we
Speaker 2: actually start We helped the city and the county actually
Speaker 2: get the official housing docket put together well back when
Speaker 2: they wouldn't talk to each other. That was one of
Speaker 2: the first steps. That way, you've got a focused effort
Speaker 2: to really address when there are complaints brought in. It's
Speaker 2: not hey, I'm dealing with you know, judge saying I'm
Speaker 2: dealing with a rape today, I'm dealing with a murder.
Speaker 2: I'm dealing with a delayed paint. What is this? You know? Well,
Speaker 2: the reason that's delayed paint is because this is one
Speaker 2: of the issues that came forward because the person isn't
Speaker 2: investing in their property and they're causing problems in the
Speaker 2: community and their deteriorating the property and materity values of
Speaker 2: not only their property but those around them. So we
Speaker 2: want to put the housing docket together. It's one of
Speaker 2: the first steps. But the next step is making sure
Speaker 2: that these cities and this is where like the City
Speaker 2: of Cincinnati has an attorney assigned to their police department.
Speaker 2: I believe I'll call him out right now, Mark Manny.
Speaker 2: He does a great job with this. You used to
Speaker 2: live in Deer Park with him, were neighbors. He is.
Speaker 2: His focus is to when the police say, hey, we've
Speaker 2: got a problem. We're getting calls or serviced at this property.
Speaker 2: He can then go, oh, there's the LLC. Now I
Speaker 2: have the ability to go in from a legal perspective,
Speaker 2: find out who the actual agent is, find out who
Speaker 2: the owner is, and get to the next levels of service.
Speaker 2: That's typically the barrier most municipalities run into, and they
Speaker 2: don't have the attorneys in illegal backing to help their
Speaker 2: people get to that point.
Speaker 3: Gotcha, So that's one that's a key step. Now you
Speaker 3: can actually got Okay, now I've got something to go after,
Speaker 3: because you know, prosecuting the nameless, spaceless LLC, even if
Speaker 3: it's you know, one person, only one house, it's very difficult.
Speaker 3: So that's part of what we're doing.
Speaker 2: Okay.
Speaker 1: I appreciate your addressing that and pivoting over, how does
Speaker 1: the the I think there are two ers emergency rental
Speaker 1: assistance programs collectively forty six billion dollars a tax payer
Speaker 1: money to help folks in need evictions, and you know
Speaker 1: sometimes it's utility bills that are behind or in arrears
Speaker 1: passed to just a variety of different assistance measures. With
Speaker 1: all of these billions of dollars, how does that translate
Speaker 1: into reality, Charles.
Speaker 2: Well, it's so eer money is actually running out. Most
Speaker 2: of those funds have all been expended, and the cities
Speaker 2: the counties are typically the ones that were handling those funds,
Speaker 2: and they had organizations do that for them. So they
Speaker 2: went in and if anybody had, let's face it, back
Speaker 2: in twenty twenty, it made a whole lot of sense.
Speaker 2: In twenty one, you'll see where people had some impact.
Speaker 2: They might have lost some housing and they're trying to
Speaker 2: catch up because they lost their jobs for a period
Speaker 2: of time. We're now in twenty twenty four, you know,
Speaker 2: saying you can't find a job in one of the
Speaker 2: you know, most businesses out there are looking for applicants
Speaker 2: all over the place, a little disingenuous, And really what
Speaker 2: we're finding is the ARA funds, there's a niche and
Speaker 2: we found this. So the Apartment Association has a outreach
Speaker 2: program and donated over about two hundred thousand dollars a
Speaker 2: year to local charitable interest you know, food pantries and
Speaker 2: stuff like that, but they actually help cover that rent shortfall.
Speaker 2: We found that people have missed rent for one of
Speaker 2: three reasons. Typically it's an auto issue, they lost a job,
Speaker 2: or they have a medical issue and that could be
Speaker 2: a medical issue for them or their kids. One of
Speaker 2: those three things. You about three to five hundred dollars,
Speaker 2: somebody falls behind and that you know, the budget doesn't
Speaker 2: quite match and now they're falling behind them rent. So
Speaker 2: that's where the initial funds that'd come in and help.
Speaker 2: And what happened was er money was an idea to
Speaker 2: come in and say, let's keep doing that and do
Speaker 2: it on a bigger and broader scale, kind of like
Speaker 2: the federal government does, and you know, they scooped in
Speaker 2: millions and billions and throw it out across the country.
Speaker 2: We still help on the charitable side of that, much
Speaker 2: smaller dollar amounts, but really focusing on folks who are
Speaker 2: getting that. That kind of bumped in the budget because
Speaker 2: let's face it, if we've got it more than half
Speaker 2: the country. We can't put a thousand dollars together an emergency.
