From Rights to Revenge (1986-2016) A History of Renters' Rights in Chicago, Part V

We've spent the past two weeks talking about how the Chicago Residential Landlord-Tenant Ordinance came to be, but those events happened thirty years ago. I would be remiss to not spend some time discussing what has happened with tenant rights in Chicago since 1986. Unfortunately, I can pretty much cover all of it in this one final chapter.

Since the ordinance went into effect it has been amended only six times. Over half of those changes have focused on security deposits, fines and fees. The few tenant rights groups that remain have changed from civil rights crusaders leading mass protests and riots to staid legal advisers. Looking in retrospect at the impact of the CRLTO from thirty years on, it's apparent that the main beneficiaries of the CRLTO were not landlords nor tenants, but lawyers.

Was This What They Wanted?

Hon. Richard Posner

Federal judge for the U.S. Court of Appeals. Upheld Justice Parsons' decision on constitutionality of CRLTO, but expressed doubt that it would protect the health, safety, and welfare of Chicago's renters.
Image via the University of Chicago

Way back in October of 1978, Ed Sacks provided the Tribune with a hypothetical 'Tenants Bill of Rights' that never made it into law. According to Sacks, all tenants should have the right to:

• A clean, safe place to live
• Heat in the wintertime
• Hot and cold running water
• Windows that work, screens, and storm windows
• A working toilet
• A front and back door that lock
• Roofs, ceilings and walls that don't leak
• Privacy and protection from unreasonable intrusion and harassment from the landlord
• Repairs made quickly and properly
• Roach-free, rat-free and mouse-free living
• A structurally sound building
• A building with smoke alarms, extinguishers and fire escapes
• The right to complain about violation of your rights without retaliation
• The right to remain in your apartment until you choose to move out
• The right to move out when necessity arises, for any number of legitimate reasons
• A lease which guarantees these rights in writing
• The right to enforce these rights by rent withholding, tenant actions, and legal suits
• The right not to have your property seized, not to be locked out, evicted, refused a lease or lease renewal without probable cause and due process of law
• The right to recover damages because of violations of your rights

Note that the majority of those items focus on a healthy, safe living space.

By the time the CRLTO made it into law, it did include these basic provisions but spent much more time on other issues. The first twelve items of Sacks' list – the ones that focused on bare minimum safe housing requirements so desperately needed by the poorest members of the population - were lumped together into a single section of what was at the time a 19-section document. This is undoubtedly a reflection of the influence of middle-class renters, Realtors and landlords on the development of the bill.

Many of the rights granted by the finished ordinance required tenants to file a suit against their landlords in order to enforce. This might have been acceptable for middle-class renters, but your average poor renter could not afford to sue for every infraction. Many of the poorest renters, being recent immigrants, didn't even have legal standing to file a suit at all.

Judge Richard Posner's verdict on the appeal of “Chicago Board of Realtors v. City of Chicago” sternly rebuked the city for this loss of focus. He made a point to call out the city for turning a law intended to promote health and safety into a document preoccupied with interest, bank accounts and fees. He wrote, in part:

The Realtors who fought the CRLTO in the 1980s had predicted that Chicago would suffer a massive loss of landlords as a result of its strong pro-tenant stance. Their predictions haven't come true – a check of census records shows a nearly identical number of occupied apartments in 1970 and 2010. Our population has fallen off by quite a bit in the same time frame, so there's actually more housing to go around. Landlords may grumble about Chicago's laws, but they continue to stick around.

However, Posner's predictions have come true. In 1970, 23.4% of renters were paying over 35% of their income in rent, the breakpoint for what is considered “unaffordable.” In 2010 that number had nearly doubled, to 41.1%. Chicago has become a very tough city for poor renters.

As much as the courts of the 1960s and 70s wanted to treat apartment leases like any other consumer purchase contract, housing is different. It's the most expensive single cost in most people's lives. If your dentist bothers you, you can find a new dentist but you can't just pick up and move in a blink if there's a problem in an apartment. Tenant advocates in the 1970s may have gained their bill of rights but they lost out on their simultaneous push for rent control. In the end, this loss may be what has come back to hurt Chicago renters the most. Rent Control was banned statewide by the Illinois General Assembly in 1997, so any chance of getting it pushed through now has been lost.

Who Are the Heroes Now?

Renting is traditionally a temporary thing. Many renters are young. It was inevitable that the tenants who crusaded for the CRLTO in the 1980s would eventually grow up and move on to other things.

By the end of the 1980s, the momentum of the tenant movement was largely dissipated. By 1988 the Tenants Organization of Evanston had fallen apart, lost its war chest of funding and would eventually vanish altogether. Groups of renters who had organized building by building into tenants unions had splintered as founding members moved away. As the giant CHA housing projects came down and their inhabitants were scattered across the city, the last remaining focused force of low-income renters lost a lot of its manpower. The Metropolitan Tenants Organization remains, but after 1986 its job was to focus on educating renters about the CRLTO rather than fighting for further progress.

