A Critique of the Kansas City Tenant Bill of Rights

Yesterday the Kansas City Mayor's Special Committee on Housing Policy decided to hold off one week on a vote for a Tenant Bill of Rights. The legislation, however, needs substantial revisions or it will have major unforeseen consequences. That road paved with good intentions, kinda thing.

The bill (which you can read here) has some good or at least defensible provisions. A key part is to create a fund for legal counsel for tenants and also to provide "appropriate accommodation" for up to three months and in also provide for "The moving and storage of personal property for a term not exceeding three months." In Jackson County, Missouri, if a tenant goes all the way to eviction, the sheriff demands you to empty the house and leave the belongings on the front yard. This is, in my judgement, absurd and unfair. And even if the landlord were forced to pay for storage for up to a month (as the law is in Lane County, Oregon, where I'm from), it would be a tolerable expense. Rectifying this is a good thing.

Other points are already the law (such as prohibiting discrimination based on race) or only slight alterations (requiring 48-hours of notice to enter instead of 24). Some are understandable, but implementation will be extremely difficult. Most notably, the requirement for landlords to provide a "utility estimate" that "shall be in writing and be included as part of the leasing agreement." 

The problem is that sometimes, there is really no utility estimate to provide. At least not anything close to a full one. If we buy a property that has been vacant for over a year (which we often do), rehab it for two months and then rent it out, what are we to give the tenant? We could give them our few utility bills or get the old expenses from the utility company, but they are unlikely to be a very good estimate for the current year. And if the rehab was done in the Fall, it will say little of the Summer. While the bill only requires a "good faith effort," this area is still fairly grey.

The biggest problem, however, is with regards to tenant screening. Virtually every property management book, course and the like stresses the importance of tenant screening. Most proprty owners and managers I know have "horror stories" from when they started out and didn't screen very well. As much as we may hate to admit it, the past does predict the future, at least in aggregate. (I.e., an individual with an eviction may be just fine going forward, but people with evictions overall will be more likely to be evicted again than those without.) Yet the bill expressly prohibits landlords to "To refuse to negotiate for the rental of a dwelling based on an individual’s rental history." 

There are bad landlords out there, I fully acknowledge that. But there are also bad tenants. Back when we didn't screen as well in the past, we had multiple tenants do over $10,000 of damage. I've seen more than one property owner get foreclosed on because of delinquency and damages. And now we can't screen for rental history unless "unless the landlord can demonstrate that the rental decision was based on all information available, including consideration of the frequency and recentness of favorable and adverse rental history." What does that even mean? 

If the problem is landlords never accept tenants with an eviction, why not set some particular rules. (For example, evictions over five years cannot be considered or something like that.) Given the number of times I've seen applications with multiple evictions, I know there are plenty of landlords who do. We accept people with older evictions.

Screening for evictions is the same type of thing as screening for credit; which banks, credit institutions and the government itself does. So why can't property owners? 

And then there's this; "To refuse to negotiate for the rental of a dwelling based on an individual's arrest and conviction history, unless the landlord can demonstrate the rental decision was based on all information available including consideration of the frequency, recentness, and severity of a criminal record." Again, how do we demonstrate this? It's extremely vague.

We had an employee get accosted and everything short of assaulted by an inherited tenant before. Hell, an inspector I know had a gun pulled on him once! I assume that we could deny a convicted rapist rent one side of a duplex next to a single woman. But what about someone convicted of assault? By what standard are we to demonstrate this? Indeed, it's not even clear who it needs to be demonstrated to. Do we have to get such screening policies approved ahead of time? Or do we just have to hope we've made reasonable enough criteria and then hash it out in court if it comes to that? 

For these reasons, I highly recommend that the committee, at the very least, rewrite these sections to make them clearer and fairer to property owners. Property owners renovate and perform upkeep on a huge numbers of properties throughout Kansas City and elsewhere. If the risks and costs become too high, many will move on to other pursuits. This will lead to more blight and less supply which will increase rental prices, not decrease them. This bill, if implemented as written, will have very negative, unforeseen consequences.