Seven six if I have PERCV talk station. Very happy Wednesday to Jim Neale running for Sheriff. He'll be on at the bottom of the ar. In the meantime, I'm happy to welcome back to the fifty five Cassee Morning So Chief Operating Officer of the National Real Estate Investors Association, Charles Tassel. Charles, welcome back to the fifty five Carssee Morning Show. Great to have you on today.
Thank you, Brian, good morning. How are you.
I'm doing well well. I just feel like I got to qualify as far as the things over which I have controlled, Charles, I'm doing fine. Beyond that, I feel like I'm in a crisis. Anyway. Remind my listeners before we dive into the emergency rental assistance programs plural and how it affects runners and landlords, which is the topic we're talking about today, Remind my listeners what you do at the National Real Estate Investors Association.
So we have about forty thousand members across the country, and what we do is really try to put teams together for investors people who want to invest in real estate, and really try to help them build a team so that they can maximize the value that they bring to the table and build wealth classically as we do in this country. And have you know this is the original hustle or side show. You know what kind of that?
How do I make some money on the side. Yeah, you invest in real estate and it's a long term proposition. And guess what, you build up your community. You invest in your community, and you're helping people out who don't have the capital to get started in housing and in real estate, and you grow the country. That's what we do.
It sounds like a great idea, great concept, and of course I like the capitalistic nature around it. Real quick again, before we get to the emergency mental assistance programs. What a city like Cincinnati has been struggling for years and years, as long as I've been paying attention, dealing with the problem of absentee landlords. You know, you got to have
an apartment buil it's there to make you money. Hopefully you're taking good care of the tenants, you're keeping you providing them with electricity and water, and you're keeping the rodents and investation out. But there are a lot of them that don't. And when you go to try to find them and prosecute them. Otherwise hold them accountable under the laws that exist. They disappear, they change LLC structures, and you got to start from scratch. Is there a
solution to that? I hate to put you on the spot for that issue, Charles, but it's one of those things that just drives everybody crazy.
Well, so there's let me unpack that a couple of ways. So looks for Apartments Association for a couple of decades and we worked on this issue and just unpacking different pieces of it. One is which is what is the definition of an absenty landlord? Because some communities will say, you know, if you don't live in our community, you're an absentee landlord. That's the farthest thing from the truth right now. The realities are if you're not within I like to be able to keep eyes on the properties.
They're within the driving range, they're short range. Most people that do investing will invest in a community or two. They know their area and that's where they invest, so they'll pick a community. They'll get to know what they know. You know, two blocks over is a problem. Two blocks this way is great. This is where I'd really like
to move to. So that's one piece of it. But the other side is when you start going into building inspectors and police departments, they have the ability to go in and they have standing to go in and find out who owns that LLC because most properties owning an LLC right, And so the municipalities what we've encouraged we actually start We helped the city and the county actually get the official housing docket put together well back when they wouldn't talk to each other. That was one of
the first steps. That way, you've got a focused effort to really address when there are complaints brought in. It's not hey, I'm dealing with you know, judge saying I'm dealing with a rape today, I'm dealing with a murder.
I'm dealing with a delayed paint. What is this? You know? Well, the reason that's delayed paint is because this is one of the issues that came forward because the person isn't investing in their property and they're causing problems in the community and their deteriorating the property and materity values of not only their property but those around them. So we want to put the housing docket together. It's one of
the first steps. But the next step is making sure that these cities and this is where like the City of Cincinnati has an attorney assigned to their police department. I believe I'll call him out right now, Mark Manny. He does a great job with this. You used to live in Deer Park with him, were neighbors. He is. His focus is to when the police say, hey, we've got a problem. We're getting calls or serviced at this property.
He can then go, oh, there's the LLC. Now I have the ability to go in from a legal perspective, find out who the actual agent is, find out who the owner is, and get to the next levels of service. That's typically the barrier most municipalities run into, and they don't have the attorneys in illegal backing to help their people get to that point.
