Slumlord As a Business Model
“Slumlord as a Business Model” was first published in 2016. In the years since, it’s become one of our most popular blogs. While the dates are old, many of the facts remain the same. This blog isn’t about one landlord or company. Instead, it shows how the system of landlording centers landlords, not tenants. That’s why it’s up to us to ensure we have the dignified and safe housing we need. We are powerful together.
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In late 2015, Maribel* was calling Inquilinx Unidxs por Justicia on a weekly basis. The temperature in her apartment, on the basement floor of her building, was so low that her two small girls had to wear their winter jackets to bed. Maribel herself had trouble sleeping at night because she wanted to keep the roaches from crawling over her daughters as they slept. Then, the ceiling in the bedroom caved in. She repeatedly called the management company, and they always said they were on their way to take care of the problem, but they never showed up.
The term ‘slumlord’ is applied to landlords like this, who manage their properties with the least possible investment, ignoring problems until infestations become unmanageable and the building falls into disrepair. But the word slumlord means something more than “a bad apple in the landlord barrel”. It is actually a business model, one that is excessively profitable, used across the country, and is widely legal because of a lack of protections for tenants and because existing housing laws are only loosely enforced.
Even among conscientious landlords, rental housing has become an immensely profitable business in the past decade. Profit margins in the industry are up around the country because of the 2008 housing market crash, which pushed millions of families into rental housing. This demand has allowed landlords to increase rent, and triple their profit margins between 2005 and 2015 (SNL Financial, MPF research).
The Slumlord**, however, has even higher profit margins. To reach these profits, the Slumlord uses a few common techniques: renting to vulnerable populations, setting up confusing repair-request systems, and fostering a culture of fear among tenants. Many landlords require background checks to track the rental, criminal and credit history of renters. The Slumlord uses them to target vulnerable renters. Tenants can be denied housing for not having social security numbers or having criminal backgrounds, low credit scores, or unlawful detainers (the court paperwork filed to evict a tenant, and which appears on their record the same regardless of the outcome of the trial.) Additionally, many landlords require proof of income, usually 3x the rent required, yet half of all tenants in the country pay more than 30% of their income on rent.
As more and more landlords refuse to rent to them, tenants have fewer and fewer options. The Slumlord knows he can exploit this situation, forcing tenants to accept meager conditions at a premium price.
Maribel is a single mother of two. At the time, she worked at a temp agency. Her income was difficult to prove because sometimes she had work, and sometimes she didn’t. Maribel is also undocumented, so her credit score and criminal history is hard to track. One of the few places that would rent to her was the Slumlord who put her and her family in a freezing, roach infested, crumbling building.
Officially, landlords are required to complete repairs, but the Slumlord easily circumvents the law by making it nearly impossible for tenants to request repairs. Maribel knew from experience that if she called to report the problems to the one Spanish speaker who works in the office at the management company, the message would simply be lost.
The company allowed only a select few staff to actually enter repair requests into their online system. Because only a few staff can enter requests, the others write complaints on sticky notes. Somehow, the bulk of sticky notes don’t make it into the system. After three or four tries, most tenants learn not to bother. We have spoken to hundreds of tenants who have had this experience. Like an abusive partner, the last thing the Slumlord must do is isolate tenants from anyone who could help them.
They will threaten tenants with eviction or even deportation for reporting a problem to the city; these are not empty threats. The Slumlord isolates tenants from each other by randomly discontinuing leases. Many of Maribel’s neighbors have suffered inexplicable lease terminations or outright retaliation: Dolores, from another building, was told her lease would be terminated due to noise complaints that frequently brought the police. Dolores is 52 years-old, works from 6pm-2am almost every night, and doesn’t even own a stereo. When Dolores called the local police precinct about the complaints, they had none on record. Dolores believes she was given the termination because she reported a burglary in her building a few days prior.
When she first started to work with us, Dawn was afraid to call the city. Her neighbor had called the city about repairs after being stonewalled by the management company. The neighbor had a lot of success with this approach, but a few months later, the landlord refused to renew her lease. Another neighbor, Danielle, called the city to report anonymously that her landlord hadn’t updated the license posted in his building. When she saw him later that week he told her he didn’t appreciate her choice to report the problem to the city. He refused to renew her lease for a year, insisting on month-to-month.
Retaliation creates many vacancies, but the slumlord fills them because he targets vulnerable communities -- the model is self-contained. A slumlord doesn’t operate in a vacuum. Local, state, and federal regulations legislate lease terms and conditions of rental housing. These regulations are clearly lacking, since the slumlord model so easily exploits them. This is not an insurmountable problem; there are steps our cities, states and federal government could take to alter the situation.
Without regulation, the capitalist market incentivizes the Slumlord to exploit, abuse, and neglect tenants. If tenants do overcome their fear and take steps to improve their homes, and if they do manage to win a monetary settlement, it’s nothing more than a business expense for the Slumlord. Our city has allowed the Slumlord’s misery-profiteering to continue by under regulating the market and lackadaisical enforcing its own housing code.
This whole system allows the Slumlord to win enormous profits with a model that takes money specifically from poor people. Their business practices, although reprehensible, remain legal in practice. The first step to finding a solution is to realize that the purpose of unsubsidized, privately-owned rental housing is to extract money from the many to benefit a few. We need to courageously build alternatives to the landlord model to stem the rising tide of rent and to protect families from the Slumlord.
*All tenants’ names in this story have been changed to protect their identities.
**Any mentions of a landlord in this story do not apply to one person or company.