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Tenants look to expand rent strike at Kansas City apartments as they enter second month

At their Oct. 18 rally, Quality Hill tenant union members demanded to meet with Federal Housing Finance Authority director Sandra Thompson (depicted in the poster on the right)
Mili Mansaray
/
The Beacon
At their Oct. 18 rally, Quality Hill tenant union members demanded to meet with Federal Housing Finance Authority director Sandra Thompson (depicted in the poster on the right)

At the risk of eviction, tenants at Quality Hill Towers and Independence Towers launched a coordinated rent strike over what they say are poor conditions and rising prices. They're recruiting more residents to join, and pushing for help from federal housing authorities.

Buckets of brown sink water, overflowing roach traps and photographs of clogged bathtubs lined the entrance to the leasing office at Quality Hill Towers. At their most recent rally, tenants brought their frustrations straight to management’s door.

George Pacheco carried two pints of murky water from his apartment.

“I gave my daughter a glass of water out of my sink and it was so dirty that she refuses to even come and stay in the apartment,” he said.

On Oct. 1, tenants at Quality Hill Towers and Independence Towers launched a rent strike, demanding maintenance repairs, collectively bargained leases and a national 3% rent cap on all buildings that receive federal financing.

At their Oct. 18 rally, tenants said they plan to recruit more tenants to join the rent strike if the Federal Housing Finance Agency does not engage with them and meet their demands. Although Missouri offers no legal protections for striking tenants and they face risks of eviction or lawsuits, leaders with KC Tenants say the unions are preparing to rally more renters to join their movement.

The tenants “believe that they’re going to necessarily win this in the courts,” said Jaden Powell, a tenant attorney giving KC Tenants legal advice. “The courts are not set up to make these kinds of wide-scale changes. The power is in organizing and public pressure, and that’s where they think they’re going to win.”

Meanwhile, housing finance experts say that a rent strike only hurts landlords, not the FHFA, and they find it unlikely that the Federal National Mortgage Association, known as Fannie Mae, would risk its investment based on actions at two local apartment buildings.

They also say that a national rent cap would make it harder for landlords to keep up with maintenance and mortgage costs and would perhaps shrink the amount of rental housing on the market.

An annual 3% rental cap “would just kill the rental market,” said Ted Tozer, a fellow at the left-leaning Urban Institute’s Housing Finance Policy Center. “Lenders would be going bankrupt.”

What’s going on with the rent strike?

George Pacheco, a Quality Hill Towers resident, brought two gallons of dirty tap water to the Oct. 18 rally.
Mili Mansarsay
/
The Beacon
George Pacheco, a Quality Hill Towers resident, brought two gallons of dirty tap water to the Oct. 18 rally.

At the Oct. 18 rally, tenant union members said they met with FHFA director Sandra Thompson in May to discuss their living conditions. The agency says Thompson is unavailable to travel to Kansas City. Negotiations are ongoing about a meeting with KC Tenants and other FHFA officials.

The union is putting pressure on the agency because it is the regulator of Fannie Mae, the company that backs the loans in federally financed buildings.

Tenants are organizing a strike drive set for Nov. 1 to recruit more participants.

Later in October, KC Tenants and U.S. Rep. Emanuel Cleaver’s office announced that Fannie Mae gave Trigild Inc. $1.35 million for repairs at Independence Towers.

But they say that money is not enough.

“While we celebrate this step, we remain committed to our rent strike,” the Independence Towers tenant union said in a statement. “This is a one-off bailout for the parties that have neglected their tenants.”

As of Oct. 29, nearly 24% of the 234 occupied units at Quality Hill Towers are on strike, KC Tenants said, while 57% of the 63 occupied units at Independence Towers are on strike.

Tenants said their apartment buildings need dramatic repairs and better maintenance. Management has said work is underway to fix those problems.

Neither Sentinel Real Estate Corp., which owns Quality Hill Towers, nor Trigild Inc., which manages Independence Towers, responded to The Beacon’s requests for comment.

What is KC Tenants’ strategy?

A yellow sign that says "On rent strike" hangs from a closed window on a tall building.
Celisa Calacal
/
KCUR 89.3
A rent strike sign hangs from a window at Quality Hill Towers, where the tenant union is going on a rent strike.

The tenant strike aims to pressure the FHFA to meet renters’ demands at all federally backed-properties.

