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Minneapolis holds first public hearing on controversial tenant screening proposals

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?”

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.”

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.

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.

Comments (9)

  1. Submitted by Mike Schumann on 08/28/2019 - 12:29 pm.

    How about the city being liable to the landlord for any damage or unpaid rent that results from renting to someone who is in the protected class under this ordinance. That should resolve the landlords’ concerns.

    • Submitted by James Baker on 08/29/2019 - 12:55 pm.

      I like this proposal—an insurance policy against private investment losses that only occur due to limitations on how a landlord is allowed to manage his/her own property. High minded rule makers usually don’t need to live with the consequences of their edicts, so it’s easy to mandate policies that affect someone else’s livelihood. Put some skin in the game for them, too, and let’s see how eager they are to up the ante for private investors.

      For many rental properties, the net financial return on investment from monthly rentals is often quite marginal even in the best of times while a long-term landlord might reap a substantial gain upon selling an appreciated property.

      But if restrictions are too limiting on a new or existing landlord’s ability to carefully manage a property, this could have a depressing effect on rental property values, over time. Who wins or loses then?

  2. Submitted by Michael Friedman on 08/28/2019 - 02:59 pm.

    In their zeal to allow the racial disparities in criminal justice to provide cover for racially discriminatory provision of rental housing, the MHA, in its linked letter, makes a few errors worth noting.

    1) The Sentencing Guidelines determination of when convictions go stale is not based on predictions of behavior, but is used as a broad marker for when proximity of crimes has any relevance for enhanced sentences. That the commission determines a 15 year window in some instances is not based on a prediction of new crimes within 15 years, but the fairness of considering older crimes at all in the sentencing for newer situations.

    2) The statute barring building employees with certain criminal records — setting aside the likelihood that the legislation did not have any evidence basis but was enacted due to a single bad circumstance — is designed to prohibit access to other peoples apartment units, not the building itself. (Package deliveries, for instance, may involve access to building common space by people with criminal records, just as renters with criminal records under this ordinance will access building common space — but contrary to the letter the ordinance is not in contradiction because renters will not have keys to other units within the building.)

    3) I don’t have access to the Wilder study, but a data pool of nonprofit housing seems perfectly relevant: why would risk be greater if the housing is privately owned?

    The punishment for crimes are the sentences provided by courts. Punishment should not include lifetime barriers to housing or employment, perpetuating and giving cover for discrimination.

    • Submitted by lisa miller on 08/29/2019 - 08:59 am.

      Because often times public housing has the rent vendored or has on site support services. I agree with some of the proposals, but it fails to distinguish if someone is in prison did they engage in any type of programming to address their issues. I would also like to see more of what are the risk factors in people who repeatedly don’t pay rent. It is true, you can have a low credit score and then always pay your rent. Having lawyers at housing court is also a big help to renters to assist in mediation.

  3. Submitted by Dennis Wagner on 08/28/2019 - 03:20 pm.

    So, if the qualifications are loosened, then the city will ? when the landlord has to evict someone renting under the loosened guidelines, So, how does this help the overall rental situation? Meaning, a loosened guideline person(s) get to rent the apartment, which could mean someone that would have made the bar W/O the change does not, i.e. you still have a rental shortage! So, wouldn’t one think that some landlords already have different rental guidelines than others, suggesting that if passed all landlords will have to use the same set of guidelines? Then as above how does that develop more rental property available for occupancy? This idea really looks like a solution that creates more problems than it solves.

  4. Submitted by joe smith on 08/29/2019 - 08:17 am.

    There are many renters who have never been incarcerated, haven’t previously done damage to rental property, don’t have credit issues and are looking for housing. Those were the folks I wanted in my rentals.

  5. Submitted by Linda Rolf on 09/02/2019 - 03:40 am.

    I would suggest that the Minneapolis City Council do some research on the actual rental market in Minneapolis. The vacancy rate is approximately 3% and rents have skyrocketed ever since the luxury housing boom began. Even if a person could get approval for an apartment, house, etc. they would have to have a high wage to make their rent payments unless they shared their home with others. Access is much less of a problem than occupancy and affordability in my opinion.

    • Submitted by Pat Terry on 09/03/2019 - 02:19 pm.

      This is completely wrong and ignores basic economics The low vacancy rate is due to the lack of apartment construction over the last several decades. The number of units built has not kept up with population growth. The construction of new housing – “luxury” or otherwise – is not the problem. It is actually the solution. Prices will drop once the housing supply catches up to demand.

      • Submitted by Payton Powell on 09/26/2019 - 10:52 am.

        The problem is that there is nowhere to build but up and people don’t want multi-unit housing in their neighborhoods, especially the ones in nicer areas like all of SW Minneapolis, because it will kill property values. Developers could obviously build in areas that are less desirable but then they would be accused of gentrification if the apartments aren’t accessible or they wouldn’t solve a lot of the problems activists want to solve by trying to move people into nicer neighborhoods. Property rights are human rights and it is one of the basic tenets that this country was founded upon, denying the landlords the ability to screen their residents the way they see fit will potentially dissuade people from becoming rental property owners or from getting out of the business altogether and further shrinking supply.

        I was raised in the Lynnhurst neighborhood, where houses now go for a minimum of $400,000. When my parents bought in the mid-80’s they paid roughly $90k at a high interest rate because the neighborhood was so good. The neighborhood has only improved over time and that’s largely because they have kept multi-unit properties away from the residential areas, it’s also why property values are super high. It also means that landlords screen their tenants in the few rental properties that do exist in the area. Two existed on my parents block, the moment they had problem tenants that destroyed the properties they evicted and sold getting out of the rental game altogether. That is what will happen the more and more regulations Minneapolis continues layer on it’s citizens.

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