‘Massive’ rent hike frustrates Plaza residents. Missouri law gives them few options

Two days before Thanksgiving, Chris Peters discovered a note on the door of his Plaza area apartment: rent was going up 28%.

The David Copperfield Apartment building near 48th and Summit streets had recently been purchased by PAC Investments LLC, a company that formed in 2018 and is owned by real estate flipper Peter Caster.

The note, signed by “Management,” did not say anything about the terms of tenants’ leases or security deposits.

Peters, a music professor at Johnson County Community College, emailed other building residents, setting off a chain of correspondence. Some were worried about the rent hike while others were frustrated about the prospect of finding a new place to live and moving during the holidays. Many were left with questions: Who do they pay rent to? Will the property owner still cover some of the utilities that had been included? And if they stay, will any improvements be made to the building?

The tenants also reached out to Kansas City’s City Council.

But a Missouri law restricting rental regulations limits the rules cities can implement, leaving tenants in potentially precarious situations.

City Councilman Eric Bunch represents the area where the apartment building sits.

“The Missouri legislature has unfortunately preempted us from instituting any sort of rent caps,” he said. “I think that rent control as a concept is maybe not always the best tool, but in some cases it would be nice to at least have the flexibility for a city to regulate unnecessary and burdensome rent increases, as what seems to be the case here.”

Peters said the “massive hike” as well as the timing “comes off predatory to me.”

Chris Peters, a tenant at David Copperfield Apartments, speaks about his experience living at the building on Monday, Dec. 5, 2022, in Kansas City.
Chris Peters, a tenant at David Copperfield Apartments, speaks about his experience living at the building on Monday, Dec. 5, 2022, in Kansas City.

“That comes off as not seeing this as a place where people live, their homes, but rather, a place to leech money off of people.”

Caster said the building was part of a portfolio of properties he plans to hold onto for a long time and that even with the increase, it is below the median rent price in Kansas City.

“I’m just trying to run a business and being extremely reasonable at the same time. This is the Plaza!” he said in a statement sent by email.

A two-bedroom apartment

Peters was born and raised in San Francisco, where the median price tag for a two-bedroom apartment is over $4,000 per month, according to Zillow.

“Missouri is not immune to what’s happening on the coasts,” he said.

He moved to Kansas City in 2016 to get his doctorate and has lived in a two-bedroom unit at the David Copperfield building for the past three years.

Last year, the previous owner raised rent $50, bringing it to $900. Peters thought that was reasonable and was happy to stay in the apartment, which has a spacious living room and a cozy nook overlooking the street that he has filled with houseplants and a piano.

With rent now going up to $1,150, he and other tenants have a decision to make. That has been a challenge because Peters said they have had a difficult time getting answers from Caster. On Dec. 1, Caster called him. Peters said he proposed giving tenants until Feb. 1 for the increase to take effect, but that was rebuffed. Eventually he got so frustrated he hung up.

“My goal is to eventually move out just on the principle because I can’t trust this person to communicate with me effectively,” Peters said. “I can’t trust that there won’t be another sudden massive rent hike.”

“I think I will move out, I just can’t imagine being able to do it by Jan. 1. And plus, I wouldn’t get my deposit back.”

Victor Oribhaber moved into a two-bedroom in May 2021. It was his first apartment, but now he is “already looking to see where I can go.” He said he would be more understanding of the cost increase if he knew the property owner would be making upgrades.

During a recent visit to the three-story building, several lights throughout the building’s hallways were out, leaving the stairs up to the second and third floors in darkness.

The first floor of the David Copperfield Apartments near Kansas City’s Plaza was dimly lit on Monday, Dec. 5, 2022. The building was recently bought by PAC Investments LLC.
The first floor of the David Copperfield Apartments near Kansas City’s Plaza was dimly lit on Monday, Dec. 5, 2022. The building was recently bought by PAC Investments LLC.

On Nov. 23, a day after the notes were left on tenants’ doors, Caster posted a video on TikTok.