“If the federal government is going to be involved with private businesses and financing their profits, we expect the government to exercise every available avenue to protect tenants’ rights,” said Tara Raghuveer, the director of KC Tenants.

But because the funds don’t come from public tax dollars, the FHFA and Fannie Mae don’t have control over their properties in the same way that, for example, the U.S. Department of Housing and Urban Development has control of the government-funded buildings it manages.

Mark Willis, the senior policy fellow at the New York University Furman Center for Real Estate and Urban Policy, said that Fannie Mae typically has the right under the mortgage to pursue legal action when landlords let properties fall into disrepair. Fannie Mae buys and sells mortgages with the expectation that the property will be properly maintained. And when owners neglect repairs, they’re breaking their mortgage terms.

That gives Fannie Mae the option to declare a default or foreclosure on the property, Willis said. As an alternative to taking ownership of poorly maintained buildings, Fannie Mae can give money to a receiver to step in for the landlord and handle repairs.

In February, Fannie Mae filed a lawsuit against 728 N Jennings Rd Partners LLC, the owner of Independence Towers, for not properly paying back loans for building repairs and failing to maintain living conditions according to the standard outlined in its loan agreement. A Jackson County judge appointed Trigild Inc. as the receiver in charge of managing repairs of the property in May.

Fannie Mae cannot directly instruct the receiver, but it can provide funding and offer guidance.

But Raghuveer argues that the federal backing gives landlords better terms than they’d get in the private market. Since the landlords benefit from public support, she said federal properties should offer more protections for tenants.

“If the government is going to be involved in backing a loan,” she said, “that should come with strings attached.”

Pests, broken appliances and other deteriorating living conditions plagued residents at Quality Hill Towers.
Quality Hill Towers Tenant Union
Pests, broken appliances and other deteriorating living conditions plagued residents at Quality Hill Towers.

In 2023, loans to landlords from Fannie Mae and the Federal Home Loan Mortgage Corp., known as Freddie Mac, were capped at $150 billion. Raghuveer said that those contracts offer landlords lower interest rates and other perks but offer very few safeguards for tenants. That, she said, can attract slumlords.

So tenants want Fannie Mae to impose the cap on new contracts and apply it to existing contracts when landlords refinance their mortgages.

Raghuveer said the initial financial burden of the strike will fall on landlords, with Sentinel losing at least $3,000 monthly at Quality Hill. And while Sentinel is a large corporation with a broad portfolio, she said nearly a fourth of the occupied units are participating and they will try to recruit more people on Nov. 1.

“It’s not a financial hit that (Sentinel) can sustain long-term,” she said.

While the prospect of altering a national market by pressuring Sentinel appears remote, Raghuveer said that KC Tenants is trying to get tenant unions across federally backed properties in Michigan, North Carolina, South Carolina, Montana, Illinois and Kentucky to launch their own strikes.

What’s at stake for KC tenants who strike?

The inside of Anna Heetmann’s apartment at Independence Towers. The cardboard covers a large hole in the ceiling. Heetmann says the ceiling is so crumbly that the tape won’t stick very well.
Vaughn Wheat
/
The Beacon
The inside of Anna Heetmann’s apartment at Independence Towers. The cardboard covers a large hole in the ceiling. Heetmann says the ceiling is so crumbly that the tape won’t stick very well.

In Missouri, striking tenants risk eviction. They could be sued for unpaid rent, but Powell said that tenants can argue that their rent isn’t owed because the landlord has failed to maintain habitable living conditions, which is part of the lease agreement. That defense doesn’t fully protect them.

Tenants can also be sued if they remain in the home after their lease ends. Missouri law does not protect tenants from landlords evicting them with or without cause at the end of a lease.

“If a tenant isn’t on a lease or is on a month-to-month lease, they really run the risk of their landlord retaliating against them,” Powell said.

Kansas City ordinance also prohibits retaliatory evictions for any reason, including joining a tenants’ union. But Powell said that law has not been widely enforced in court cases because there are really no defenses in unlawful detainer cases beyond whether the landlord followed proper protocol in ending the tenancy.

She said that tenants have limited legal defenses when withholding their rent, aside from using uninhabitable conditions as a defense in rent possession cases.

Missouri law also allows tenants to make repairs themselves if landlords don’t respond within 14 days of a complaint. They can deduct up to $300 or half a month’s rent, whichever is higher, from their payment. However, Powell said that this approach is insufficient for larger issues.