Gotcha, So that's one that's a key step. Now you can actually got Okay, now I've got something to go after, because you know, prosecuting the nameless, spaceless LLC, even if it's you know, one person, only one house, it's very difficult. So that's part of what we're doing.
Okay.
I appreciate your addressing that and pivoting over, how does the the I think there are two ers emergency rental assistance programs collectively forty six billion dollars a tax payer money to help folks in need evictions, and you know sometimes it's utility bills that are behind or in arrears passed to just a variety of different assistance measures. With all of these billions of dollars, how does that translate into reality, Charles.
Well, it's so eer money is actually running out. Most of those funds have all been expended, and the cities the counties are typically the ones that were handling those funds, and they had organizations do that for them. So they went in and if anybody had, let's face it, back in twenty twenty, it made a whole lot of sense. In twenty one, you'll see where people had some impact. They might have lost some housing and they're trying to catch up because they lost their jobs for a period
of time. We're now in twenty twenty four, you know, saying you can't find a job in one of the you know, most businesses out there are looking for applicants all over the place, a little disingenuous, And really what we're finding is the ARA funds, there's a niche and
we found this. So the Apartment Association has a outreach program and donated over about two hundred thousand dollars a year to local charitable interest you know, food pantries and stuff like that, but they actually help cover that rent shortfall. We found that people have missed rent for one of three reasons. Typically it's an auto issue, they lost a job, or they have a medical issue and that could be a medical issue for them or their kids. One of
those three things. You about three to five hundred dollars, somebody falls behind and that you know, the budget doesn't quite match and now they're falling behind them rent. So that's where the initial funds that'd come in and help. And what happened was er money was an idea to come in and say, let's keep doing that and do it on a bigger and broader scale, kind of like the federal government does, and you know, they scooped in millions and billions and throw it out across the country.
We still help on the charitable side of that, much smaller dollar amounts, but really focusing on folks who are getting that. That kind of bumped in the budget because let's face it, if we've got it more than half the country. We can't put a thousand dollars together an emergency. We're going to have people who have some sort of economic hickup, you know, finances don't work for whatever reason this month. And what we found is really only once
once a year kind of thing. Typical family has this little kind of incident once a year at most, and those are the people we really want to try to help. That's where local funds, the local groups can help with that. Ear money's pretty much gone away. And what we're finding now is so like the vice presidents come out and said, hey,
I want rent control. We need affordable housing. People can't afford that, and it's like, okay, there's there's you're conflating a whole bunch of issues, especially, start throwing around the word rent control as national rent control, and then, Brian,
you'll appreciate this. The justification to do it was to say, we're gonna letit rent increases to five percent, okay, and if you don't do that, we're going to take away your ability to expense funds, which by the way, is one hundred percent through the Tax Cut in Jobs Act of twenty seventeen, which they already want to get rid of. Yeah, it's one of those things you're like, wait a second, you're gonna you're gonna use this as the incentive, but
you're already getting rid of the incentive. In fact, it's only eighty percent in twenty twenty four, and it drops by twenty percent every year from here on out. So it's one of these disingenuous statements that's out there that just conflates the issue about rent control and what can be done. And you know it's pesky little thing called the temp Amendment.
Oh yeah, there's that.
So you know, rent control is you know, you know in Ohio that's been preempted. You cannot do rent control. You can't do it at the local level. You don't do at the state level. And our state has said we want to invest in the community. We want the municipal leaders to take the time to make sure that there's supply in their community for housing. That's really where you handle it, and it's not a quick fix or anything. It takes a while to build houses, It takes a
while to go through the zone. It takes a while, and the longer it takes, the more costly it is. The more costly are housing it is. That's where affordability really comes in.
Well, yeah, and California is a great example of that. I mean, just to build a house, a house like affordable, it's kind like a million dollars. I mean, the cost of supply is more expensive, the regulatory environment is outrageous, and you got all the edicts and mandates, and there's the nimbi reality you face when you're trying to build something because nobody wants a new house there. I mean,
it's just it's also an insurmountable challenge. But you know, the reality is right now, I guess there is an insufficient supply of well, I don't even know what quote unquote affordable is. Is there actually a definition for that? Because I can't afford a house in San Francisco. There isn't an affordable house anywhere for me. But here there is what I would perceive to be, under my budget circumstances, affordable housing. But that's that the words they throw around,
it's so loosey goosey. It's like, you know, what is a rich person? How do you define that? I mean, it just depends on where you live, doesn't.
