Proposed Legislation on Late Fees

Proposed Legislation on Late Fees

Harvard sociologist Matthew Desmond, in Evicted: Poverty and Profit in the American City (2016), found that “Eviction functions as a cause, not just a condition of poverty.” Desmond, Princeton University and leading private foundations in 2017 established the “Eviction Lab”, a nationwide database of evictions. Everyone should review the evictionlab.org site. As of 2016, Michigan had an eviction filing rate of 13.31% or 13.31 per 100 residents. Michigan’s eviction rate of 3.28% per 100 rental homes is over 3 times the 0.94% U.S. average. Warren ranks 8th highest in evictions among major cities in the nation. Detroit ranks 32nd. The affordable housing shortage underlies this crisis. Michigan’s low-income and moderate-income families often pay 30-50% or more of their gross monthly income towards rent.

 

On March 12, 2020, the Michigan House of Representatives, rather than addressing this crisis, passed HB 4587 to permit late fees of the greater of $50 or 10% of the monthly rent. This will increase the financial burden on low- and moderate-income families, exasperating Michigan’s eviction crisis. We urge the rejection of this legislation. Better options are available, such as the District of Columbia’s Rental Housing Late Fee Fairness Amendment Act of 2016.  The District of Columbia caps late fees at 5% and prohibits evictions based solely on non-payment of late fees.

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