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Minneapolis holds first public hearing on controversial tenant screening proposals

The City Council’s housing policy and development committee unanimously endorsed the proposed ordinance, a move that sets up a vote by the full council next month.

South Mpls apts
MinnPost photo by Peter Callaghan
Under the current version of the tenant-screening proposal, to determine an applicants’ eligibility for a unit, property owners would not be able to use felony convictions that occurred more than seven or ten years ago (depending on the severity of the crime) or misdemeanor offenses that are more than three years old.

Carrying signs and sharing personal stories of housing discrimination, renter-rights activists clashed with Minneapolis landlords inside City Council chambers Wednesday afternoon over a controversial proposal to modify how property owners can screen prospective tenants.

Hosted by the city’s Housing Policy & Development Committee, the meeting was the first opportunity for the public to comment on the proposed policy package to limit what aspects of renters’ criminal, credit and eviction histories landlords can consider when evaluating a prospective tenant, in addition to establishing a cap on security deposits.

The committee unanimously endorsed the proposed ordinance, a move that sets up a vote by the full council next month.

In sponsoring the proposals, City Council President Lisa Bender and Council Member Jeremiah Ellison, argued that many tenants struggle to pay move-in fees, and that current background checks can uncover information that is not indicative of a person’s ability to be a good tenant, though landlords can use that information to deny applications. On Wednesday, some of them explained how the proposals are a positive step in boosting low-income residents’ access to housing, holding signs reading “Homes over profits” and “Do ‘property rights’ outweigh human rights?”

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The Minnesota Multi Housing Association (MHA), which advocates on behalf of some 1,900 property owners, disagrees. At the hearing, members of the group reiterated their argument that the council has embarked on a misguided effort to increase renters’ access to housing — one that could have unintended consequences for the city’s rental market and tenants’ safety — while doing nothing to get at the root cause of the issue: a lack of affordable housing

“They’ve gone too far,” John Prebarich, who owns rental homes in the city’s Uptown area, said in an interview last week. “They’re taking away our right as business owners.”

What’s being proposed

Under the current version of the tenant-screening proposal, to determine an applicant’s eligibility for a unit, property owners would not be able to use felony convictions that occurred more than seven or ten years ago (depending on the severity of the crime) or misdemeanor offenses that are more than three years old. 

Council Member Jeremiah Ellison
Council Member Jeremiah Ellison
The proposal also wouldn’t allow landlords to use vacated or expunged convictions, arrests that did not result in convictions or juvenile convictions in screening tenants. Property owners would maintain the ability to deny tenants with certain high-level criminal convictions, including sex offenses against minors and crimes involving methamphetamine. 

The ordinance would also prohibit landlords from denying people on the basis of their credit scores alone. Property owners also wouldn’t be able to consider previous eviction judgments — technically called unlawful detainers (UDs) — that are three years or older. 

Property owners would have the option to not adopt the screening standards if they conducted individual assessments of tenants, which would involve considering additional information from applicants before making decisions.

The policy package in Minneapolis would also disallow landlords from collecting security deposits that are more than half one month’s rent in cases where applications already require first and last month’s rent or other fees, as well as deposits that are more than one month’s rent in other situations. The ordinance would also allow tenants to pay security deposits in installments over a three-month period in some cases.

Landlords say the looser requirements on background checks could affect the safety of current tenants and impact property owners’ business models. Nils Snyder, who owns a five-unit home in Lowry Hill, is among the landlords who is opposed to the new proposals. He said the draft changes to screening criteria which are now aimed at keeping out problem tenants, such as those who may damage property could add even more costs amid rising property taxes and a rental market in which profits are marginally low and risks remain high.

“We make decisions that are financially based,” he said last week at an event organized by MHA. “That’s why you screen to make sure you don’t have a tenant who destroys things.”

