With rental companies looming, St. Louis area homeowners are taking matters in their own hands

ST. LOUIS COUNTY — Mike Moehlenkamp and his neighbors had had enough of absentee landlords in their north St. Louis County neighborhood not taking care of their rental houses.

Contacting the owners proved to be difficult, if not impossible: One problem house, he recalled, was owned by a limited liability company that traced back to an investment firm in the Virgin Islands that neighbors could not reach. And St. Louis County, Moehlenkamp said, wouldn’t deal with the issues.

So in late 2021, Moehlenkamp’s 1,200-home Wedgewood subdivision, situated between Coldwater Creek and Lindbergh Boulevard in unincorporated North County, enacted a new rule through the homeowners association that prohibits any house being rented out.

It’s a tactic that has gained ground as the number of single-family rental homes in the St. Louis region has doubled over the past decade, and frustrated homeowners have watched as homes turn into rentals, fall into disrepair or worse and local authorities fail to fix the problems.

“We’ve actually had some rental property owners or investment owners who bought a house, and when they were told they couldn’t rent it, they turn around and end up selling the house to an individual that lives there,” Moehlenkamp said.

Real estate investors — from the mom-and-pop owners to the big, out-of-state companies — own 34,000 single-family houses in the St. Louis region, according to a Post-Dispatch analysis of real estate records. The biggest numbers trace to out-of-state companies that own thousands of properties they operate as rental houses. Some neighborhoods have flipped from being nearly all homeowners to nearly all renters.

“I think it destroys the neighborhoods. They have no vested interest in the property,” Moehlenkamp said. “That’s what I think the big problem is: There’s no vested interest in the community.”

Some neighborhoods have combated the rise of rental companies through enacting stricter regulations, called indentures, which establish rules and procedures of a subdivision. Indentures are created by homeowners associations, or HOAs, and have to be voted on by homeowners before they’re recorded with St. Louis County. How many votes are required to create a new rule depends on the particular HOA. They’re legally binding documents recognized by the state of Missouri and the county.

Attorney Frank Vatterott said a ruling by the Missouri Supreme Court about four years ago made it possible for neighborhoods to enact such rules. But he questions whether the indentures could legally prohibit homeowners from renting out their own properties.

“I don’t think the out-of-state companies (would) have a leg to stand on. But owners of properties may have a claim,” Vatterott said. “I think there’s some real questions about that.”

For over 25 years, Patty Murray has watched foxes, turkeys and other wildlife traipse through her quiet Castlereagh subdivision, located near Old Jamestown Road and the Missouri River.

The neighborhood is racially and economically diverse, reflective of North County as a whole, she said. It’s a place where neighbors know each other and where young families are settling again.

But over the years, Murray and her neighbors have grown incredibly worried about encroaching rental companies that have gobbled up thousands of homes across the St. Louis region, particularly in North County. At least two homes in the 154-home Castlereagh subdivision are owned by out-of-state companies that operate them as rental houses. A third is owned by a bank. All, Murray said, have had constant issues with maintenance and upkeep like tall grass, weeds and a children’s swimming pool that had dark, smelly water that a tenant left for weeks.

“The whole area is a nice middle-class community with good people. And we don’t need these big rental companies coming in and ruining that for us by just wanting to make money,” Murray said. “It’s just never a good thing if a corporation takes over a neighborhood.”

Castlereagh homeowners are looking at Wedgewood for inspiration. They’re discussing new covenants that would restrict rental properties, Murray said, though the effort is still in its infancy.

Murray’s neighbor Jim Jensen is concerned about the legality of any restrictions. But he’s still worried about the influx of rental properties and fears that one poorly maintained rental house will have a snowball effect on the whole community.

“I’ve seen it. I’m 70 years old. I’ve lived in all kinds of areas in North County, (and) I’ve seen nice areas go down and go down quickly,” Jensen said.

Elsewhere in the region, homeowners are trying different approaches.

In the south St. Louis neighborhood of Dutchtown, homeowners have banded together to watch for problem landlords.

The city has been a hot target for real estate investors drawn to the area because of an abundance of cheap properties. Investors owned 5,691 houses in 2021 — an 80% jump from the 3,160 houses they owned in 2011, according to a Post-Dispatch analysis of real estate records.

Joel Silliman is the block captain for the 4200 block of Louisiana Avenue. Over the past several years, homeowners here have tried to establish a clear line of communication with landlords to “avoid the seemingly inevitable train wreck” when they lease to bad tenants who bring drugs and violence to the area, he said.

They’ve been able to reach a few remote owners and get some problematic tenants evicted. One, Silliman said, has taken a proactive role in communicating with him in what Silliman said is likely his block’s most “successful relationship.”

This past spring, another house on Silliman’s block was sold to an out-of-state investor. It was frustrating because Silliman knew one of the homebuyers who bid for the home — Jarred Irby, who also works for an affordable housing organization that operates in and around Dutchtown.

Irby and his wife offered $180,000 on the house that was listed for $150,000 and even had a letter from the block’s neighbors endorsing the couple. But they ultimately lost out to a real estate investor based in California.

Irby was able to find another house on the same block a few weeks later — though the home isn’t big enough for their growing family, and they anticipate they’ll have to find a bigger house at some point.

“It’s definitely frustrating that it’s challenging for people to find affordable options because it’s not like we’re a rich neighborhood at all,” Irby said. “But you know, we pretty much have out-of-town investors that are just running rampant everywhere.”

Josh Renaud of the Post-Dispatch contributed to this report.