Targeting Predatory Leasing Practices

On Wednesday, October 6th, 2004 Cincinnati became one of the first cities in the country to pass legislation targeting the practice of predatory leasing (by a 9-0 vote). I, along with Vice-Mayor Reece, co-sponsored the legislation, and we are confident that the new law will help bring much needed stability to Cincinnati’s neighborhoods.

I would first like say that the process of developing these new laws was the very definition of collaboration and cooperation. It could not have happened without hours of work by various neighborhood groups, the Legal Aid Society, the Northern Kentucky Greater Cincinnati Apartment Association, the Real Estate Investors Association, State Rep. Steve Driehaus, the Vice-Mayor and outstanding work by the city’s Law Department.

Right now, one of my primary focuses is on improving the city’s abysmal 39% homeownership rate. I believe homeownership holds the key to long-term reductions in crime, and long-term increases in business and community re-investment. As I began to examine the many factors contributing to our low homeownership rate, it became clear that we would have to tackle increases in predatory leasing practices.

Predatory leasing typically takes the form of illegally structured or unethical lease-option contracts. When done properly, lease-options can be a legitimate vehicle for homeownership. In such contracts, tenants agree to pay the landlord an up front option fee giving the tenant the right to purchase the house at a fixed future date. The option fee is non-refundable, and is collected in addition to any security deposits, monthly rent and other fees associated with typical rental agreements.

Real estate investors opposed to the new legislation argued that lease-options were one of the few ways that persons with bad credit could become a homeowner. The problem with their argument was that, by their own admission, only an extremely small percentage of these contracts ever resulted in a sale. Most resulted in evictions rather than homeownership. Alarmingly, over the course of many meetings and hearings we did not hear from any tenants or homeowners who had benefited from a lease-option.

Over the past few years, neighborhood groups began to notice a significant increase in suspect contracts, which destabilized neighborhoods and increased blight. At the end of this process it became obvious to Councilmembers that predatory leasing was having a devastating impact on both individuals and communities. Tenants were victimized by improper eviction and financial loss, and the community was victimized by high turnover rates and deteriorating property conditions.

The new legislation is designed to deter these suspect practices by capping option fees, requiring disclosure of property conditions, requiring landlords to provide prospective tenants with an educational pamphlet on lease-option contracts, and by ensuring that tenants are not responsible for major repairs.

Capping option fees proved to be the most controversial, but also the most necessary part of the new laws. By charging exorbitant up front fees, investors could make a large amount of non-refundable money immediately, thereby eliminating their incentive to continue the rental contract. It was in their interest to find an excuse to kick the tenant out and then begin the process again so that they could receive another large option fee.

In the end, I strongly believe that we have arrived at a compromise that works for every honest investor as well as for tenants and communities. Investors argued that only lease-options resulting in home sales were profitable to them. If this is the case, then capping large option fees should not be an issue, and should actually allow tenants to keep more money for rental payments, thereby increasing the chances of making it to the sale. Selling homes through lease-options is not helpful if most never actually result in sales. Through this new legislation, we will discourage predatory practices while encouraging legitimate home sales that can lead to real neighborhood revitalization.

Cole's Pool Pass Program Is a "Splash" Hit With Area Kids

Millvale – While some children splashed happily away, others looked longingly from a distance, hands and face pressed resignedly against the chain link fence separating them from their comrades. Although the fence served as a physical barrier separating the onlookers from the community pool, the real obstacle was the $5.00 swim fee.

As she toured around the city, Councilmember Laketa Cole found similar scenes in other city neighborhoods. Although the Cincinnati Recreation Commission (CRC) opened city pools on Monday, June 7th, many remain underused because neighborhood children cannot afford the $5.00 swim pass. Disheartened by this news, Ms. Cole decided to start her Pool Pass Program.
On Tuesday, June 15, six Millvale children experienced the refreshing blast of a hot summer day’s swim for the first time. The children were issued swim tokens from CRC staff at the Millvale Community Center after Councilmember Laketa Cole donated money to cover their swimming fees.

