Kansas City Council passes ordinance limiting landlords’ ability to screen tenants; housing providers expected to flee market

A crowd of tenants’ activists cheered lustily Thursday at passage of Kansas City’s ordinance prohibiting landlords from asking about renters’ source of income and other items. But rental experts say the law will actually hurt tenants.

The ordinance, approved 10-3, prohibits Kansas City housing providers from “discriminating” against renters on the basis of credit worthiness, past evictions, criminal convictions or even their source of income – and could actually make housing less affordable and less available, landlords and others warn.

Experts say the ordinance, which takes effect. Aug. 1, essentially disallows landlords from taking into account almost everything they need to when renting out houses and apartments.

“I mean, what are landlords supposed to rely on otherwise?” David Stokes, director of municipal policy at The Show-Me Institute free-market institute, asked in an interview with The Heartlander last month. “You’re just basically telling them that they have to accept anybody who applies, no matter if they don’t have any money, if they have terrible credit, if they’ve been evicted all over the place. Anybody they refuse now is going to be able to sue and file a complaint. And perhaps that’s what some of the people sponsoring this bill want.

“It’s unnecessary. It’s not going to help anybody. But it is going to hurt people. And it is a total intrusion of local government into the business of being a landlord in a way that they have no right to do – and no need to do.”

The ordinance will do no less than kill the rental market in Kansas City, likewise warned Stacey Johnson-Cosby, landlord and president of the Kansas City Regional Housing Alliance.

“This is forcing us to not screen our tenants like any other normal business – like any bank, a mortgage company, auto loan,” she told The Heartlander ahead of the vote. “Of course, if you’re a creditor you’re going to screen your customer to make sure they’re going to be a good fit. And they think they’re going to take that from us? I will leave the market before I am forced to do that. 

“That’s how it’s going to kill the market.”

Indeed, Johnson-Cosby said she and her husband left the Kansas City rental market after such a bill was floated in 2019.

KCMO radio host Pete Mundo warns more individual landlords will follow Johnson-Cosby out of the market – and their replacements are likely to be out-of-state companies that are less responsive to tenants’ needs.

“We’ve had dozens of callers, small-time landlords call the show and say they’re in the process of getting out of KCMO. Very sad,” he posted on X after the vote. “Bad policy. Unless you like your rentals to continue to be gobbled up by a combination of the government and big corporations.”

City Councilman Nathan Willett, who voted against the ordinance, said it was at least amended to allow landlords to deny renting to sexual predators and people with convictions for violent crimes. But those and other changes, he said, only took the ordinance “from horrible to bad.”

“Still, obviously we should never mandate and tell landlords who they can rent to and who they can’t.”

Landlords will be limited in their ability to check on a tenant’s credit worthiness, and will be prohibited from looking into prior evictions or arrests, unless they occurred within the previous year.

Rents will likely rise due to landlords’ elevated risks and costs of doing business under the law, Willett says, and other rents will go up so landlords can avoid the red tape of federal housing programs.

“We’ll see more out-of-state folks buy up our properties here in Kansas City,” Willett said. “They’ll be able to deal with the red tape because they’re bigger. But the small mom-and-pop landlords, it’s really going to affect them the most.

“It’s really going to hurt middle- and middle-lower class [renters] who aren’t on vouchers, because not every landlord is educated on the federal program. Not every landlord wants to be forced into a federal program, and this essentially does that.”

The city is setting up a million-dollar mitigation fund for landlords whose voucher tenants can’t pay for repair of damages, Willett says. But as welcome as that is, it “tells you that there is associated risk with this [ordinance]. So, anyone who’s telling you that there’s not, I mean this is an admission that [there] is.”

Willett says the ordinance “definitely limits [landlords’] ability to make an educated decision. And so with that associated risk, they’re going to have to raise costs. I mean, anytime you put more risk on anyone, they’re going to have to raise costs.”

Willett says he’s aware that landlords are selling properties to get out of the KC market due to this ordinance – but that even more selling may occur as word of it spreads to those landlords who haven’t been following the news.

Councilman Kevin O’Neill said he also voted against the ordinance because of his opposition to increased small business regulations.

“I was against the mandates that would force landlords to accept vouchers,” O’Neill told The Heartlander in a statement. “That is currently a volunteer program, and I believe we should incentivize landlords to accept vouchers rather than force them by law.

“There were some very good provisions in the ordinance, and my colleagues worked very hard to minimize the impact to landlords. The $1 million fund to assist landlords in getting paid by programs that typically can take months – as well as applying these funds to damages caused by renters – were very positive.

“Ultimately, though, mandates on any small businesses is not something I would support.”

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