The decades of protest and activism gave way to decades of massive greed and isolation. In Chicago, racial boundaries have become even more heavily entrenched. Rising crime rates create fear between neighbors, preventing the rise of new building-wide tenant groups. The taught history of the civil rights movement glosses over the simultaneous, integral fight for tenant rights. It's taken us several weeks and over a hundred sources to piece together even this cursory study of what brought us to '86 – your average renter couldn't be expected to have any clue about how we got here, nor should they be expected to care. The terms 'uninhabitable' and 'slumlord' are now tossed around by middle and upper middle class young renters who have never seen a real slum.

Landlords, Realtors and lawyers, however, could stick around and wait. They stopped converting affordable apartments to condos for a while, but once their opposition vanished, they got right back to it. The worst apartments in Chicago now are no better than they were in 1986. The worst landlords will always be the worst landlords. The CRLTO didn't improve housing, it just gave tenants more ways to get revenge.

Warriors for Justice and Cash

In the 1980s, the standard lease required tenants to pay for the attorney fees of their landlord regardless of who won the case. This was a common thing nationwide. As you may recall from Part 2, tenants rarely had representation in eviction cases until free legal clinics became a thing during the War on Poverty in the 1960s. There wasn't any money in representing tenants. The lawyers who took on the cases of renters back then were doing so out of the goodness of their heart.

The CRLTO changed all that. It allowed for tenants to recoup damages and attorney fees from landlords if they won their case. Representing tenants was no longer just a matter of civic responsibility, it was also a cash cow. It wasn't even difficult anymore. Gone were the days when legal giants like Thurgood Marshall and Gil Cornfield had to take renters' rights cases all the way to the supreme court. Lawyers didn't have to prove huge things, they just had to show that the landlord had violated any random section of the CRLTO.

In preparing for this series, we spoke to one attorney who said that most landlord-tenant cases these days are about getting even. They are about ego. They are about someone in power telling the tenant that they're right.

Every landlord-tenant suit in Chicago is about the CRLTO, but most of them are small matters with little to dispute. It is a telling reflection of the change in attorney representation that the handful of landmark tenants rights lawsuits since 1986 have all focused on financial matters with big payouts.

In 2001, Aurelia Lawrence sued her landlord for not paying her interest on the $100 she provided as a pet deposit. They had paid her interest on the rest of her deposit, but that extra $100 was ignored. The CRLTO specifies that a landlord must pay two times the full amount of the deposit, plus attorney fees, in damages as penalty for any infraction of its security deposit clause. The initial judge in the case of “Lawrence v. Regent Realty Group, Inc” denied Lawrence this written penalty. She appealed the case. The final decision ruled that the amount specified by the ordinance was valid, and non-negotiable. The landlord lost $1270 plus enormous attorney fees over a $5 miscalculation.

The floodgates opened after that. Attorneys reached out to renters with landlords that had large numbers of buildings, offering to help them file class action suits to recoup twice their deposit for any minor CRLTO infraction they could find. The ordinance at that point was 17 pages long in standard type – it was pretty easy to find somewhere that they landlord had made a misstep. Landlord after landlord found themselves in Chancery court as their accounting records from decades past were reviewed with a fine tooth comb for minor errors in interest calculation.

Amanda Bonnen

Lead plaintiff in a 2009 class action lawsuit that led to many Chicago landlords no longer collecting security deposits. During this lawsuit, her property management company sued her for libel (asking $50,000 damages) because she tweeted about mold in her apartment. This case was dismissed.
Image via Twitter

In 2003, an apartment balcony collapsed during a party at 713 W Wrightwood, killing several local students. Everyone got sued for that one: the landlord, the city, the students – it was a banner year for personal injury attorneys in Chicago. The landlord racked up $108,000 in fines after getting sued by twenty-seven families. Unlike “Lawrence v. Regent,” this event was enough to force the city to change the CRLTO, step up the building code requirements for porches and crack down on landlords citywide for porch infractions. Landlords now had to provide a disclosure about porch safety requirements as part of their lease.

Six years later in 2009, north side renter Amanda Bonnen made headlines around the world. She had been in the process of suing her landlord, Horizon Group, over failure to provide the porch safety disclosure and a miscalculation of $1.40 on her security deposit interest. When she posted a complaint about Horizon on Twitter, they countersued her for libel, asking for $50,000 in damages.

It wasn't retaliation – Bonnen had already moved out and the case was dismissed regardless. However, the libel suit brought more focus to Horizon than they might have wished. It's been trotted out as an example of the legal issues surrounding social media by the New York Times, CNN, Huffpo and the Wall Street Journal. Horizon's Yelp page saw hundreds of one-star reviews from angry renters in the days immediately after the Bonnen story broke, most of which were removed as violation of Yelp's rules requiring reviews to reflect first-hand experiences. Horizon wound up on the receiving end of their own class action suit for security deposit infractions. In 2014 after fighting the case for 5 years, they were ordered to pay $833,455 in attorney fees to Bonnen. They filed for bankruptcy, although they remain in business, managing at least 22 properties throughout the city.

