Shreveport’s City Council continues to take a step away from reality with its recent endorsement of a rental dwelling unit registration program, on top of an increase in the minimum wage paid to city employees.
Both measures advanced in last week’s meeting. The increase comes not as an ordinance but as part of the 2022 budget, about matching New Orleans’ plans to do the same. Both cities are in economic decline relative to other U.S. cities their sizes, and raising the wage has a demonstrable negative impact on economic growth, even if just limited to municipal employees because of increased taxpayer costs and the knock-on effect it has on private sector wages.
Yet the extra requirements and costs of landlords might do more economic long-term damage. They would have to cough up $65 initially per unit, and then $30 each year, as well as if needed pay to put properties into compliance according to a proposed list of 12 items. This adds definitions to vague state law whose Civil Code orders landlords to ensure maintenance of the property in a “suitable” condition for the purpose for which it was leased. The Metropolitan Planning Commission would administer it, presumably funded by these user fees.
While research is sparse on the impact of minimum rental standards, what little exists suggests landlords respond to increased costs by removing some housing stock and pricing up others that would exclude some potential renters. This effect mirrors that of a related regulatory regime regarding rental housing, rent control.
This is the last thing Shreveport needs. While the items listed are fairly basic such as the capacity to having running water and electric provision, the city has a depressed housing market as it continues to shed people, down around 7 percent from the last census. With so little relative demand, if at the lower end these extra costs are piled upon landlords, they simply will withdraw the stock as the soft market won’t allow for an increase in rates to compensate. And the segment of society most hurt by this will be those at the lower end of the rental scale as they see affordable housing disappear.
City government also will feel the negative impact. Some landlords will have no choice but to let now-abandoned properties fall into disrepair, increasing city costs in dealing with these. It already faces an extensive backlog of adjudicating and disposing of such properties, and has one of the highest proportions in the nation of such properties that this measure would aggravate.
Ironically, affordability hasn’t been a real weakness for the Shreveport rental market. In a study of 181 areas, while it ranked only 167th overall, on the affordability metric it came in 75th. This would decline as a result of the intended registry.
Interfering with the market this way brings more minuses than pluses. Existing code enforcement and state law can discourage sufficiently abusive landlord practices. Shreveport should abandon this counterproductive idea.