Speaker 2: We're going to have people who have some sort of
Speaker 2: economic hickup, you know, finances don't work for whatever reason
Speaker 2: this month. And what we found is really only once
Speaker 2: once a year kind of thing. Typical family has this
Speaker 2: little kind of incident once a year at most, and
Speaker 2: those are the people we really want to try to help.
Speaker 2: That's where local funds, the local groups can help with that.
Speaker 2: Ear money's pretty much gone away. And what we're finding
Speaker 2: now is so like the vice presidents come out and said, hey,
Speaker 2: I want rent control. We need affordable housing. People can't
Speaker 2: afford that, and it's like, okay, there's there's you're conflating
Speaker 2: a whole bunch of issues, especially, start throwing around the
Speaker 2: word rent control as national rent control, and then, Brian,
Speaker 2: you'll appreciate this. The justification to do it was to say,
Speaker 2: we're gonna letit rent increases to five percent, okay, and
Speaker 2: if you don't do that, we're going to take away
Speaker 2: your ability to expense funds, which by the way, is
Speaker 2: one hundred percent through the Tax Cut in Jobs Act
Speaker 2: of twenty seventeen, which they already want to get rid of. Yeah,
Speaker 2: it's one of those things you're like, wait a second,
Speaker 2: you're gonna you're gonna use this as the incentive, but
Speaker 2: you're already getting rid of the incentive. In fact, it's
Speaker 2: only eighty percent in twenty twenty four, and it drops
Speaker 2: by twenty percent every year from here on out. So
Speaker 2: it's one of these disingenuous statements that's out there that
Speaker 2: just conflates the issue about rent control and what can
Speaker 2: be done. And you know it's pesky little thing called
Speaker 2: the temp Amendment.
Speaker 1: Oh yeah, there's that.
Speaker 2: So you know, rent control is you know, you know
Speaker 2: in Ohio that's been preempted. You cannot do rent control.
Speaker 2: You can't do it at the local level. You don't
Speaker 2: do at the state level. And our state has said
Speaker 2: we want to invest in the community. We want the
Speaker 2: municipal leaders to take the time to make sure that
Speaker 2: there's supply in their community for housing. That's really where
Speaker 2: you handle it, and it's not a quick fix or anything.
Speaker 2: It takes a while to build houses, It takes a
Speaker 2: while to go through the zone. It takes a while,
Speaker 2: and the longer it takes, the more costly it is.
Speaker 2: The more costly are housing it is. That's where affordability
Speaker 2: really comes in.
Speaker 1: Well, yeah, and California is a great example of that.
Speaker 1: I mean, just to build a house, a house like affordable,
Speaker 1: it's kind like a million dollars. I mean, the cost
Speaker 1: of supply is more expensive, the regulatory environment is outrageous,
Speaker 1: and you got all the edicts and mandates, and there's
Speaker 1: the nimbi reality you face when you're trying to build
Speaker 1: something because nobody wants a new house there. I mean,
Speaker 1: it's just it's also an insurmountable challenge. But you know,
Speaker 1: the reality is right now, I guess there is an
Speaker 1: insufficient supply of well, I don't even know what quote
Speaker 1: unquote affordable is. Is there actually a definition for that?
Speaker 1: Because I can't afford a house in San Francisco. There
Speaker 1: isn't an affordable house anywhere for me. But here there
Speaker 1: is what I would perceive to be, under my budget circumstances,
Speaker 1: affordable housing. But that's that the words they throw around,
Speaker 1: it's so loosey goosey. It's like, you know, what is
Speaker 1: a rich person? How do you define that? I mean,
Speaker 1: it just depends on where you live, doesn't.
Speaker 2: It a lot of it? Does you know? Midwest we
Speaker 2: still have some of the most affordable housing across the country.
Speaker 2: Certain by affordable in that terms we're really talking about
Speaker 2: it is obtainable. Can you actually obtained Can you work
Speaker 2: a basic forty hour week job? And the reality is
Speaker 2: in this area, if you've got two people who work
Speaker 2: forty hours a week at a basic ten twell fifteen
Speaker 2: dollars an hour job, they can get a one better apartment.
Speaker 2: In some places they're getting two better apartments. You know.
Speaker 2: So you know, I had a roomates when I came
Speaker 2: out of college because you know, I can't afford me
Speaker 2: own place, and part it was I wasn't sure I
Speaker 2: wanted to because riskiness of job and all that. As
Speaker 2: you get developed and you put your roots down and
Speaker 2: develop your value, you know, in the marketplace, you make
Speaker 2: more money and guess what, you can buy a bigger place.
