Some landlords say high Jackson County tax assessments will hurt tenants too. Here’s why

While property owners across Jackson County sound off on social media, stand in hours-long lines and flood local community centers to commiserate over sharp increases to their property tax assessments, landlords warn that homeowners won’t be the only residents who have to deal with the effects of potentially higher taxes.

They say Kansas City’s tenants could lose out too.

Several local property owners and real estate experts told The Star that increased assessment values and the higher property taxes that many expect to follow could likely push landlords to raise rents, put off needed building maintenance or sell their properties to offset the additional expenses — all moves that would fall on renters.

Andrew Syrios, a landlord who owns hundreds of properties in the region, said the assessed values of his nearly 200 Jackson County rental units — including single family homes, duplexes and fourplexes — increased by an average of 61%. A property in Waldo went from $140,000 to $649,000, Syrios said, and a South Kansas City property went from $51,000 to $192,000.

Jackson County assessors anticipated property owners would see an average increase of 30%, but many owners have reported significantly higher margins. Since 2019, the county has been working to bring its assessments up to market value after admittedly undervaluing them for years.

Syrios said he has filed appeals on many of his properties, but if the assessed values don’t come down, he plans to sell some of his buildings and raise the rent for tenants in his remaining buildings.

Oren Gamble, a local landlord who owns three single family rental homes in Jackson County, said one of his home’s values went up by $60,000 this year.

He said he has never received an assessment so high or felt forced to raise the rent on his tenants, adding that he prides himself on offering an affordable rent for quality housing.

“I actually provide what I feel is home above what most people do provide as a landlord,” he said. “I want the house to be something that I would also be comfortable living in.”

Tenants could face the brunt of tax increases

Many landlords set their rent prices to cover the costs of their mortgage, taxes, insurance and maintenance costs so they can then make a profit off of their properties, says Stacy Johnson-Cosby, a Jackson County landlord and a real estate agent who has been educating owners about the assessment appeals process.

So in many cases, she said higher taxes for landlords can mean higher rents for tenants.

“If the taxes go up, that means that the amount of income that property needs to bring in in order to cover all that goes up,” Syrios said, adding that some landlords may try to avoid raising rent by skimping on maintenance and renovation costs.

Based on his assessments and his estimated tax bills, Syrios said he may have to increase rents by $50 to $100 to break even.

Gamble said he may have to raise his rent by $70 to pay for his upcoming tax bill.

But in addition to the taxes, he said he expects his insurance for the three rental properties to go up if he doesn’t successfully appeal his latest assessments, which he said would also factor into how much he has to increase rent payments.

In recent years, rents have been climbing around Kansas City. Between July 2021 and July 2022, the median cost of rent in the area went up by 13%. In certain ZIP codes, the median rent price increased by 42%. And the city does not have enough housing options for its residents living on low incomes. It’s more than 64,000 units of affordable housing short, according to the Mid-America Regional Council.

“This issue with the county exacerbates our housing crisis, and it’s making it worse,” Johnson-Cosby said.

Gina Chiala, the executive director of the Heartland Center for Jobs and Freedom said that this is a “big picture” issue that will require people to organize and campaign for change at the state level.

“The fact is, rents are getting cranked up on everybody and a lot of people are struggling because of it,” Chiala said. “We don’t have the legal rights to protect people from that.”

Pressure to sell

If his tax bill ends up being too high to break even, Syrios said he’s considering selling some of his properties. Any money he makes off of any sales will likely only cover this year’s property taxes, he said.

But this option could have unintended consequences for tenants and neighborhoods, he said, opening up the possibility for out-of-state investors to buy up more housing across the county.

Citywide tenant union KC Tenants raised similar concerns in 2019 when tax values spiked.

“If the assessments push more local owners out of the market, their properties will almost undoubtedly be purchased by out-of-state real estate speculators with no real stake in our community,” KC Tenants said in a statement at the time. “Those corporate owners can be some of the worst, most exploitative landlords and are often unaccountable to tenants, neighbors and the city.”

Data obtained and published by The Star in a 2021 investigation revealed that Kansas City’s East Side has become a hot zone for investors and speculators from across the Kansas City region, all 50 states and at least a dozen countries as far off as Australia and Ukraine.

Many Black residents on the East Side told The Star at the time that they see the land grabs as exploitation fueled by rising home prices and rents, plus evictions.

When rents could go up

Tenants likely won’t see jacked up rents for a while. That’s because even though the county sent out tax assessments, it’s still too early for landlords to know what they will actually owe in property taxes this year.

Taxing jurisdictions (think: school districts, fire stations, libraries, city and county governments) will set the property tax rates or “levies” in the fall that owners will need to pay by the end of the year. And it’s not so straightforward that higher assessments always mean higher taxes.

Most of these jurisdictions are required by state law to lower tax rates if property values go up, and they have limits on how much they can increase taxes by. Kansas City Public Schools District is an exception and does not need to lower its rate when property values go up, because of a Supreme Court ruling.

The timeline for when tenants could feel the effects of a property tax increase also depends on the timing of lease cycles. Tenants in the middle of a lease term won’t see a change to their rent until it’s time to renew.

Do tenants have any protections from rent hikes?

In Missouri, not really. State law does require landlords to give tenants at least one month’s notice before raising the rent or evicting them, according to Missouri’s attorney general.

Gamble said he has already sent a notice to his tenants to let them know that their rent might go up when their current leases expire.

Legally, once a tenant’s lease contract is up, their landlord is free to increase the rent as much as they see fit.

“We do not have any rent control laws, because the state government has prohibited cities from controlling rents,” Chiala said about Missouri laws that preempt local governments from limiting rent increases.

“The best thing people can do really is to organize and participate in campaigns to defeat the state’s preemption law, which is something a lot of organizations are talking about right now,” she said.

If tenants have concerns, they can also review Missouri landlord-tenant laws here or contact organizations like the Heartland Center for Jobs and Freedom.

In general, individual tenants don’t have that many protections outside of their lease agreement, according to Chiala. She said tenants should consider organizing with fellow tenants to demand certain protections from their landlords. To learn more about organizing, tenants can reach out to KC Tenants.

Property owners who are unhappy with their assessments can appeal with the county Board of Equalization by July 31, but many tenants facing potential rent increases aren’t able to participate in the appeals process.

Johnson-Cosby is hosting a town hall meeting about potential reforms to Jackson County’s assessment process. The event will be on Saturday, July 15 at Colonial Presbyterian Church at 9500 Wornall Road at 2 p.m.

Jackson County legislators Sean Smith and Manny Abarca and Missouri Rep. Jeff Coleman are scheduled to speak about possible changes that could happen at the state and county levels, including possibly capping assessment increases or offering tax credits to specific groups of people.