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Malicious Landlords & Problem Properties

A policy white paper written in 2000 concerning problem properties in St. Louis. NOTE: Unfortunately, two of the graphics towards the end of the paper were corrupted, and do not upload correctly. My sincerest apologies.

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  Malicious Landlords and Problem Properties:A Policy White Paper  Gordon R. DymowskiMAL Project Chair November 1, 2001  Malicious Landlords - FOREWARD Within St Louis neighborhoods stand silent reminders of the gradual drainof vitality from the city. Abandoned and improperly maintained buildings areprevalent throughout the city of St. Louis. Even in the proudest neighborhoods, atleast one property casually wears the neglect of its owner. Tenants often live inproperties suffering from terminal neglect, and neighbors organize to address or alleviate the problem. In the worst cases, entire blocks appear lifeless, withboarded up buildings sharing space with poorly maintained structures. Thisphenomenon, if unchecked, has the potential to turn St. Louis into a hauntedtown.The issue of absentee landlords and problem properties - as well as their effect on St. Louis neighborhoods - has been in the public eye in the last year.During his election campaign, Mayor Francis Slay made this issue a keycomponent of his platform. A news item on KSDK on March 23, 2001, focusedon a woman paying rent to one landlord, only to discover that it was really ownedby another landlord, and that the property had been foreclosed on. On March 17,2001, Missouri Attorney General Jay Nixon cracked down on several buildingowners who were renting their condemned properties to residents. Finally, aDecember 27, 2000 article in the Riverfront Times focused on how Jack Krause- an absentee landlord with major property acquisitions along a single block - hada detrimental affect on the 4400 block of Vista in the Forest Park SoutheastNeighborhood. 2  Malicious Landlords - In 1999 Metropolis St. Louis approved the White Paper on AbsenteeLandlords, an attempt to create community awareness of irresponsible propertyowners and to provide concrete policy recommendations to deal with theabsentee landlord phenomenon. In addition, this project brought together community leaders and concerned citizens to collaborate in creating solutions tothis problem. The white paper is the result of hard work, research, collaboration,and input from various sources, including landlords, property managers, housingand health advocates, homeless and housing service providers, legislativeanalysts, members of Metropolis St. Louis, and other concerned citizens.The mission of Metropolis St. Louis is to create an environment in the cityof St. Louis that attracts and retains young people. After examining the absenteelandlord phenomenon, we propose that abandoned and problem propertiesadversely affect the city's ability to attract and retain young people. The issueaffects the city on various levels, from stability and aesthetic life of aneighborhood to its impact on the health and welfare of city residents. This paper will outline the incentives and disincentives for absentee landlords, discuss theoverall impact on the city and its neighborhoods, and propose specific policystrategies for dealing with the problem. DEFINITION OF TERMS For the purposes of this paper, we will distinguish among four distinct types of landlords. First, resident landlords are those who reside within theproperties they own (making them owner-occupied ), and who reinvest earningback into the properties. Non-resident landlords do not reside in their properties 3  Malicious Landlords - (or on the premises), but reinvest financial resources back into the properties andperform appropriate maintenance on them.  Absentee landlords may or may notreside on the premises, but do not maintain an active interest in the propertiesand grossly neglect and demonstrate apathy towards them. Finally, slumlords donot reside on the rental properties they own, neglect their responsibilities for them, and financially exploit their tenants.There are two types of absentee landlords, distinguished by their motivations. One type consists of landlords who are inexperienced in propertymanagement. They do not understand the scope of their responsibility. They tendto have little education or professional training in being a landlord and littleunderstanding of maintenance procedures. Such landlords may have acquiredproperty through inheritance and/or become so overwhelmed that they cannotperform their duties adequately. These people usually can be assisted throughremediation, education mentoring, and other strategies.The second class of landlords straddles the line between absenteelandlords and slumlords (who can be considered malicious landlords ). They are opportunists (when it comes to developing property) who often financiallyexploit their property. Initially, they may purchase distressed properties atreduced rates through foreclosures and/or tax sales. Then, they may perform lowcost renovations, creating additional units and/or bedrooms to increase tenantdensity. They commonly refinance their properties for more than their initialinvestments in them and retain the difference without paying additional taxes. 4