As our management company grows, I’ve been doing a lot of thinking about how we affect the communities in which we work.
Obviously, property management companies don’t have great reputations. Most people would probably prefer to rent from a nice, local mom-and-pop type who might occasionally forget to raise the rent, instead of a faceless corporation relentlessly focused on generating profits for owners.
But I think big property management companies actually do something really amazing for society: They level the playing field for racial and ethnic minorities.
Why?
Well, your local landlord is likely to be pretty, shall we say “picky” about whom he lets into his building. First of all, he may live on-site. And, second, the building probably represents some large fraction of his net worth. So, if he’s at all inclined towards allowing race to play into his decision-making, it’s likely he will, since the stakes are high for him.
Management companies face totally different incentives in choosing tenants. As a management company gets big, it’s owner is unlikely to approve every tenant personally. Instead, the company puts in-place standards for prospective tenants which allow someone else in the company to approved applications delivered by the leasing agents.
Unless the owner is a real asshole or enjoys being sued, the standards are going to relate to income and credit score, not race.
And the agents and employees who are in charge of leasing have no incentive to do anything besides lease to anyone who meets or exceeds the established standards, since filling apartments is how they get paid.
The result: Professional management companies will tend to fill their buildings with people who can afford the units, regardless of race or ethnicity. And that’s a very good thing.