KC Regional Equity Network Healthy Homes City Ordinance Ballot Petition

The KC Regional Equity Network is holding a petition drive to get a Healthy Homes Ordinance on the Kansas City Missouri Ballot in April of 2018.
Local tenant advocacy groups are convinced that rental tenants who end up in rental housing where the landlord will not make repairs have no options to get city or county authorities to step in and force the landlord to make repairs.  They can’t call city officials and ask them in to inspect and cite the landlord for housing code violations, why they can’t has yet to be explained, maybe the city does not have enough staff to handle tenant landlord complaints.
So instead, because the city failed to put a healthy homes ordinance on the ballot for Tuesday November 7th, 2017, these advocacy groups are holding a petition drive to place a Healthy Homes Ordinance on the Ballot.  There proposed ordinance would require the licensing of all rentals for a small fee and then would have a complaint based and a randomized interior inspection provision.  It seems the key to getting this all to work is the license, that could be revoked if the landlord fails to make repairs.
The landlords contend, this is just a nuisance regulation that would raise costs to the landlord in the form of fees and time spent, that would in turn be passed on to the tenant.  And, one would have to wonder, for the really bad landlords, who do not make necessariy repairs now, with out the licensing, how making them have a license, is going to force them to make repairs.

What does this mean for landlords in Kansas City Missouri?

Well, we are fairly certain that these groups will get the necessariy signatures to get this on the ballot and because so many landlords in the Kansas City metro area are not able to actually vote in April, we will have to work hard to educate those who can.  We will need to secure funding from somewhere to advertise against the vote and to send out educational direct mail to the tenants.  A counterpart to MAREI in another state were facing a similar issue and they created an educational mailer to all the tenants in the area to educate them on several facts:
1) Increased costs in time and fees will be passed off to the tenant in the form of higher rents.
2) As low end rentals get improved, landlords will be able to increase the rent they charge.
3) Inspections would not be at the tenants option, they would be forced to sumit to city inspection whether they asked for one or not, a violation of their 4th Amendment rights.
Here at MAREI we are fairly certai mandatory licensing and interior inspections would increase the quailty of rental stock in the metro where they are enacted.  The good landlords will remain good landlords and just pass the extra costs on to the tenants.  Some of the bad landlords as well as some of the good ones may just throw in the towel and decide that owning rentals is not for them, taking rentals out of the pool of available rentals, improving the quality of the rental housing stock over all and quite possibly increasing rents slightly.

What does this mean for the SubStandard Units?

Where we really see the ordinance doing any good, is with the rental properties that the advocacy groups are really trying to fix  – the units in buildings that have need of major repairs,  We see the ordinance doing one major thing – getting rid of sub standard units.  Not because they will be magically repaired and offered at the same low rental rates, but because the low end, sub standard rental in Kansas City will be eliminated and tenants who rent this type of unit will have to figure out some other place to live.
We see one of two things happening, they will be abandon or they will be transformed.
1.  Some units will just go away and not be offered for rental any longer.
Here the owner does not have the money or the ability to get the home fixed and they will not be able to keep their rental license. With no license, the tenants will be forced out and face costly fees to move and find a new rental in their price range, which will be very hard because the advocacy groups are working hard to eliminate low end, sub standard housing.  When the tenants are forced out, and the rental income stops, the owner will either fire sale it at a loss to someone else or abandon it to foreclosure or to taxes.  Three options that put more vacant property in the city, but that’s the cities problem, not the landlords.
2.  Some units will be fixed but again, the poor renter is left out in the cold.
Here the owner does have the money or the ability to get the money to make the repairs, and the landlord will either fix the house to sell it off to an owner occupant, we have seen this happen in areas where we are seeing the values of older homes increase as the area is revitalized, like Hyde Park and Columbus Park.  As they are sold to owner occupants, there will be fewer rentals, forcing up rents.  Or the owner fixes the unit up and increases rents.  Either way, we see increased rents.  Take a look at any renovated building and what do you see, higher rents and in some cases much higher rents.  And rents are already almost out of reach of many.
So while we can’t legislate poor people out of existence, they are working hard to legislate them out of Kansas City.  Who are we as real estate investors and landlords to question them.  Advocacy groups goal is to help the tenant, but over time those tenants they are trying so hard to help are going to be left with no where to live.

MAREI has Reversed Our Opinion, We are Fairly Certain that Rental Licensing and Interior Inspections are a Good Thing

Yes, the fees and the forms are a pain, but the landlord can just raise your rents across the board by about $25 to $50 a month to cover them.  Most tenants have an extra $50 a month to spare, so who cares.  Plus, oOver time, the advocacy groups and the ordinances are going to force the slumlords who operate on the legal side of the business to either step up their game or get out of business.  Either way, this will mean less rental competition, higher rents and better property values, all good things for the landlord.
But you might ask, what about the Tenants and their 4th Amendment Rights?  Come on, they are just tenants, so who cares.  Not our problem, come on the tenant advocacy groups see no problem with violating the 4th Amendment, the City sees no problem with it either, so why should we as landlords take issues.
Sure, there will be the folks that always rented in the junkiest of houses and well, they are going to have to figure out something.  Maybe they can find a slumlord that operates outside of the law, like that warehouse owner  in oakland.  Or maybe they can get more Section 8 or free money from Charity Groups  so they can afford higher rents, or they will have to move in with family or get a roommate or maybe they have a really nice car they can live out of.  But again, this is what the advocacy groups want, so who are we to question them.

A Boon to Kansas City’s Land Bank Program

As the new licesning and inspection ordinance forces out home owners who abandon the homes to taxes, we are fairly sure the city’s inventory of homes in the Kansas City Missouri Land Bank will increase.  Maybe the advocacy groups and the city of Kansas City could start a Dollar Home Program where they can give these homes to those who are now looking for a place to live because all the sub standard rentals magically went away.  And maybe the advocacy groups could offer grants to these people of $8,500 (or maybe a TIFF for $10,000) for them to make repairs to the homes, as that is how much you have to have in the bank to make repairs.  Never mind that by the LandBank’s website these home need $40,000 plus in repairs.!
Finally, a Way to Legislate Away Poor People
Cities and governments have tried to fix the prolem of having poor people in their cities since, well, there were cities and poor people.  A few years back we saw that some cities found a great way to deal with the problem of homeless people – make it illegal for the homeless to build a tenant city on public land, and magically, no more homeless people.  So, because it is really bad for poor people to be living where the landlord will not fix anything, keep in mind the middle class and the wealthy, well they would just sue the landlord or move out, but the poor, they can’t do that.  So how can we fix tthis problem – a new law that will effectively eliminate low end rental housing, and magically no more probem.
What’s next . . lets be sure to outlaw hotels and motels by the week or the month, because many of the poor will end up there.