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MHA also says the proposal is poorly worded, lacking clarity around several key issues. They point out the draft ordinance does not distinguish between former criminals who have graduated from rehabilitation programs and those who have just exited jail or prison, and that it leaves a gap in time between the look-back period for landlords and the years perpetrators of some sex-related crimes must register as offenders. The organization also argues the proposal seems to take some violent crimes less seriously than state sentencing guidelines.

If the council adopts the ordinance, the MHA also says the provision on criminal background checks would create a double standard, with state law saying property owners couldn’t employ people with violent criminal pasts to work in their buildings — while the city ordinance would bar landlords from denying those same people an apartment based on their criminal history.

Data lacking

At the center of MHA’s argument is the notion that the city is rushing to make the change before actually knowing what the relationship is between tenants’ criminal past and their ability to be good tenants. 

City Council President Lisa Bender
City Council President Lisa Bender
Among other things, the group feels council members need to do more research to understand the role of post-release recidivism and residents’ behavioral issues and how those issues affect the city’s rental market. “Rather than passing unproven and flawed ordinance, we urge the city to focus on solutions that address root causes of housing instability instead of papering over them,” MHA leaders wrote in an Aug. 23 letter to the council and Minneapolis Mayor Jacob Frey

Right now, little data exist on the consequences of implementing what housing experts call “Fair Chance” laws: ordinances that prohibit landlords from discriminating against certain prospective renters with criminal histories. Housing-rights leaders in Minneapolis and nationwide often point to one 2019 study by Wilder Research that found as time progresses, tenants with past criminal offenses don’t show negative qualities as renters, such as missing rent payments or damaging property. 

The Wilder report found that prior misdemeanors more than two years old don’t affect how a person behaves as a tenant, and felonies more than five years old don’t either. “Some of those lower level offenses should no longer apply,” Ellison, whose Ward 5 covers much of north Minneapolis, said in an interview earlier this summer.

But the Wilder research may not apply to rental populations as a whole, nor offer a one-size-fit all approach for policy makers. “We see immediate positive impact on individuals with criminal histories, but the systemic impact on the longer term — we’re going to have to wait a couple of years,” to understand it, said Deborah Thrope, a supervising  attorney at the California-based National Housing Law Project (NHLP). “We’re gathering data, and there’s a lot of education that has to happen with both prospective applicants and landlords, really within the next year.”

Where things go from here

Minneapolis is not alone in trying to recast tenant screening policies. From San Francisco to New Jersey, several cities and counties have approved Fair Chance laws. Of those cities, Seattle has taken the most sweeping approach, essentially prohibiting landlords from using almost all criminal histories in their screenings of prospective tenants. 

Portland has also approved new rules, which won’t take effect until next spring. To counter arguments from opponents during the policy-writing process, city staff there compiled renter statistics via an online system tracking applications and housing openings, as well as other data. The research showed the proposed screening requirements would increase residents’ access to housing, especially for households of color, said Jamey Duhamel, a city staff member who helped write the new rules.

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Minneapolis is also not alone in engendering controversy around the issue. A group of Seattle property owners is now suing the city over the law, arguing the ban on criminal histories violates their constitutional rights governing due-process, free-speech and property ownership. 

In light of some of the Minneapolis property owners’ concerns, Joey Dobson, a lawyer with the non-profit law firm Mid-Minnesota Legal who has been helping council members develop the proposals, emphasized that that some landlords in Minneapolis support the proposed changes or already comply with the proposed requirements. 

Dobson also highlighted that the ordinance maintains that “Minneapolis has broad authority through its police powers to enact regulation to further the public health, safety, and general welfare.” 

She said the proposals on screening criteria are just a few of numerous law changes housing-rights activists want enacted in coming years to strengthen legal protections for renters. “It’s important to remember the purpose these rules would serve to give people a chance at a place to live,” Dobson said.

Meanwhile, MHA spokesman Blois Olson said the association is organizing events to persuade council members to drop the initiative. Three neighborhood associations — West Phillips, Midtown Phillips and Ventura Village — have already expressed support for the group’s cause in opposing the ordinances, he said.

Note: This article was updated Wednesday afternoon.