The Unspoken Battle Against Landlords That Remains Unnoticed

Legislation regarding tenant screening has become more stringent over time. At present, 20 states and 106 localities have passed laws prohibiting discrimination against source of income (commonly but not solely Section 8), along with various other restrictions.

What Happened in Kansas City
Kansas City is one of the latest cities to pass what its advocates consider “the strongest source of income discrimination ban” in the country. This bill (available here) does more than simply forbid accepting vouchers (and nothing will change regarding its bureaucracy); rather it severely limits property owners’ abilities to screen potential residents before renting units out.

As previously discussed, tenant screening is one of the most essential tasks a property manager performs – without quality screening, almost no investment property would work successfully – yet bills like this one make this task increasingly more complex.

This was actually the second attempt at such legislation; its initial draft in 2019 resulted in the Kansas City Tenant Bill of Rights which simply restated existing law; however, its original intent had been to ban tenant screening outright.

Under this law, doing anything that would prevent someone who regularly abuses children from living near families with young kids would be seen as engaging in oppression – under this definition you would be considered a greedy slumlord engaging in oppression.

Thankfully, that practice was mostly eliminated and significantly toned down in 2019’s bill. Still, landlords cannot refuse tenancy solely based on prior evictions or damages caused to other tenants; nor based solely on convictions/arrests without providing additional information as evidence of eligibility to rent.

Only exceptional circumstances allow discrimination based on income source; otherwise discrimination against prospective tenants is prohibited.

Attorney Dan Kelly recommended at a presentation for the Kansas City Regional Housing Alliance that rent-to-income ratios be eliminated as such a measure must remain consistent across market and voucher tenants; it can only apply to rent not covered by vouchers in some instances. Instead, he advised using an income requirement which specifies a fixed sum over and above rent as a measure for fair housing practices.

No candidate should be turned down without at least two hits on their background check (such as two convictions or an eviction), with each applicant encouraged to provide supporting documentation or written explanations if necessary to add context for any negative factors discovered during screening.

Although such vague standards essentially force landlords to violate fair housing law by demanding they subjectively “review and consider additional information provided by rental applicants”, effectively making it virtually impossible to come up with a consistent policy that applies equally across the board, this bill’s advocates and others like it didn’t seem concerned with this fact.

Maintain a uniform policy in order to stay compliant with fair housing law as effectively as possible. Consult a Kansas City-area attorney before creating any tenant screening policy of any sort.

If you think Kansas City is unique, just wait. According to recent news reports, more than half of states and 100 municipalities have passed legislation similar to what Kansas City did, making more restrictive legislation likely down the road, even though this will harm real estate industry profitability and affordability overall.

Unfortunately, legislation isn’t the only issue we are up against.