The Elephant in the Room

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Before I start on this one I should warn you that this is going to be more of a thought piece than a statistical analysis. This is mostly because there is a dearth of statistical information on landlords as a group. While I will attempt to avoid any bleed through of my own personal biases I probably will not succeed entirely. I should also provide the standard disclaimer that I'm mostly speaking about the Chicago market here. Now with that out of the way, here we go.

It is a common assumption, almost a cliche, that landlords lean so far to the political right that they could tip over at any second. The old stereotype of the mustache twirling black hatted landlord who values money above all else and despises minorities, gays, and poor people is still very prominent. That's the image that's also been dogging the far right for years. It's a PR standby that's enforced by consistent media coverage. It's easy to make a connection between landlords and conservatives based on the public stories of notorious individuals who tick both boxes. After all, when a residential landlord makes it into the news they're usually in trouble for discrimination, or lobbying against rent control, or chilling in the Oval Office.

However, I would argue that for Chicago landlords the mental image you may have of a conservative landlord is not necessarily true. In fact, it's my thought that your average Chicago landlord is probably a left-leaning independent.

Landlords are not homogeneous.

I stated above that there isn't much statistical information on landlords. This is because they are not considered to be a viable statistical group. There are little landlords who own and occupy a two-flat. There are owner-managers who build a small private portfolio of C and D class buildings. There are large scale investors who collaborate to purchase enormous high rise residential. There are landlords who only own commercial or industrial properties who wouldn't touch residential with a ten foot pole. There are foreign investors who purchase apartment buildings for any number of reasons. For some landlords their rentals are their primary source of income, for others it's a side investment with no more importance than an IRA.

The Bureau of Labor Statistics has no occupational classification for landlords. There's a category for property managers but not landlords. The Census Bureau does surveys of political affiliation but does not cross-index those results against occupations or sources of income. With the two government statistical analysis groups off the table that leaves private survey groups. Gallup has surveyed investors but rarely breaks out real estate investors from the larger group. Pew has looked at voting and at homeownership, but not together. I did find a study on Redfin's blog about homeownership and political affiliation, but even that didn't look at landlords, and I'm not sure how much one can trust a real estate brokerage like Redfin as a reliable statistical source.

So if landlords cannot be viewed as a clustered group with unanimous opinions even within their own industry, it is not viable to assume that "all landlord" or even "most landlords" in Chicago or nationally are leaning to the right or left politically.

Residential real estate is a weird investment choice.

For most renters, they view landlording as a utility or possibly a hospitality based industry. But at its core it is investing. Apartment buildings are investment options in the same vein as the stock market, cryptocurrency and even savings accounts. They are containers where people with spare cash can put their money and expect it to grow over time. As investments go, real estate is a pretty solid choice but it is slow and risky, and nowhere near as popular as stocks. People looking for a quick return are not going to choose real estate. People who don't want to be tied to a single investment or group of investments for 10 or more years will avoid it. People who don't want to deal with the chance that their investment will burn down because some tenant was cooking meth inside will probably buy some shares of General Electric instead of an apartment building.

Even within the realm of real estate investing there are subdivisions. You can invest in real estate without choosing the residential (apartment) market. You could choose to focus entirely on office buildings, shopping malls, hospitals, or farmland. Residential landlording is a strongly self-selecting industry that appeals to a very unique group of stubborn individuals who probably all have ignored the advice of at least two or three very intelligent financial analysts.

Urban residential real estate in an area like Chicago is an investment with a massively variable human element, intensive government regulation and high risk. If you become a residential landlord you are setting yourself up to have to go into areas with high diversity, possibly high violence, and substantial poverty. You are choosing an investment that pretty much guarantees a couple of lawsuits per year. It's a situation where you are legally prohibited from discriminating against anyone. You have to be patient, hands-on, iconoclastic and accepting of human differences to deliberately choose Chicago residential real estate as your ideal investment. To me this does not sound like the description of a 21st century conservative, or any hardline Republican or Democrat for that matter. If anything it sounds to me like something that would appeal to political independents.

Chicago is strongly pro-tenant.

Most landlords are going to invest locally, with only a handful getting big enough to go national. If they're living in Chicago and investing in Chicago they are going to sort politically along the same lines as everyone else. Chicago has historically leaned to the left. A local Chicago landlord is also probably going to lean to the left.

Of course there are outside investors from more conservative areas of the country who choose to buy apartment buildings in Chicago. But if they're big enough to do that they probably already know that we have one of the most stringently pro-tenant legal codes in the nation. They probably also know that we're the only city in the nation that still has its own building code. For an outside real estate investor to deliberately choose to bring all of their their money to Chicago, they have to be willing to embrace that anti-landlord hostility. Not only that, but they will have to pay property taxes to a severely left-leaning county government and deal with any new laws that come out of a city council with 49 Democrats and 1 Republican. So outside investors are probably going to lean left too. Either that or they are investing in Chicago buildings as part of a diversified nationwide portfolio at a percentage that's too small for them to have any real say in the matter.

If you are a hardline conservative with enough buying clout to invest anywhere in the country you're not going to be building a residential real estate portfolio exclusively in Chicago. You'll go to Texas, Florida, Arizona, Las Vegas. Or overseas.

Landlording is local (mostly).