Since the CRLTO specified two times the security deposit as the default penalty for infractions, landlords started collecting non-refundable move in fees instead in the wake of “Lawrence v. Regent.” They were up front about the fact that the tenants would never see that money again. With a total security deposit of $0, the default penalty was rendered invalid along with the entire security deposit section of the ordinance.

It would only be a matter of time before this new practice was challenged in the courts. In 2014 Althera Steenes did in fact sue her landlord claiming that the move-in fee they collected should be treated the same as a deposit. The verdict in the case of “Steenes v. Mac Property Management” found that the fees were exempt from security deposit laws. City landlords and Realtors responded immediately. Two years later, the practice of collecting security deposits in Chicago is largely passé.

The Mostly Immutable Law

Althera Steenes

Tenant who sued her landlord, claiming that a non-refundable move-in fee is actually a security deposit or prepaid rent in disguise. The court found that a move-in fee is not either of these, but rather exactly what its name suggests.
Image via LinkedIn

The Chicago Residential Landlord Tenant Ordinance (CRLTO) has gone through only 6 substantial revisions since it was enacted thirty years ago. Most of those changes have dealt with fees, fines and security deposits – all financial topics. Changes that address the health and safety of renters and how their living spaces are maintained have been few and far between, and always in reaction to major catastrophic events.

In 1991, the city was changing the numbering system for their laws and took the opportunity to make some changes to the ordinance. This was the last major overhaul of the entire document. Late fees were adjusted from $10 to a sliding scale. Prepaid rent got lumped in with security deposits as things that earned interest. Lease renewals could no longer be offered more than 90 days before an existing lease expired. Lots of good, necessary changes.

In 1997, the fixed 5% interest rate on deposits became a sliding rate that responded annually to actual interest rates offered by banks. Two entire new sections were added to the CRLTO to address how the rates would be determined and communicated to renters.

From 2003-2004, a series of small changes were made in and around the process of addressing porch safety.

The real estate industry disaster of 2007-08 mandated further changes in response to the huge number of landlords in foreclosure. Tenants now had to receive at least 60 days notice before a bank tossed them out after foreclosing on their building.

2010 brought more foreclosure-related changes and an update to security deposit procedures that reflected the rise of online banking.

The most recent change in 2013 was part of a sweeping change to the entire city code in response to the rise of pesticide-resistant bedbugs. It marks the first time that tenant responsibilities were added to the city lawbooks since 1986, and the first time that landlord-tenant interactions were addressed CRLTO's home at Chapter 5, Section 12 of city law.

Eri'ana Patton-Smith (above), Carliysia Clark, Shamarion Clark, Carlvon Clark

Children who died in a 2014 apartment building fire. The building had been been cited for dozens of code violations, including missing smoke and carbon monoxide detectors. Their deaths led to the creation of Chicago's “Problem Landlords” list.
Image via Chicago Tribune

There have been new laws that affect renters. The Americans with Disabilities Act of 1990 gave some additional rights to renters. The Illinois Safe Homes act of 2009 protects survivors of stalking and domestic violence in rental housing. Chicago's High Rise Life Safety Ordinance addresses fire safety in large high rise apartment buildings. The Eri'ana Patton Smith and Coleman/Clark Kids Tenant Protection Ordinance, named after children that perished in a fire in sub-standard housing, allows for the public shaming of Chicago's 50 worst landlords. However, these have all been new laws, not changes to the CRLTO itself.

Predictions and Conclusions

There are definitely still problems with landlord-tenant relations, although they're certainly not as bad as they once were. Tenants have tools to protect themselves, but many of those rights can't be enforced without suing.

The future of tenant rights in Chicago is largely dependent on tenants themselves. They will need to find a way to organize and sustain momentum if any further change is to occur. They need to be unafraid to report problems to the city. They need to somehow make it so that safe housing can be secured and maintained without having sue, or otherwise make it so that suing is not as daunting of a task as it is now.

I suspect that the focus will not shift back to improving rental housing while we modern culture remains obsessed with taxes, individual wealth, criminal activity and racial barriers.

This series has been a fantastic, exciting journey for us. We are grateful to the Chicago Public Library and its staff for helping us learn to use the many research source they make available for free to members. We're also grateful to Michael Pensack of the Illinois Tenants Union, Celeste Hammond of the John Marshall Law School, Julie Lawton of the Depaul University Law School, Alisa Levin of Levin Law, Ltd and Michael Zink of the Law Firm of Starr, Bejgiert, Zink & Rowells for speaking with us and pointing us in the right direction at the outset.

The nature of this series as a group of blog posts means it could only be a very cursory summary of the many things that affect current renters' rights in Chicago. If you would like to delve further into any of the topics covered in the series, a list of all our sources can be found in the box below.

Most of all, thanks to all of you who have read this article, shared it with your friends, and supported us as we spent the entirety of the past several weeks up to our ears in legal research. We hope that you'll continue to refer back to this series and share it with others – especially Chicago renters – as an example of what RentConfident's research powers can do.

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