“When we’re thinking about places like Quality Hill, a lot of the issues are building-wide,” she said, “like plumbing issues, folks without hot water, folks with bathrooms and tubs that won’t drain. And that’s not something that you could fix for $300.”

Because the law doesn’t provide striking tenants with many protections, Powell said the campaign is relying on public support to put pressure on the landlords and the FHFA.

In an Oct. 3 solidarity letter, Kansas City Council member Johnathan Duncan and seven other City Council members called on the FHFA to negotiate with the tenant union and refrain from any “retaliatory actions against the tenants.”

“The lease is a legal agreement that is supposed to work both ways,” he said. “There are always accountability measures for tenants. There are very few accountability measures for landlords and these federal regulators.”

What’s at stake for landlords?

Quality Hill Towers tenants taped traps filled with roaches to the door of the leasing office.
Mili Mansaray
/
The Beacon
Quality Hill Towers tenants taped traps filled with roaches to the door of the leasing office.

Tozer said a national 3% rent cap on all federally financed buildings isn’t feasible. Instead, it would place a financial strain on landlords that would hurt the market.

“You’d have no more apartments being built,” he said. “And you’d have landlords not renting to people anymore.”

He pointed out that landlords face rising operational costs — including property taxes, insurance and maintenance — which typically go up more than 3% annually.

A rent increase cap would leave property owners unable to cover these rising costs. That could produce even more maintenance issues for tenants.

“If they’re not going to pass that on to tenants,” he said, “then that means that they’re going to have to start cutting other places.”

Tozer said a rent cap would come with immediate pushback from property owners.

“I would sue over that,” he said. “You would have to get congressional action to put on a rent cap.”

Housing finance experts say that measures like a grace period for late fees or rent increase notices don’t impact mortgage payments, but rent caps are a different matter.

And hurting landlords’ ability to pay their mortgages would put Fannie’s and Freddie’s investments at risk, which Tozer said the FHFA would want to avoid.

Financial analysts say that a rent cap might also push landlords to seek loans from other sources.

“Whether it’s good policy or not, it probably would mean that no one would borrow from Fannie and Freddie,” said Willis.

He said that Fannie can pursue legal avenues against owners who don’t maintain property standards. But a rent cap could create challenges for all owners.

“The one thing you want to do is make sure landlords who want to maintain their buildings well are able to do it,” he said. “You don’t want to set up a system where they can’t even afford to do the right thing.”

Who’s responsible for these living conditions?

Quality Hill Towers tenants left buckets of murky faucet water in front of the leasing office.
Mili Mansaray
/
The Beacon
Quality Hill Towers tenants left buckets of murky faucet water in front of the leasing office.

Tozer said that the FHFA is several steps removed from tenants and landlords in these situations. Fannie Mae invests in mortgages and shares the risk with a local lender if the landlord defaults. Local lenders handle payments, foreclosures and other mortgage processing on behalf of Fannie.

But federal law prohibits Fannie Mae from direct contact with landlords. Instead, Tozer said, the lender is supposed to play an active role in inspecting the building to make sure the landlord is meeting property standards as required by their loan agreement and complying with local housing codes.

And while these properties receive federal support, Tozer argued that the responsibility for enforcing maintenance standards largely rests with local government agencies.

“General protections should come from the local, county or city code enforcement regarding violations,” he said. “Where are the building code officials in your community? Why are they letting people live this way? They’re the first line of defense.”

The Healthy Homes Rental Inspection program, run by the Kansas City Health Department, inspected Quality Hill after the rent strike began. The program identified several violations, though none was severe enough to require tenant relocation.

Independence Towers has been inspected by Independence’s Rental Ready program. But despite various complaints, the building passed its most recent inspection in December.

Brent Schondelmeyer, a former Kansas City Star reporter, told the Independence City Council he’d found that 99% of inspections from May 2022 to May 2023 received a perfect score. Critics argue that the inspection process, which relies on third-party inspectors hired by landlords, may fall short in addressing safety issues.

Raghuveer said that the FHFA has the power to improve conditions for tenants in federally backed buildings. She said that the issues in these properties are too widespread for local efforts alone to provide adequate protection.

“This problem is not going to be solved work order by work order,” she said. “It’s not going to be solved building by building.”

This story was originally published by The Beacon, a fellow member of the KC Media Collective.

Mili Mansaray is the housing and labor reporter at The Kansas City Beacon. Previously, she was a freelance reporter and Summer 2020 intern.
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