“The plan is to raise rents. Of course I’ve got to do this, they’re below market,” he said.

He then says if he gets a few vacancies, he’s going to add laundry amenities to the units.

“After I add the washer and dryer, I believe I can get another $100 a month per unit,” Caster says in the video. “At that point, I’ll be making $3,000 to $5,000 a month profit after my expenses, and the goal is to get that property from $3 million to $4 million in five years.”

Caster has posted dozens of videos with titles like “Avoiding taxes!” “Don’t stay broke!” and “AirBnB cash cow!”

In his email to The Star, Caster said several of the tenants have gone forward with signing a one-year lease.

“I’m not getting rich off of this complex. It is a process and will take years of work,” he wrote. “I wasn’t born with a silver spoon in my mouth. I worked at the RailRoad for years while building my Real Estate business. I drive a used F150 and drive to The Copperfield to take out the trash twice a week.”

@kansascityrealestate Purchasing assets when others are worrying about the economy. Living in fear won’t get you ahead in the Real Estate game! #kansascityrealestate #realestate #investor #kc #multifamily ♬ Money for Nothing - Dire Straits

Tara Raghuveer, founding director of KC Tenants, said the option to pay a large increase or move out is “a false choice.”

“For most people, a massive rent increase is tantamount to an eviction without a day in court,” she said. “Most people in general can’t afford a 27% increase in what is already their largest monthly expense.”

Oftentimes, Raghuveer said, rent increases are not based on the quality of the home, but what the market will allow.

“The market is not some like amorphous, floating being. The market is shaped by the behaviors of people and landlords have a role to play in shaping a market that is actually fair.”

Missouri law

In 1989, Missouri’s General Assembly passed a bill prohibiting cities from adopting ordinances regulating rent.

Gina Chiala is executive director of the Heartland Center for Jobs & Freedom, one of the organizations the city contracts with for its Right to Counsel program for tenants.

Chiala said the longstanding law usurped local power, allowing landlords to charge as much as they want even if it leads to a housing crisis.

“These are crises that can be controlled, but the legislature won’t allow it,” Chiala said.

“Missourians should pass a law that restores cities’ power to do what their residents need.”

Raghuveer said KC Tenants has considered fighting the law, but has no imminent plans to run a campaign.

Rep. Patty Lewis, a Democrat representing Kansas City, said she supports repealing or amending the state law, but isn’t sure the political will exists.

“Tenants need protections from predatory landlords, and local municipalities like Kansas City should have the ability to regulate rent increases to an extent,” she said in a statement. “Massive surprise rent increases like what we’re seeing at the David Copperfield could put people out of a home they’ve inhabited for years, and it gives tenants almost no time to prove they can still afford to stay in that property.”

Councilman Bunch said he wants the city’s legal department to analyze the state law.

“I think that we could determine what wiggle room we have in light of that statutory preemption — is it just the cost of rent that is preempted?”

In the meantime, his office is connecting tenants to the Right to Counsel program, which provides free legal assistance. While renters like Peters have fewer protections under month-to-month leases, tenants in the middle of yearlong leases generally should be able to continue under the terms of that agreement.

And while the state law may never change, housing advocates said the city can take still take steps to help renters, including enforcing the city’s Tenant Bill of Rights, denying large tax breaks for developers and supporting affordable housing.

Last month, Kansas Citians voted in favor of investing $50 million in affordable housing initiatives, the largest commitment to housing in the city’s history.

When asked about protections for tenants, Monica Castro, a spokeswoman for Kansas City’s housing department, said the city had no comment.

For now, Peters is not sure where he will end up. But he would like to see stronger protections like getting 60 or even 90 days notice of a rent increase which would help people save money to move and give them adequate time to secure a new apartment. He would also like to see the state reverse course and the city enact an annual maximum on rent increases, similar to regulations in his hometown of San Francisco, where increases are capped at 2.3%.

“I think the impact would be huge,” he said.