Why They Don’t Care About the Mom-and-Pop Landlord

If you spend any time around HAPCO or other housing-provider groups in Philadelphia, you hear the same argument over and over again: most landlords are not giant corporations. They are mom-and-pop landlords. Retirees. Families. People who own a duplex, a rowhome, maybe one or two properties as an investment or retirement plan.

And the argument is usually presented as if that fact should matter to City Council.

It doesn’t.

City Council does not care about the mom-and-pop landlord. Housing-provider groups need to stop pretending otherwise, because there are three structural reasons the argument does not work: the ratio, the relationship, and the roots.

Start with the math.

Philadelphia has roughly 338,000 renter households. The best comprehensive study of Philadelphia landlords, conducted by Pew and Reinvestment Fund, estimated about 55,000 landlords operating in the city. Roughly 60 percent had Philadelphia mailing addresses, and about 80 percent were individuals rather than corporations or nonprofits. That gets you to roughly 26,000 individual landlords with Philadelphia addresses.

On the renter side, those 338,000 households contain roughly 592,000 voting-age residents.

The political ratio is therefore about 22 voting-age renters for every one local individual landlord.

That is the first thing landlord groups need to accept. If you are a member of City Council and an issue is framed as renter versus landlord, one side is roughly twenty-two times larger than the other. That is a hell of an incentive.

For every mom-and-pop landlord telling a councilmember that a new regulation is killing him, there are roughly 22 voting-age renters talking about high rents, bad repairs, security deposits, evictions, or landlord power. Guess which story has more political value.

The standard mom-and-pop statistic actually makes the problem clearer. Pew found that roughly 73 percent of Philadelphia landlords own only one or two units, but those landlords control only about 18 percent of the city’s rental units. Most landlords may be small, but most rental housing is not controlled by the smallest landlords. (Pew Charitable Trusts)

The political math is awful for landlords.

That is the ratio.

The second problem is the relationship itself.

Think about buying a taco. You hand somebody four dollars and they hand you a taco. The four dollars leaving your hand is visible, but so is what you received. You can hold it, smell it, eat it. The cost and benefit are both immediate and concrete.

Rent works differently.

Every month, $1,500 disappears from your bank account and the apartment looks exactly the same. You are sitting in the same living room, under the same roof, looking at the same kitchen. The payment is painfully visible, while most of the value being provided is invisible.

The tenant does not see the capital that had to be invested to build, buy, finance, or renovate the property. They do not see the property-tax bill, insurance premiums, compliance costs, vacancy risk, or the money that has to be set aside for the roof, boiler, sewer line, electrical system, or next major repair. They do not have to worry about a fire, catastrophic damage, a vacant unit, or a six-figure capital project. The housing provider carries those risks in the background.

And when the landlord is doing a good job, almost none of that is visible. The roof does not leak, the heat comes on, the plumbing works, the taxes get paid, the building stays insured, and the major systems keep functioning.

Nothing happens.

That is part of what the tenant is paying for, and “nothing happened” is an incredibly difficult product to appreciate.

It is why people hate paying insurance premiums. You see the premium leave every month, but the value feels abstract until something terrible happens. Rental housing has the same problem, except the landlord’s power is also extremely visible.

You may not see the property-tax payment, the insurance policy, or the reserve account, but you absolutely see a rent increase, a nonrenewal notice, a late notice, or an eviction filing. You see the landlord telling you what you can and cannot do in the place you call home.

So from the renter’s perspective, the relationship can easily become: I pay this person $1,500 every month, they control the place where I live, and at the end of all of this they still own the building.

That story is simple. It is emotional. And politically, it is much easier to sell than an explanation about capital reserves, vacancy risk, taxes, insurance, and long-term maintenance.

That is the relationship problem: the cost is visible, the power is visible, and most of the benefit is invisible.

Put that on top of a 22-to-1 numerical disadvantage and you have an incredibly easy political fight to pick.

Then there is the third reason landlords are such an attractive political target.

The house has roots.

A business can move. A resident can leave. Capital can go somewhere else.

A building cannot.

A company can open its next office in another city. An investor can put the next dollar into Montgomery County, Florida, or the stock market. A resident who decides Philadelphia no longer works for them can vote with their feet.

The rowhouse stays exactly where it is.

City Council can tax it, regulate it, inspect it, license it, add compliance costs, and create new legal risk. The building will still be sitting there tomorrow morning.

A landlord can sell, of course. But that threat is not very frightening politically.

The landlord says: “That’s it. I’ve had enough of these rules. I’m selling.”

The political response is basically: “Fine. Someone else will buy it.”

And in the short term, that is true. The house did not disappear. The deed changed hands.

The damage happens more slowly. Capital looks elsewhere. Investors demand higher returns. Marginal projects stop making sense. Renovations do not happen. Costs work their way into rents. The next investor decides another market looks better.

