A recent study has shed light on the significant presence of corporate and out-of-area landlords in the kansas City housing market, revealing a disparity in eviction rates and property conditions.

The research, conducted by the Local Initiatives support Corp.,or LISC,examined the impact of these landlords on housing within the Kansas City metropolitan area.

The findings indicate that corporate and out-of-area landlords are more prone to renting out unsafe housing and initiating eviction proceedings compared to individual landlords or those with a local presence.

To address these issues,the study proposes several policy recommendations for both local and federal governments. These include measures to enhance the tracking of corporate ownership, increase the frequency of safety inspections, and leverage 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 contributed to the research. “It’s just really hard to understand and pretty involved to even start to identify the owners.”

Key Findings of the Study

The LISC study highlighted four main points:

• Approximately 80% of apartments in the Kansas City metro area are owned by corporations, rather than individual landlords.
• Corporate landlords are 3.7 times more likely to file for eviction compared to small-business landlords,and 1.6 times more likely to have code violations.
• Almost half of the apartments in the nine-county Kansas City metro area are owned by corporations based outside of the region, primarily in Colorado, California, and New York.
• Multifamily housing backed by Fannie Mae or Freddie mac is linked to negative tenant outcomes, such as evictions and code violations.

In essence, the study concludes that corporate landlords have a dominant presence in the Kansas City apartment market. These properties are more likely to be hazardous for tenants, who also face a higher risk of eviction compared to those renting from smaller landlords.

Researchers noted that corporate landlords frequently enough rely on debt backed by federal agencies,raising concerns about the types of businesses that qualify for federal assistance.

Walker noted that the rise of corporate-owned apartments has accelerated as the Great Recession.

“The operating theory is really that as 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 possibility to make money and started investing in housing.”

Largest Property Owners in Kansas City

The LISC research team spent considerable time identifying the corporate ownership of housing. the process involved tracing numerous LLCs registered to the same address but with slightly different names back to a single corporate entity.

For example, if “XYZ Real Estate 01, LLC” and “XYZ Real Estate 02, LLC” shared the same mailing address, researchers concluded that both properties were under the same ownership.

However, the researchers believe that their data likely underestimates the true concentration of apartment ownership due to their conservative approach in consolidating LLCs under a single corporate owner.

The report identifies Price Brothers Property Management, a local company managing approximately 5,314 units across 47 properties, as the largest apartment owner in Kansas city. Landmark Realty, based in San francisco, is the second-largest, with an estimated 4,097 units across 33 properties.

“There are a lot of tenants who don’t know who their landlords are, and by extension, can either be living in housing that’s not habitable.”

Policy Recommendations to Protect Tenants

The report outlines five key policy recommendations:

• Increase openness in apartment ownership.
• Implement proactive rental inspections.
• Enhance tenant protections and rental assistance programs.
• Provide subsidies to help tenants purchase their properties or transition buildings to community control.
• Advocate for lenders like Fannie Mae and Freddie Mac to include good-repair clauses in their mortgages.

Walker emphasized the importance of improving transparency in apartment ownership, noting that it could have a significant impact. She highlighted the challenges of navigating public records to determine property ownership.

“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.”

Previous efforts to mandate corporate owners to disclose facts have been rolled back.

Walker praised Kansas City’s Healthy homes permitting program, which requires landlords to register with the city Health Department, as a positive step. She suggested that other cities in the metro area could adopt similar registries to ensure that the government has accurate contact information for all landlords.

“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.”