Speaker 2: But to say that, you know, there's this false notion
Speaker 2: out there that we take the minimum wage, and the
Speaker 2: report that just came out for Ohio said take the
Speaker 2: minimum wage forty hours a week, Well, you can't afford
Speaker 2: a two bedroom house. It was like, of course, not
Speaker 2: you can't afford two bedrooms, but you could afford one
Speaker 2: in fact, if you worked a little extra, you could
Speaker 2: actually afford one in most places around Cincinnati, around the Midwest.
Speaker 2: That's part of the problem is we've got these people
Speaker 2: who are willingly complating things rather than actually trying to
Speaker 2: deal with the issue. So good.
Speaker 1: I was curious to know if they what you said,
Speaker 1: the funds are almost tapped out now, but the forty
Speaker 1: six billion in this emergency rental assistance, if are they
Speaker 1: arguing that we need to continue that program or those programs?
Speaker 1: I mean, every government program that's ever existed has never
Speaker 1: really ended. People get used to the infusion of money
Speaker 1: or the free stuff and things, and then they say, well,
Speaker 1: it's a it's a right basically.
Speaker 2: Well, Reagan had some great comments about that and about
Speaker 2: the inevitability of a never ending program by looking at
Speaker 2: the federal government. So yes, there's there's requests for that,
Speaker 2: and again there's a whole package of things. You can
Speaker 2: go back to. January of twenty three, the White House
Speaker 2: put out a Renter's Bill of Rights, which started laying
Speaker 2: out these kind of principles and they you know, they
Speaker 2: sound really innocuous until you try to implement them and say, oh,
Speaker 2: we're going to do leases well, they want to do
Speaker 2: leases at the national level, which means you take the
Speaker 2: most liberal version, so you take a California or Massachusetts
Speaker 2: or Maryland version and try to implement it. And by
Speaker 2: the way, you're doing it at the federal level, not
Speaker 2: the state level, where all all real estate and all
Speaker 2: landlord housing transactions are taken care of. And I really
Speaker 2: prefer to call them housing through housing providers, because I'm
Speaker 2: not the lord of any land. I would like to
Speaker 2: be the lord of my castle. You know, I don't
Speaker 2: have a castole either, And so we and there's actually
Speaker 2: a real fight to take away that word because they
Speaker 2: don't want to get rid of the word landlord because oh,
Speaker 2: you say landlord, we always think of, you know, mister
Speaker 2: Roper back from Three's Company kind of thing, yeah, you know,
Speaker 2: or something worse. And part of what Kamala Harris has
Speaker 2: come out with is she wants to go after what
Speaker 2: she calls quote unquote big housing. Her definition of big
Speaker 2: houses is if you own or invest in more than
Speaker 2: fifty units. So if you are part of a you know,
Speaker 2: doctors or engineers, and you're part of a sixty unit
Speaker 2: apartment building, you're part of your big housing gotcha, and
Speaker 2: you're part of the problem in this country. And that's like,
Speaker 2: it's just the farthest thing from the truth.
Speaker 1: Right, is it? That whole idea of going up to
Speaker 1: big housing that's built on the notion that there are
Speaker 1: big corporations out there that're going around buying up single
Speaker 1: family houses and then turning them into rental properties.
Speaker 2: You know, and there are some equity funds that out
Speaker 2: there doing it. Yeah, And they really got their taste
Speaker 2: of it in kind of eleven, twelve, thirteen, back when
Speaker 2: you know, there was foreclosures and there were long what
Speaker 2: they called tapes coming out of banks, a foreclosure list,
Speaker 2: and the bank said, I have to get rid of
Speaker 2: this because the fat is telling me to So will
Speaker 2: somebody buy this? And they were such large groups it
Speaker 2: was only equity groups that could afford it. Yeah, some
Speaker 2: of them have started to spin them off, some of
Speaker 2: them have maintained them and continued to grow since that.
Speaker 2: He's had issues with some as well, and part of
Speaker 2: the problem with that, and I'm happy to unpack that,
Speaker 2: but it's a little longer coming.
Speaker 1: Yeah, We're going to have to save that one for
Speaker 1: another day, Charles, since we are out of time. But
Speaker 1: I sure appreciate your willingness to come on the program
Speaker 1: to talk about this rather complex issue. Charles, and I
Speaker 1: know you know it is COO and National real Estate
Speaker 1: Investors Association. We will have Charles back on the program
Speaker 1: again to further dive into this issue. Charles, thanks again
Speaker 1: for your time. Have a wonderful, wonderful week. Stick around
Speaker 1: Jim Neill's coming up in the next segment bottom of
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