Investor Real Estate Accounts

For real estate investors to keep track of their properties rental performance and tax information in one place.

This blog covers the general topic of real estate markets.

KC Tenants Bill of Tenants Right

first posted: 2019-11-04 15:30:11.385129

Mayor Quinton Lucas and the KC Tenants Activists

Kansas City new mayor wants to improve the situation for the low income tenants in the inner city.

KC Tenants, a tenant activist group is proposing a Bill of Tenant Rights, some of which will hinder new tenant screening by landlords. A Landlord group has put forward these proposals on affordable housing. Some see the mayor as biased towards the KC Tenants Bills of Tenants Rights.

You can see here the Mayor's interview with the tenant group. Affordable rental housing is very important to him and he had experience with eviction in his family and community.

I seems to me that KC Tenant, because of their overarching concern for tenants, are eager to attack landlords to reap short term benefits.

For instance, a KC Tenant advocate said that they support rent control and would petition for it as soon as the legislature changes to make it possible. But rent control is know to have dire long term effects on housing availability and quality, see rent control worse than bombing.

While rent control is a well known example, restricting landlord's capacity to do checks relevant to the ability to pay rent for the tenant is likely to result in more evictions. The official eviction number currently stands at a high 9,000 per year for a population of 1 million. Let's hope that this does not grow further.

Seeing that the Housing Committee meets Wednesday Nov 6th 2019, I wrote the letter below. We will see in what direction the mayor deliberates this week.

Letter to Quinton Lucas, Mayor and Chair of the Housing Committee

Dear Mayor,

KC Tenants is presenting a Tenant Bill of Rights package on November 6th.

It appears to me that it is misrepresenting tenant-landlord relations as an antagonist zero-sum game, which it is not, and that the result of the bill will to harm low-income tenants and make landlords pivot towards the provision of higher-cost housing

What the bill terms as the “new” tenant rights start with an enumeration of anti-discrimination laws enshrined in the Civil Rights Act of 1866 to then “progresses” to protect the prospect’s source of income and eviction record. The bill mixes federally protected civil rights with new "rights" that turn tenant screening into a liar's poker game. It will result in poor screening and more evictions.

People respond to incentives:

  • On the tenant side, the lower penalty of eviction will cause tenants to deprioritize their rent payment and the city will see more evictions.
  • On the landlord side, they will pivot towards housing above $1,100 monthly rent, and housing below $900 monthly availability and quality will decline severely.

Note that there should not be a tenant side and a landlord side. Policy should align the incentives for the tenant and for the landlord towards the cohesion of the neighborhoods rather than getting the lawyers out. I think we need boots on the ground to help tenants and social services to help the special cases.

I currently operate 4 houses in KC MO. I invested a lot of my retirement savings in Kansas City: I spend from $10,000 to $30,000 of repairs per house prior to putting a tenant. Some upgrades, such as replacing windows with double-glazed windows are essential to lower their heating bills and ensuring that tenants have enough to live on and pay the rent. My strategy as a KC landlord is to provide value with low rent and good insulation to keep low-income tenants able to pay.

I could tell you more about my experience with tenants over the last 4 years if you want to hear how one deals with a social emergency, but at this stage, I would rather hear your thoughts. I saw your mayoral campaign debates, and you strike me as someone fair who wants real long term improvement for Kansas Citian rather than measures that are justified by emotions and window dressing that creates the wrong incentives.

Yours faithfully.

-- Sebastien

PS: I also have some ideas on how to improve the community situation which I put below, I don't pretend to have all solutions, let me know if you think some ideas below are worthy of consideration.

The city should offer help and advice and counseling to all new mothers (family planning) and people in real difficulty, eviction or homelessness is a very real difficulty, so is domestic violence. The KC social service website currently says it has a legal service, that service only represents the state and intervenes in cases of child abuse and benefit fraud. The social services should receive sufficient funding to advertise and reach out to those who need it most: a mobile app with links to the relevant city services. The reach-out and actual help provided needs to be measured and made public.

Another worthy initiative is to patrol KC in winter with a thermal camera and let the owners of the worst insulated houses that their occupier’s energy bill can be cut. This has a positive impact and can help stabilize a neighborhood.

Update 20200102: Bill of Right passed on Dec 12th

In the article here, the KC press explains that the bill passed pon Dec 12th 2019, causing elation amongst tenants. The initial proposal has been watered down so that landlords cannot be forced to accept section 8 programs.

Landlords associations commented that many would review whether it makes sense to be a landlord in that city.

Click here to share this on!