But none of that happens cleanly enough or quickly enough for voters to connect one ordinance with the eventual result. The building just sits there.

That is why real estate is such an appealing target. The constituency is small, the relationship is already sour, and the asset itself cannot leave.

The ratio. The relationship. The roots.

Once you understand those three things, it becomes obvious why the mom-and-pop landlord argument keeps failing.

So stop using it.

Stop trying to make City Council feel sorry for the mom-and-pop landlord. Nobody cares.

There are too few landlords. The relationship is already poisoned. And if one landlord gets fed up and sells, someone else buys the house.

The argument needs to be about the renter.

If a regulation is badly designed, do not lead with how much it costs the landlord. Explain what it eventually costs the renter.

If it makes an apartment more expensive to operate, that cost works its way into rent. If it increases risk, owners require a higher return. If it makes marginal properties uneconomic to renovate, fewer get renovated. If it makes rental housing less attractive, capital goes somewhere else.

Those are renter problems.

Take lead testing. Politically, “we are protecting children from lead” is an incredibly powerful message. Walking into City Hall and responding, “But this is expensive for mom-and-pop landlords,” is useless.

If the regulation is poorly designed, ineffective, expensive, or abused, prove it and translate the cost into rent. Do not tell the tenant that a rule costs the landlord another $250 per year. Tell the tenant what it means per month for the cost of their apartment.

That is the political argument.

The renter cares about rent going up. The renter cares about having fewer apartments to choose from. The renter cares when a building does not get renovated or when investment dries up.

So stop framing bad housing regulation around the landlord.

Bad regulation is bad because it makes housing worse for the renter. It raises the renter’s cost, reduces the renter’s choices, discourages investment in the renter’s housing, and makes safe, quality apartments harder and more expensive to provide.

Stop asking City Council to care about the mom-and-pop landlord.

They don’t.

There are 22 people on the other side for every one of you.

Talk to the 22.

The winter slump really dragged things out with a peak of 75 days on market, but we are seeing a much leaner 41.8 days as of August. This downward trend proves that the inventory glut is being soaked up and the market is regaining its momentum. It is a clear signal that well-positioned properties are moving fast again.

Lead volume peaked at 3.5 per day in June and is currently holding steady at a healthy 2.4 in August. This is exactly double the demand we saw during the December lows, showing that the rental market is still extremely active. It is a strong sign that the operational cycle is moving in the right direction for property owners.

Philly rents are on a steady climb, hitting nearly $1,770 this July as the market continues to tighten. Even with the inventory spike we saw in the spring, the supply is getting soaked up fast and driving prices higher. It is a clear supply and demand win for operators who stay ahead of these market cycles.

It is wild that public housing units are costing $315k a pop because of years of Philly red tape and rigid federal labor mandates. This is a total process failure since no private investor could stay afloat with those kinds of delays and costs. If we want to actually fix the housing supply, we have to let operators move with the efficiency of the private market instead of drowning in bureaucracy.

The map for Opportunity Zones 2.0 is being finalized right now and the political horse trading is in full swing since 30 percent fewer tracts will make the cut in Philly. Getting these designations right is critical for drawing capital into underutilized areas where permit activity is already showing promise. If you are an operator with a project in the works you need to be watching these updates closely because the window for public input closes on August 21.

Investor sentiment has hit an all-time low as rising finance costs and limited inventory make the numbers harder to crunch than ever. While nearly half of the market feels like things are getting worse, the reality is that the current volatility is just a demand for better operational discipline. If you are sitting on the sidelines right now you are missing the chance to identify the stable assets that will carry you through the next cycle.

I just had another owner client try to evict a tenant who has not paid rent in months, only to get hit with a $12,000 lead countersuit from the tenant’s taxpayer-funded attorney.

The alarming part is that the apartment was certified lead-safe about six months ago. Elevated lead levels have never been found in the apartment.

The attorney is now claiming damages for an earlier period of noncompliance and attacking the current certification itself, arguing that the testing company did not properly perform or report the lead dust testing.

So the owner paid to have the property tested, got a lead-safe certification, filed an eviction for nonpayment, and is now defending a five-figure countersuit brought by an attorney the taxpayer is paying for.

Double-check your lead paperwork.

Make sure the property was properly tested by a qualified lead professional. Make sure you have the dust-wipe results and certification. Make sure the paperwork was provided to the tenant. Make sure it was properly uploaded to Philadelphia’s Lead Certification system. And make sure it is still current. Lead-safe certifications are generally valid for four years. (phila.gov) (leadcertification.phila.gov)

Do not assume that because you paid someone to handle the testing, everything was done correctly.

Philadelphia’s lead law can expose a landlord to rent refunds and other remedies for periods of noncompliance. (phila.gov)

I cannot stress this enough: check it before you need it in court.

Because once you file that eviction, the tenant may get a taxpayer-funded lawyer whose first move is to go through your lead paperwork looking for a mistake.