Landlords also need legal protection, not just tenants

High interest rates have undoubtedly put a strain on Oklahoma households. A product of high interest rates and inflation is the ongoing problem of limited affordable, quality, and safe housing options.

Interest rates on a 30-year mortgage are currently around 7.5%. When applied to real-world situations, this equates to a house payment of around $1,400 on a $200,000 mortgage, not including property taxes and insurance. When these requirements are factored into the total payment, Oklahoma consumers are looking at a payment of $1,700+ per month. This is simply not a possibility for many households.

As expected with most business ventures, owning and managing rental properties is not without its risks and burdens. Property owners or managers must navigate the concepts of risk, cash flow, protection, and continued viability. Some real estate investors are unfairly categorized as slum landlords or greedy individuals who take advantage of a financially disadvantaged consumer base. While I do not dispute the fact that this scenario exists, not all owners or managers fall into this category. Many, like myself, are simply interested in increasing retirement income through real work and investments.

Unfortunately, a few tenants can thwart this plan under our current system. In my experience, the formal eviction process can take over two months. Why is this the case? Why are the legal protections associated with the landlord-tenant relationship structured only to protect the tenant? After all, many bills associated with property ownership continue regardless of tenancy status. Should or should there be protections for the landlord as well?

This unfair concept forces investors to rethink their goals. Individual or small investors subject themselves to an additional burden due to this lengthy process. An owner of just a few properties can see all of their profits diminished due to just a few delayed eviction and removal proceedings. Unfortunately, if nothing is done to remedy this situation, affordable housing options for Oklahomans will continue to diminish.

The Housing and Urban Development agency is charged with administering many aspects of housing. Whether it is regulating lending practices, enforcing anti-discrimination practices, regulating safety, or providing subsidized housing, this agency is largely structured to protect the consumer.

What if there was an agency or entity that also “reasonably” protected the property owner? By “reasonably” I mean protections that allow the landlord to continue operating without substantially increasing the costs to other tenants.

I am in no way advocating a scenario where defaulting tenants are removed on an unreasonably short notice, but I realize that our current system costs other well-meaning tenants money. Ultimately, business practices are governed by mathematics. There must be a competitive profit, or many will choose to invest in other ventures.

I believe it is possible that a regulatory agency could also provide protections for homeowners and investors. This could come as a sub-branch within HUD, or a separate entity altogether. While I am generally opposed to government over-regulation, this is a necessary service to maintain and promote an affordable housing market.

I fear that without some form of regulation, the availability of affordable and safe housing will become increasingly limited. The reward of owning and managing real estate must be worth the risk.

J. Chad Clanton is an educator and owner/manager of rental properties in McClain County.