Minneapolis’ Catch 22: Regulating landlords without punishing tenants

Regulating landlords without punishing tenants

The City of Minneapolis is experiencing a unique housing problem that policymakers have not quite figured out how to solve. Beyond the all-too-well-known affordable housing crisis, the City has found that holding negligent landlords accountable to tenants has also created housing instability for those very tenants.

According to Ward 5 City Councilmember Jeremiah Ellison, who serves as vice president of the Housing Policy and Development Committee, the City is doing a better job than in the recent past on cracking down on negligent landlords. Those concerns have been exacerbated with cases like North Minneapolis landlord Mahmood Khan, whose rental license revocation last December left hundreds of tenants facing displacement.

The crackdown causes landlords, said Ellison, to “displace the most vulnerable person in the situation, the tenant they were housing,” he said.

“How can we successfully do the things we’re supposed to do as a city, which is condemn properties that shouldn’t be lived [in]; revoke licenses of landlords who shouldn’t have licenses; then in turn punish the last person who should be punished – arguably the person who’s been punished the most because they’ve had to live in the really crappy conditions?”

It also leaves renters with fewer housing options, added Kellie Rose Jones, director of community engagement for the Department of Regulatory Services. She noted that landlords rarely reach the level of negligence that Khan demonstrated, but it does still happen.

“We’re very aware that there are landlords who specifically interact with families who have fewer choices and can take advantage of them,” said Jones.

 According to Real Estate Today, the vacancy rate for the Twin Cities’ seven-county metro area was at 2.4 percent at the end of 2017. “The [housing] market totally squeezes the people at the bottom, people who are most vulnerable,” said Ellison.

As the MSR reported in August, the City put a band-aid on the issue with its $2 million Emergency Stabilization Pilot program to house some of the last remaining tenants from the Khan portfolio. The program allowed the City to buy up to 12 houses for tenants facing imminent displacement.

Participating tenants were also assigned caseworkers from NorthPoint Health & Wellness Center to provide additional services like wealth and health management training. All of this has put the City in the position of having to spend money to retroactively solve a problem it created, said Ellison.

Seeking a more long-term solution, Ellison and Council President Lisa Bender have drafted an ordinance, dubbed a “renters’ bill of rights,” which they hope to have the city council pass by the end of the year.

The proposed ordinance includes defining reasons for eviction as well as a relocation benefits package making landlords responsible for causing their tenants to be displaced. “Ethically, I think that there should be a lot of responsibility on the landlord,” said Ellison, adding, “I think right now we don’t have the legal tools to make that responsibility real and material.”

Minneapolis Mayor Jacob Frey has also stepped up to protect the tenant from further displacement. In his 2019 budget, he proposed funding that would allow the City to hold landlords more accountable as well as provide more support for tenants. With more than 50 percent of people in Minneapolis renting, he said, “You can’t neglect tenants when talking about affordable housing.”

In an email to the MSR, Frey highlighted three budget items that would benefit renters experiencing displacement due to negligent landlords through no fault of their own. They include $150,000 earmarked for an Eviction Representation Pilot program to provide legal representation for tenants facing a landlord in the court of law.

“[This would] level the playing field by giving tenants facing eviction in housing court legal representation and a fighting chance,” Frey stated.

He also wants to invest $175,000 to expand legal services for tenants as well as continue funding for a tenant hotline, which he said helped prevent more than 200 evictions in 2017. In addition, he is seeking to establish permanent funding for more housing inspectors.

Aside from Frey’s efforts, the City’s Regulatory Services Department, charged with enforcing the housing maintenance code for safe and decent residential housing, is also making changes. “The City is working on increasing the use of Tenant Remedies Actions which allow for tenants to stay in the properties that have a revoked rental license while a third party facilitates needed repairs,” said Sara McKenzie, media relations coordinator for the City.

The department is also looking at “upstream solutions” that would address the issues before a property is condemned, as well as working with community partners to assist tenants who are displaced because of negligent landlords, McKenzie said.

Ellison said other potential ordinances that would help get ahead of the problem of imminent displacement include Councilmember Philippe Cunningham’s proposed overhaul of the Conduct on Premises ordinance, which has created an eviction crisis in low-income neighborhoods. Also, Councilmembers Lisa Goodman and Jeremy Schroeder’s Notice of Sale ordinance gives housing groups a chance to purchase naturally occurring affordable housing that isn’t unsubsidized by government programs.

Changes like these, said Ellison, would reduce the need for more drastic programs like the Emergency Stabilization Pilot Program. “Even though this is a reactionary solution,” he conceded, “it was also the quickest.”