Missouri has nullified a Kansas City ordinance and others like it that sharply limit what landlords can ask potential tenants – including about their ability to even pay the rent.

A leader in the local landlord community tells The Heartlander the KC ordinance, as well as its previous anti-landlord laws, have driven property owners to flee the Kansas City market.

“It absolutely violated our private property rights, and it goes against every successful and smart business tenet that we’ve ever had,” says Stacey Johnson-Cosby, president of the bi-state KC Regional Housing Alliance of metro-area housing providers.

Under the now-overridden ordinance, she says, “I cannot say no to someone who had a previous eviction over a year old. I cannot say no to someone who has bad credit or a low credit score. I cannot say no to someone who’s had prior property damage in a previous rental. I cannot say no to someone with a criminal arrest history. Literally.”

The ordinance also required landlords to accept a tenant’s federal housing assistance whether they want to do business with the feds or not.

“The contract with the federal government is not attractive, and some people just don’t want to do business that way,” Johnson-Cosby explains. “They should not be forced to. And that’s what this law did. It tried to force people to do business with the federal government with terms that they may not have found acceptable.”

Signing up to accept federal housing assistance such as Section 8, she says, entails costly delays in renting, as well as agreeing to federal inspections of records and even the property whenever the government wants.

“If someone who has a voucher wants to rent your place, it could be two to three months before they can move in, because we’re waiting on all the red tape from the government … without income, when I could go get someone that’s applied off the street and get them in there in two to three days.”

“This is America”

Kansas City National Public Radio station KCUR announced in a headline that “Missouri governor signs law allowing landlords to discriminate against Section 8 renters.”

The Heartlander asked for Johnson-Cosby’s reaction to that take on what has happened.

“It’s not discrimination, it’s simply a business decision,” she said. “This is America, and private contracts shouldn’t be government mandates. By the way, what happened to objective, fact based journalism, KCUR?

“They don’t force restaurants to accept EBT cards (food stamps). They don’t require private businesses to take every form of payment, including credit cards. They don’t mandate that Ubers provide free transportation like KCATA buses.

“So why is the city trying to force housing providers into federal lease contracts under the government’s Section 8 program – against their will?”

Governor Mike Kehoe signed HB 595 last week, noting that it:

• Protects private property rights.
• Prohibits local governments from limiting what factors landlords can or cannot consider in rental-related decisions, including source of income, credit scores, and rental and criminal history.
• Prevents enactment of security deposit ceilings.

It all begs the question: How can a landlord stay in business if he or she is precluded from screening applicants for ability to pay, credit scores, eviction history (of over one year) and criminal records?

“The very things that we would normally screen and say no for, this ordinance said that I cannot say no to them,” Johnson-Cosby says.

If a tenant wanted to report a landlord for allegedly violating the KC ordinance – for example, asking the wrong sorts of questions about rental or criminal history or source of income – a call to 311 could’ve instantly landed the landlord in hot water with the city’s fair housing department, she says.

An adjudication against the landlord could’ve brought a $1,000 fine; mandatory training in the ordinance paid for by the landlord; and even up to six months in jail.

“Ruin our housing industry”

Democrats who opposed the law argued it goes against the notion of local control.

“Well, local control needs to be smart,” Johnson-Cosby argues. “And if it’s not smart, they can ruin our housing industry, which is exactly what they’re doing.

“This is the third such law coming from the City Council that, each time they pass these laws, we lose housing providers. The housing providers we’re losing are everyday people like me; the ones who may have 10 or fewer units will leave the market. And some of the bigger ones will as well.”

After the City Council passed a sweeping Tenants Bill of Rights in 2019, she says, “we literally started having people leave the market in droves at that time because the Tenant Bill of Rights also criminalizes providing housing, and a violation could get up to 180 days in jail with that. 

“Then the right to counsel was the second one, where people left the market because of the laws coming out of City Hall. …

“If you have a City Council that listens to a tenants activist group, political activist group, for their housing policies, and doesn’t work with the actual frontline housing providers, then we need someone to save our housing market. And luckily for us, it’s at the state level. …

“I’ve talked to a couple of commercial agents who focus on investors that buy multifamily buildings, and they have both said – specifically and clearly and separately – that many of those investors said ‘I want something in the Kansas City area, but I do not want to buy in Kansas City, Missouri.’”

The City Council passed the ordinance in 2022 providing the right to an attorney when facing eviction. It was expected to cost the city some $2.4 million a year to help tenants fight landlords over being evicted, which is usually for nonpayment of rent. The program is administered by a Tenants’ Right to Counsel Committee composed of seven tenants and non-voting members of legal organizations.

A housing provider’s perspective

The program is wholly misguided from a housing provider’s perspective, Johnson-Cosby says.

“If they were really interested in helping the renter avoid eviction, they wouldn’t pay an attorney on the back end and allocate $2.4 million to do that. They’d pay rental assistance up front, help that person get the rent paid and avoid the eviction,” she says.

“When their right-to-counsel law came into effect, my husband and I looked and said we’re out. And so we sold our 13 units, and [the buyers] were all out-of-town investors, not necessarily the corporate investors, but they were all coming in from out of town.  And we sold them for a pretty decent amount, which surprised us. Many of my peers are doing the same thing.”

The thing is, when local landlords sell to national ones, the new owners often increase the rent to cover their costs – and are less likely to be responsive to tenants, Johnson-Cosby notes.

Local landlords also may be more likely to go out of their way to rent to homeless veterans, as Johnson-Cosby did.

“We were willing to accept lower amounts because that’s fine with us. We were mission-driven because the homeless veterans, having housing was important to us.”