Corporate landlords own 80% of apartments in the Kansas City area. And they’re nearly four times as likely to file to evict their tenants.
The Local Initiatives Support Corp., or LISC, has published a report about the impact of corporate and out-of-area landlords on housing in Kansas City.
That research found that corporate and out-of-area landlords were prevalent across the metro area. They were more likely to rent unsafe housing and evict their tenants than individual landlords or those who live locally.
The study’s writers listed several policy recommendations for cities across the metro area, as well as for the federal government. Those recommendations would make it easier to track corporate ownership, increase the number of safety inspections and use federal lending agencies to enforce affordability and safety standards for tenants.
“Corporate ownership has gained attention nationally,” said Fay Walker, a program officer at LISC who worked on the research. “It’s just really hard to understand and pretty involved to even start to identify the owners.”
What the study found
The published study listed four key findings:
- Nearly four out of five apartments in the Kansas City metro area are owned by corporations, as opposed to individual or “mom-and-pop” landlords.
- Corporate landlords are 3.7 times as likely to file for an eviction than small-business landlords and 1.6 times as likely to have code violations in their rental units.
- Nearly half of apartments in the nine-county Kansas City metro area are owned by an out-of-town corporation. Most often, those companies are based in Colorado, California or New York.
- Multifamily housing that is backed by Fannie Mae or Freddie Mac — federal government-sponsored enterprises that buy mortgages from lenders and repackage them for sale to investors — was associated with bad tenant outcomes, like evictions and code violations.
In short, corporate landlords own far more apartments in Kansas City than “mom-and-pop” landlords. That housing is more likely to be hazardous to tenants, who are also more likely to be evicted by a corporation than by a small-business landlord.
Corporate landlords often had debt that was backed by federal agencies, which the researchers said raises questions about what kinds of businesses are able to apply for federal assistance.
Corporate-owned apartments have become more and more prevalent, Walker said, particularly since the Great Recession.
“The operating theory is really that since 2008 and the foreclosure crisis,” she said, “there was cheap access to capital, there were low interest rates, and that’s when a lot of corporations and private equity saw an opportunity to make money and started investing in housing.”
Who are the biggest property owners?
LISC began working on this research about 18 months ago, and tracking down the corporate ownership of housing was the most time-consuming part, the research team said during a presentation at the Kansas City Central Library.
That’s because any one corporation may have dozens of LLCs all registered to the same address with slightly different names.
So if one property is owned by “XYZ Real Estate 01, LLC” and the neighboring property was owned by “XYZ Real Estate 02, LLC” but both owners had the same mailing address, that meant one landlord owned both properties under separate LLCs.
But researchers cautioned that the data was likely an undercount because they were very conservative about lumping together too many of those LLCs under one corporate owner. That means apartment ownership is probably even more concentrated than what the researchers could definitively say.
According to the report, the biggest apartment owner in Kansas City is Price Brothers Property Management, a local company that controls an estimated 5,314 units across 47 properties. In second place was San Francisco-based Landmark Realty, which controls an estimated 4,097 units across 33 properties.
Policy recommendations
The report included five main policy recommendations:
- Improve transparency about apartment ownership.
- Implement rental inspections that are proactive, rather than only inspecting units where issues have been reported.
- Strengthen tenant protections and rental assistance programs.
- Increase subsidies to help tenants buy their own properties or move the buildings into community control, rather than corporate or out-of-area ownership.
- Advocate for lenders, and Fannie Mae and Freddie Mac, to demand good-repair clauses in their mortgages. A KC Tenants rent strike this winter targeted landlords with debt owned by those lenders.
The first recommendation stood out to Walker as low-hanging fruit that could make a big difference. Having spent months navigating the public records documenting property ownership, she said there was plenty of room for improvement.
“There are a lot of tenants who don’t know who their landlords are,” Walker said, “and by extension, can either be living in housing that’s not habitable, or have an eviction filed against them just by virtue of not being able to get in contact with their landlord.”
There have been efforts on the state and federal levels to require corporate owners to disclose certain information to the government. They have since been rolled back by the Trump administration.
Walker said that Kansas City’s Healthy Homes permitting program is a good start. In Kansas City, Missouri, landlords are required to register with the city Health Department in case of safety issues.
But she said other cities around the metro area could create similar registries to make sure that the government has a name and contact information for every landlord, rather than opaque business registrations that may or may not have an identifiable owner or contact information.
“It’s really (easy) to argue that people should just know who their landlords are,” she said. It doesn’t “require a ton of resources. It’s just, when someone comes in to fill out a form, they’re filling out like an extra field.”
The entire report is published online and can be read here.
