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A landlord registry in Springfield will vastly increase rents for many low-income tenants. 

Consider this scenario: A man buys a house in 2016 for $45,000. It has a family living in it who were paying $650 a month to the previous owner. The new owner keeps them on as his tenants at the same rent. His property taxes are $1,678 a year and his casualty insurance is $452 a year.

In 2018, the family separates, quits paying rent and are evicted. The landlord spends two years remodeling the property, completely gutting the kitchen and bathroom in order to repair structural termite damage. He spends about $25,000 on the repairs and remodeling, which included a new furnace, central air and a new hot water heater.

Despite all that spending, the market rate for rent has only increased to $700 a month by 2020, so he rents the house to a family at that rate. His property taxes are now $2,008 and his casualty insurance is $653. So he’s getting virtually no return on the $25,000 he spent to maintain the property.

By 2026, his property taxes are $2,369 and his casualty insurance is $1,304. The market rent should be $1,300, but his tenants are still only paying $700. Why? Because the landlord is not a greedy jerk. He’s not comfortable raising the rent on a family who has been faithfully paying their rent every month, even though his expenses have gone up. 

It’s not that, on some level, the landlord isn’t greedy. If the tenant moves out, the landlord will not be re-renting the house at $700. He will be re-renting it at $1,300 – the market rate. There’s no conflict in advertising a house for rent at the market rate. It’s not the same as telling a family currently living in your house that you are raising their rent from $700 to $1,300 just because the market will bear it.

But, as long as the family from 2020 is still there in 2027 and beyond, they will probably be paying well below market rate for the foreseeable future – unless a landlord registry is implemented. A landlord registry vastly changes things for the landlord, which results in the costs being transferred to the tenants.

First off, there is the annual registration fee to fund the inspection. The recent Illinois Times cover story (“Housing is a human right,” Oct. 1) mentions similar ordinances have resulted in fees of around $75 to $200. That is not very difficult to absorb, but the fee is the tip of the iceberg. The real cost is in fixing the inspection findings.

Related

In 2016, I was cited by the city of Springfield for chipping paint on the eaves of a two-story house. I wasn’t comfortable dangling from a 30-foot ladder to strip and repaint the eaves, so I called several professional painters. The lowest bid was $6,000. It might seem like a lot, but the nature of the house prevented the work from being done via a man-lift and thus the painters took into account the hazards of the work.

I wasn’t about to pay $6,000 to have my eaves painted, so I spent nearly $6,000 purchasing scaffolding and did the painting myself. But, one way or another, it cost me $6,000 to address the chipping paint.

A landlord who spends thousands of dollars fixing deficiencies that, in the past, were just lived with, is going to be passing those expenses onto the tenants – even though it’s not the tenants who are forcing the items to be repaired.

That family paying $700 a month on a house that can fetch a market rate of $1,300 month will soon be paying significantly more under a landlord registry. A $6,000 expense averages out to $500 a month. Add that to the $700 a month rent and the tenant is paying $1,200 a month. If they don’t like it, they can move out and the landlord will find a tenant at $1,300 a month.

I bought my first rental property in Springfield in 2003 and currently own 22 houses. So far, city inspectors have never been inside one of my properties. I can only imagine what will occur once they start inspecting houses that are more than a century old.

In the March 18, 2021, issue of Illinois Times there was an article highlighting the blistering porch paint on one of my rental properties and pictures of chipping ceiling paint. After five years, I still haven’t repainted anything. But the tenants are paying just $550 a month even though in 2022 I spent $15,000 replacing their roof and the market rate for their property has climbed to $1,300 a month.

Under a landlord registry, I will likely be required to address the paint – but I won’t be bearing the cost of that. If my expenses go up dramatically, the rent will need to go up.

It’s not easy looking a tenant in the eye and telling them you are raising their rent because they are below market rate and you are a greedy jerk who wants more money. But it is very easy to tell them that you need to raise their rent by $200 a month because the annual city inspection just cost you $2,400 in repairs, even though the tenants never asked for the inspection or the mandated repairs.

The proposed landlord registry essentially removes a layer of choice away from both the tenant and the landlord. Currently, the tenant can choose to strip and paint themselves if they don’t like the condition of their premises. Or, they can just live with the chipping paint and continue paying below market rent. Or, they can move to a better-maintained property and pay market rent. Under the registry, allowing the landlord to defer maintenance and keep the rent low will not be a choice.

Hopefully, any ballot initiative will clearly advertise what is being voted upon: an increase to municipal staffing. A landlord registry sounds like a revenue-neutral concept, but, as the article makes clear, it will require increasing the number of city inspectors. For many tenants, a landlord registry will not be a godsend – it will be a disaster.  

Lawrence Criscione is a Springfield resident and retired nuclear engineer. He has been a landlord in Springfield since 2003 and currently has 22 rental houses.

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2 Comments

  1. I don’t doubt that some of this is true– minor fixes that tenants may have hand-waved in the past could get caught in inspections and force more repairs, maybe even leading to higher rents for those places. But after the cost of replacing a roof, are you really balking at the price of the ceiling repair that should have gone along with it? Leaks mean damage and mold, not just bubbling paint. Even minor issues can lead to major problems– and leaving major problems unfixed is the reason people want the registry. This is just asking permission to keep some of your properties derelict and under-maintained in exchange for lower rents.

    1. A roof leak needs to be fixed. Once the roof is fixed, rarely is the answer for a 90-year-old plaster and lathe ceiling to merely repaint the ceiling. The ceiling needs to come down and be replaced with drywall.

      Demolishing a plaster ceiling in the kitchen of a house that tenants are living in and then hanging a drywall ceiling is not a simple endeavor.

      The kitchen is due for a major remodel. It has knob & tube wiring, old wooden windows and plumbing bandaid-ed together by the previous owner.

      Out of respect for the tenants, I have been allowing them to continue renting at $550/month. Once they choose to move, I will be doing a complete remodel of their kitchen and bathroom, repairing the ceilings damaged by the roof leak, and upgrading the electrical system. Once that is completed, I will be renting the house at whatever the market will bear

      In the meantime, the tenants are welcome to strip and paint the ceilings. But I will not voluntarily be doing that work on a ceiling I intend to demolish. If forced to fix the ceiling, I will be evicting the tenants and repairing the house properly instead of bandaid-ing the ceiling

      Perfection has a cost—a cost that the most vulnerable members of society will be forced to pay for even though they are not the ones insisting on perfection

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