Evicted_ Poverty and Profit in the American City - Matthew Desmond Page 0,60

integration. Voucher holders more or less stayed put, upgrading to slightly nicer trailer parks or moving to quieter ghetto streets. It could, however, bring about large gains for landlords.3

Because rents were higher in the suburbs than in the inner city, the FMR exceeded market rent in disadvantaged neighborhoods. When voucher holders lived in those neighborhoods, landlords could charge them more than what the apartment would fetch on the private market. In 2009, the year Ladona was hoping to move into Sherrena’s new property, the FMR for a four-bedroom unit in Milwaukee County was $1,089. But the average four-bedroom apartment in the city rented for much less: $665.4 When landlords were allowed to charge more, they did. Although Sherrena didn’t think the Housing Authority would approve the maximum amount, she was planning on charging Ladona $775 a month, $100 more than the average rent for similar units but still well below the FMR limit. Ladona didn’t mind. With a voucher, what she paid was a function of her income, not Sherrena’s rent.5 Her rental expense wasn’t affected; the taxpayers’ bill was.

In Milwaukee, renters with housing vouchers were charged an average of $55 more each month, compared to unassisted renters who lived in similar apartments in similar neighborhoods. Overcharging voucher holders cost taxpayers an additional $3.6 million each year in Milwaukee alone—the equivalent of supplying 588 more needy families with housing assistance.6

The idea of a “rent certificate program” was first proposed in the 1930s, not by some Washington bureaucrat or tenants’ union representative but by the National Association of Real Estate Boards.7 That group would later change its name to the National Association of Realtors and become the largest trade association for real estate agents, with more than a million members. A rent certificate program would be superior to public housing, they argued. Landlords and Realtors saw government-built and -managed buildings offered at cut-rate rents as a direct threat to their legitimacy and bottom line.8 At first, federal policymakers disagreed and at midcentury decided to fund the construction of massive public housing complexes. But real estate interests kept lobbying for vouchers and were joined by numerous other groups of various political persuasions, including civil rights activists who thought vouchers would advance racial integration.9 Eventually, after America’s public housing experiment was defunded and declared a failure (in that order), they would have their day. As housing projects were demolished, the voucher program grew into the nation’s largest housing subsidy program for low-income families. In policy circles, vouchers were known as a “public-private partnership.” In real estate circles, they were known as “a win.”

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Sherrena bought the house she was going to rent to Ladona a few weeks before flying to Jamaica. It was a large, late colonial–style home with a round turret and generous porch. Someone had recently painted it black and white. The roof was new and so was the water heater and so were the wood-framed windows. The front door opened into a living room with a vaulted ceiling and an intricate mosaic fireplace. There was one bedroom downstairs and three upstairs, which you reached by mounting a long, bending staircase. Thick carpet lined the upstairs bedrooms, two of which, judging from the paint, used to belong to children. The house was in such fine shape that the inspector told Sherrena that he wanted to move in himself.

The black-and-white house was on a quiet street in the inner city. Sherrena judged the block stable “because it’s been vacant one whole year and not one fucking window is broken” and because “the people lock it down. If you come over [to the house], they out on their porch like, ‘Can I help you?’ They have their eyes on the street.” Sherrena’s new pride and joy had cost her $16,900. She paid cash for it. She had purchased properties for less—$8,000, $5,000—but none were as stunning as this one. A few days before Ladona was scheduled to move in, Sherrena stopped by the house to check on the repairs. She walked through its rooms and smiled in disbelief. When the feeling welled up, she did a little dance.

Since the foreclosure crisis, Sherrena had been buying properties throughout the North Side at a rate of about one a month.10 In some cities, as many as 1 in 2 foreclosures was renter-occupied. The crisis had provided landlords an almost magical opportunity. “This moment right now,” Sherrena reflected, “it’s going to create a lot of millionaires. You know, if you have money right now, you can profit