Of course all of the pro-tenant laws are set aside when it comes to the owner occupant landlords of small buildings like two-flats. They're exempt from the CRLTO and are even somewhat exempt from fair housing laws, provided they keep it on the downlow. Could Chicago's two-flat landlord population be riddled with conservatives? Possibly, sure. But the Redfin survey mentions that conservative homeowners preferred non-urban environments with religious homogeneity, while liberal homeowners are more open to a diverse neighborhood. A two-flat owner occupant might not have to deal with as many laws protecting their tenants, but they do have to live in the same building with them. I do not see a Chicago two-flat as an ideal living situation for a strong conservative.

But no matter where a landlord lives, most of the laws that will affect their bottom line are issued at the local level. Fair housing laws, Section 8 administration, property tax rates, zoning codes - all of these are handled by city or county governments. If you want to make decent money with property investments you have to play ball with politicians. So even if you are a conservative at heart, you've got to pay lip service to the liberals if you want to build an empire of Chicago apartment buildings.

This is not just a Chicago problem, either, no matter how severe our reputation for political graft may be. A couple of years back when we surveyed the political donation habits of the top 50 residential landlord CEO's in the country we found that most of them were spreading the contributions across party lines regardless of their personal preferences.

Managers, Developers and Agents.

Tenants who worry about the potential conservative leanings of their landlords will mostly be concerned that a landlord's politics will be expressed in the form of discrimination. It's a viable, if misguided, concern.

Your average conservative landlord with Chicago properties will be living elsewhere and using a property manager to handle the operation of the building. It is in a property manager's best interests to keep their clients out of court. No matter what an individual manager's personal leanings may be, they're going to be avoiding discrimination issues if they want to remain in business.

If you are a Chicago renter living with a two-flat owner they're probably a liberal, as we discussed above. If you're living in a building owned by a mid-sized Class C/D investor (e.g., Hunter, Beal, MAC, M. Fishman, etc.) then you've got a local owner who may be conservative, but who is advised by their agents and managers as to who gets approved for an apartment. You might deal with discrimination from the individual agents, but the political leanings of the landlords themselves probably won't enter into the picture.

If you are living in a Class A or B building - basically anything big with an on-site management office - chances are your building is owned by a corporation, not an individual. Decisions that could be affected by discrimination are going to be handled by computers. While there may be systemic problems affecting how those computers make decisions, they probably aren't a direct consequence of the political, religious, racial or sexual preferences of the owners. They're more likely a result of basic risk avoidance logic.

Besides, housing discrimination is not exclusively the domain of the political right. The stereotypical "bad tenant" - a financially insolvent and irresponsible lout with a history of criminal behavior and a tendency towards vandalism - is feared by landlords of any political leaning. If there's anything that unites landlords, it's the universal desire to avoid long, drawn out lawsuits. If you wind up dealing with deliberate discrimination from a landlord that doesn't mean they're a conservative. It just means they're a jerk.

Tenants might also be worried that a conservative landlord will be active in lobbyist groups that work against tenant interests. Again, viable but misguided. Most of the groups who are campaigning against current movements towards rent control and eviction reform are dominated by real estate agents, developers and executives at large-scale REITs. They want to make sure that real estate investment remains an appealing alternative to the stock market. They are working on behalf of their imagined potential future clients. More importantly, while the long term owners may come from either side of the political fence, the industries that build and sell the buildings to those long term owners tend to attract conservatives.

The real estate lobby in Chicago has historically worked contrary to the interest of renters. They lobbied against the CRLTO. They lobbied against desegregation. They notoriously engineered illegal practices such as redlining and blockbusting. These days they're lobbying against rent control and eviction reform. From the perspective of an agent, these actions all make complete sense. They want renting to be uncomfortable so people buy property to escape it. They want those who already own apartment buildings to buy more of them. But the real estate lobby reflects the interest of real estate agents while claiming to represent the interests of real estate clients.

In any situation where one loud group claims to be lobbying on behalf of another silent group - "for the children" or "for the immigrants" or "for the landlords" - raise an eyebrow and get the salt. Do landlords contribute to the lobbyist groups that claim to work on their behalf? Some probably do. But the majority? Probably not.

Norms and exceptions.

RentConfident doesn't include a landlord's political contributions in their reports. We also don't include or investigate a landlord's credit report, and for the same reason: neither should affect how they manage the operation of a building.

It takes a special kind of idiot to allow their politics to affect the future of their investment. Don't believe me? Check out this conversation thread from a landlord discussion board. The original poster asked if they can legally discriminate against a Democrat, but they got ridden out of town on a rail by the replies. Almost every reply mentions that a tenant's political affiliation should not matter as long as the rent gets paid.

There will always be exceptions to every trend. The majority of landlords do not want to get involved in lawsuits but there will always be a few who relish it so they can prove a point. Those are the ones you're going to hear about in the news. The majority of landlords toe the line on fair housing laws - it's the idiots who openly discriminate to a massive extreme that get the media coverage. Even the most prominent Republican landlord in the US - the one who currently lives in the White House - has changed political affiliation five times since 1987 and as recently as 2004 was on record as a Democrat.

So should you picture the typical Chicago landlord as a hardline conservative? Probably not. Should members of protected classes worry about a landlord's political preferences negatively affecting them as renters? Again, probably not. Should they worry about a property manager or agent negatively affecting them as renters because they are picturing the typical Chicago landlord to be a strictly right-leaning conservative? Probably yes.

Should renters avoid making blanket judgments about landlords as a group when they are actually just as diverse and random as the renters themselves? Probably yes.

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Published by

Kay Cleaves