As the children were presented with their tokens, Cole issued a challenge to area residents, asking citizens with the means to sponsor at least two children for the summer by donating to her Pool Pass Program. The program collects donations from residents to cover the cost of swimming passes for children who cannot afford even the modest $5.00 fee charged by CRC.
“I think it’s crucial that kids have access to things like pools that make summertime a fun time,” said Cole. “The city tries to provide resources for children at the lowest cost possible, but sometimes it’s just not low enough,” she added.

Cole emphasized that her program is not designed to be a free handout. Besides giving underprivileged children access to pools for the summer, the Ms. Cole’s program requires that children receiving passes sign a pledge to clean their community during the summer.

Four-Year Council Terms Would Benefit City

The debate over the length of Cincinnati City Council terms is an old one in our city. The last drive to extend the current two-year council term was lead by former councilmember Paul Booth in 2000. As old as the debate is, the city has never had anything but two years terms for its councilmembers.

A primary reason why many Cincinnatians have supported 2-year terms is a belief that shorter terms increase accountability. Since they are never more than 2 years away from an election, 2-year term supporters argue that the constant threat of being voted out of office makes politicians more responsive to the voters.

Accountability is a hotly debated topic recently, as both officially and non-officially sanctioned commissions study electoral reform in Cincinnati. Many residents feel that a move to district representation – where the city is divided into voting districts and one councilmember is elected from each district – would force councilmembers to be more responsive to individual communities. Any move to 4-year terms without district representation might be seen by district supporters as a further erosion of accountability at city hall.

On its face, the argument appears to have merit, but the debates over term-length and district representation should be considered independently. District representation is a complicated issue that even expensive polling and analysis by the Electoral Reform Commission could not resolve. It involves many minutiae like, how many districts should there be? Should we have some councilmembers elected at-large and some from the districts? If so, how many should be elected from districts and how many at-large?

On the other hand, the debate over extending council terms from two to four years involves only one simple question: are four-year terms better than two? If four-year terms can improve the state of city government now, we should not wait for a resolution to the more complicated debate over district representation.

There are many reasons why four-year terms are superior. For starters, while shorter terms might seem to increase accountability, shorter terms can also lead to what I like to call perpetual campaign syndrome (PCS). PCS causes politicians to be reactive decision makers, constantly shuffling their positions to align with the latest public outcry. Instead of crafting thoughtful and fact-based policy that could benefit the city in the long term, councilmembers act like a bunch of frenzied plumbers trying to plug one more leak than they have arms. For this reason, a side effect of PCS is a lack of long-term planning and vision emanating from City Hall.

Additionally, for those who are unfamiliar with City Council elections, candidates campaign for the better part of a year running up to election night. This means that there is only one year in which councilmembers can devote all their time and energy to their duties at City Hall. The entire second year of office comes with the distraction of having to spend time fundraising and campaigning. This further erodes thoughtful decision-making by local government.

Another benefit of four-years terms is stability. When you look through the city’s database of legislation, you can’t help but notice that the exact same solutions to the same problems get tried over and over, year after year. A big reason for this is that turnover on City Council is so high. Councilmembers don’t learn from mistakes that were made only months or years before because the persons who made those mistakes are no longer around to tell them. There is a learning curve to being a councilmember, and shorter terms compromise the stability that is necessary to learn from past mistakes.

An obvious benefit of longer terms is fewer elections. Turnout for council elections is already low, and forcing people to come out every two years probably hurts turnout even more. In addition, every election costs the taxpayers money – around $300,000. This is money that could be better spent helping the city cope with budget shortfalls projected in the future.

Another potential benefit of longer terms is that it would make the job more attractive to some of our best and brightest citizens who might be turned off by the idea of having to campaign every two years. This is especially significant to potential candidates with families and young children who might not otherwise make the sacrifice of holding public office.

Welcome to Cincinnati Councilmember Laketa Cole's Blog!

Welcome to Cincinnati Councilmember Laketa Cole's Blog!
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