It a lot of it? Does you know? Midwest we still have some of the most affordable housing across the country. Certain by affordable in that terms we're really talking about it is obtainable. Can you actually obtained Can you work a basic forty hour week job? And the reality is in this area, if you've got two people who work forty hours a week at a basic ten twell fifteen dollars an hour job, they can get a one better apartment. In some places they're getting two better apartments. You know.
So you know, I had a roomates when I came out of college because you know, I can't afford me own place, and part it was I wasn't sure I wanted to because riskiness of job and all that. As you get developed and you put your roots down and develop your value, you know, in the marketplace, you make more money and guess what, you can buy a bigger place.
But to say that, you know, there's this false notion out there that we take the minimum wage, and the report that just came out for Ohio said take the minimum wage forty hours a week, Well, you can't afford a two bedroom house. It was like, of course, not you can't afford two bedrooms, but you could afford one in fact, if you worked a little extra, you could actually afford one in most places around Cincinnati, around the Midwest.
That's part of the problem is we've got these people who are willingly complating things rather than actually trying to deal with the issue. So good.
I was curious to know if they what you said, the funds are almost tapped out now, but the forty six billion in this emergency rental assistance, if are they arguing that we need to continue that program or those programs? I mean, every government program that's ever existed has never really ended. People get used to the infusion of money or the free stuff and things, and then they say, well, it's a it's a right basically.
Well, Reagan had some great comments about that and about the inevitability of a never ending program by looking at the federal government. So yes, there's there's requests for that, and again there's a whole package of things. You can
go back to. January of twenty three, the White House put out a Renter's Bill of Rights, which started laying out these kind of principles and they you know, they sound really innocuous until you try to implement them and say, oh, we're going to do leases well, they want to do leases at the national level, which means you take the most liberal version, so you take a California or Massachusetts
or Maryland version and try to implement it. And by the way, you're doing it at the federal level, not the state level, where all all real estate and all landlord housing transactions are taken care of. And I really prefer to call them housing through housing providers, because I'm not the lord of any land. I would like to
be the lord of my castle. You know, I don't have a castole either, And so we and there's actually a real fight to take away that word because they don't want to get rid of the word landlord because oh, you say landlord, we always think of, you know, mister Roper back from Three's Company kind of thing, yeah, you know, or something worse. And part of what Kamala Harris has come out with is she wants to go after what
she calls quote unquote big housing. Her definition of big houses is if you own or invest in more than fifty units. So if you are part of a you know, doctors or engineers, and you're part of a sixty unit apartment building, you're part of your big housing gotcha, and you're part of the problem in this country. And that's like, it's just the farthest thing from the truth.
Right, is it? That whole idea of going up to big housing that's built on the notion that there are big corporations out there that're going around buying up single family houses and then turning them into rental properties.
You know, and there are some equity funds that out there doing it. Yeah, And they really got their taste of it in kind of eleven, twelve, thirteen, back when you know, there was foreclosures and there were long what they called tapes coming out of banks, a foreclosure list, and the bank said, I have to get rid of this because the fat is telling me to So will somebody buy this? And they were such large groups it
was only equity groups that could afford it. Yeah, some of them have started to spin them off, some of them have maintained them and continued to grow since that. He's had issues with some as well, and part of the problem with that, and I'm happy to unpack that, but it's a little longer coming.
Yeah, We're going to have to save that one for another day, Charles, since we are out of time. But I sure appreciate your willingness to come on the program to talk about this rather complex issue. Charles, and I know you know it is COO and National real Estate Investors Association. We will have Charles back on the program again to further dive into this issue. Charles, thanks again for your time. Have a wonderful, wonderful week. Stick around Jim Neill's coming up in the next segment bottom of
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