Joe Kelly & MLK, Jr Birthday Anniversary – A History Lesson

What do Joe Kelly and Martin Luther King, Jr. have in common?  … Lobbying

A reflection on the important role our members play in providing clean, affordable, well-maintained housing for all rental housing residents, in honor of  Martin Luther King’s Birthday Anniversay, 2013 — and in honor of 2-plus decades of lobbying by Joe Kelly…

Since 1990, the Iowa Landlord Association and Landlords of Iowa have retained Joe Kelly’ services for State Level Lobbying.

We are pleased to be able to share this video overview today, as we nationally celebrate the birth of Martin Luther King, Jr.    This video was captured at our Statewide Conference, Des Moines Botanical Center, November 14, 2012.   Joe is speaking about State Level lobbying and how our efforts — and more specifically his efforts, produce many positive results — results which keep legislation more fair and balanced for our members, and help our members provide homes for families who often cannot afford to own their home.   They absolutely must rent.     

One change in the law can be worth $00’s, even $000’s in reduced expenses for Rental Property Owners (RPO’s).    Nearly every expense for the RPO translates into an increased cost for residents.   These costs, while initially absorbed by owners, must trickle through to residents or it will will likely become a financial hardship for the owners or managers.    Private investors do not get into the business in order to increase their personal financial hardship, but to lessen their burden, and to improve the lives of their own families.   They must pass on the costs, or perish.

Indeed, some legislation can actually bankrupt RPO’s, which can put residents out on the street.  (Not a member, but this is an example of why RPO’s should be members — to obtain education an easier way!)

This is an example of the “Law of Unintended Consequences”.   Homelessness is not only created by mental health issues, it is increased by the high cost of housing.    The Iowa Real Estate Investors Association (f/k/a the Iowa Landlord Association), with assistance from Joe Kelly and other lobbyists like him, work diligently to keep the cost of housing affordable for many segments of our society — poor or low- and moderate-income families, college students, single head-of-household families, and the elderly surviving on fixed incomes, are the “disadvantaged” whom Martin Luther represented in his Campaign for Justice.

Like MLK, Jr., Joe is an educator — an educator to the Iowa General Assembly.  And, he is an educator/consultant for our members, about why and how we need to remain vigilant in our effort to provide clean, affordable, well-maintained property for those whom we serve.   We must earn a modest profit as a result of that effort — it is not optional! — else our business will perish. 

Unless our nation is ready to cede the entire industry to government-owned housing, we must rely on private individuals to invest in residential rental housing.

Let’s state this in another way.  In order to provide clean, affordable, well-maintained rental housing stock in our municipalities across Iowa (and the US), we must remain vigilant to keep burdensome regulation held in check.   Many regulations translate into a nearly immediate, direct increase in cost for residents.    The costs to build and maintain rental housing , and to keep it privately-owned, are staggering.   e.g. For the typical 3+ unit structure in Polk County, Iowa, just paying the property taxes alone consumes approximately 23-28% of scheduled annual gross rent – right off the top.  If units become vacate, the property taxes still must be paid!   Residents don’t pay property taxes, RPO’s do.  Residents  pay rent.  

If residents can’t afford their rent, or they drive up the cost of maintenance through their own actions (e.g. Intentional Damage to Rental Property, now part of HSB28 in 562A.17.6) or costs to meet housing code enforcement requirements become overwhelming, there is no winner in the outcome.    

To help keep housing affordably priced, we call on the Iowa General Assembly to enact legislation in 2013 to reduce the high cost of property taxes for residential housing stock — to treat all property for human habitation as residential property, not commercial.   

The challenging environment for Rental Property Owners & Managers, which our members face every day, is provided in an outstanding publication of the Joint Center for Housing Studies of  Harvard  University Study, 2011.   An excerpt follows:

“Over the longer term, the preservation of existing affordable rentals is key. While policymakers are rightly concerned about preserving the nation’s assisted housing stock, they should focus more attention on the privately owned, unsubsidized stock that supplies three times as many low-cost units but is threatened by high permanent loss rates. For example, federal tax provisions could be altered to encourage preservation of existing housing. More generous deductions and depreciation schedules for repairs and system replacements could increase investment in the stock and help restore dilapidated buildings to occupancy”.  (Page 29).   The full publication is available here.

This paragraph highlights just one of the benefits that would accrue from passage of the Occupancy Bill, now before a Subcommittee of the Iowa House Judicial Committee, in the form of HSB9.  How and why municipalities could be against this bill is challenging to comprehend.

Of course the entire Residential Real Estate investing community benefits from Joe’s work, just like the entire country benefited from the work of Martin Luther King, Jr.    Though only our members foot the bill for the consulting and lobbying work of Joe Kelly, the industry as a whole benefits.    In fact, all residents of rental property benefit, since Kelly’s work usually helps keep the cost of their rent lower!

I often state that Rental Property Owners and Managers should become a member of IaREIA | ILA, if for no other reason than to support our State Level lobbying efforts.    We don’t rely on the government to pay our bills, we rely nearly entirely on the dues we receive from members.  Without our members, the work Joe Kelly does for our industry would cease.

Your comments are welcomed.   Andrew Lietzow, Exec Dir – January 21, Martin Luther King Day, 2013.

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