In her recent essay, Slum Managers, Professor Anika Singh Lemar interrogates the distinction between ownership and management of rental housing. Numerous legal commentators and legislators have focused on the harms associated with large commercial entities purchasing rental housing, and some have even proposed prohibiting or placing limits on certain types of ownership to address the housing affordability crisis. However, fewer lawmakers and scholars have discussed who manages these properties. Professor Lemar investigates whether management might have an even greater impact on rental housing and its tenants than ownership.
Property management often has more to do with the actual lived experience of a tenant than the property’s ownership. Indeed, it is generally the management company that is responsible for making repairs, ensuring safety, collecting rent, and carrying out evictions. As Lemar points out, small owners can also be or employ bad managers. Thus, Lemar’s thesis is that lawmakers and others interested in tenants’ rights should be pushing for laws and policies that focus more on harmful management practices and less on forms of ownership.
Lemar begins by addressing many of the problems that tenants in rental housing face, and points out that bad “landlords come in all shapes and sizes.” (P. 1210.) She then turns to the question of ownership and notes that there is still an “open question” regarding “[w]hether large-scale corporate owners generally are less likely to undertake routine maintenance and capital repairs than other landlords.” (P. 1211.) Thus, policies that attempt to limit certain forms of corporate ownership tend to romanticize the idea of small landlords without sufficient evidence that their practices are, in fact, better for tenants. Further, large corporate landlords still own a limited share of rental properties, and thus any attempts to regulate them to the exclusion of other landlords will not impact the majority of tenants or rental properties. Finally, there is some concern that, by limiting corporate ownership of rental properties, these laws could just limit renters’ access.
Lemar also recognizes that although we ostensibly have tenant protections in the form of housing codes and the warranty of habitability, those protections “largely go unenforced.” (P. 1219.) This decision not to enforce the law means that tenants suffer while owners benefit. Given this, she then turns to her solution, which is to regulate quality—a more direct approach to protecting tenants and ensuring higher-quality rental housing. While Lemar acknowledges that it is harder to regulate the management of rental properties than their ownership, she believes the ends of improving tenants’ quality of life justify the means.
There are a number of ways that states or localities could do this, but Lemar focuses primarily on two approaches: licensing and receivership. First, regulators could require licensing of property managers. While acknowledging some of the barriers to entry and other concerns associated with licensing programs, Lemar also discusses their benefits, which are most evident when they are preceded by education or training and a test of expertise. Here, this might include a seminar focused on complying with the housing code. She also believes that the “primary benefit” of requiring property managers to be licensed might be the ability of local regulators to “remove bad actors from the marketplace altogether.” (P. 1225.) That way, even if a property manager manages properties owned by multiple landlords (or one landlord with multiple corporate forms), the property manager could be removed for failure to meet standards at a single property.
While licensing should ideally prevent problems before they happen, she also discusses receivership as another solution to protect tenants after harmful or illegal housing quality issues have arisen. Unlike licensing of property managers, which does not really exist in the form that Lemar envisions, most jurisdictions do allow for receivership when a property has been glaringly mismanaged. That said, it is uncommon because it is viewed as a harsh penalty that impinges on property rights. Lemar argues that, “[r]ather than erecting hurdles to receivership, policymakers ought to ease the process . . . .” (P. 1229.) Indeed, she suggests that the process could be automated: if a property manager reaches a prescribed number of violations, the receivership process would kick in. Finally, Lemar argues that receivership could be linked with licensure—if there were a number of licensed property managers in a given jurisdiction, they could serve as the pool from which to find a receiver. At base, the essay encourages us as scholars to rethink our focus on property ownership and think more about management in the context of rental property.
