Minneapolis landlords push back on housing discrimination proposal

MinnPost photo by Peter Callaghan
Council Vice President Elizabeth Glidden speaking to Minneapolis apartment owners on Thursday.

The first meeting between Minneapolis apartment owners and two council members who’ve floated the idea of changing housing discrimination laws in Minneapolis started with a struggle to define terms.

Area landlords wanted to know if the proposed ordinance, which is being considered by Council Vice President Elizabeth Glidden and Council Member Abdi Warsame, is going to mandate that building owners within the city accept housing vouchers under Section 8, the federal program that helps low-income residents find market-rate apartments via a government subsidy?

“That would not be my language at all,” Glidden said. “What we are saying is you could not use a discriminatory reason for saying no.”

That is: a landlord or manager couldn’t run ads that say “No Section 8,” under the law, she said. While a property owner could still conduct background screenings, such screenings would have to apply evenly to all applicants.

Still unsure, one of the landlords asked Glidden again: “Do I have to participate in a Section 8 program?”

“I think you’d have to consider participating,” she said. “If someone comes to you and says I have a housing choice voucher, you need to look at that applicant as you would every other applicant. If they meet your screening criteria … then yes, you would need to go through that process.”

‘Not a partnership’

That was the answer that the 40 or so multi-family building owners and managers expected when they showed up at a city hall meeting Thursday. It was not, however, the answer they wanted to hear.

Most of those who spoke, many of whom are members of the Minnesota Multi-Housing Association, described themselves as opposed to any mandate that would require them to accept the vouchers. “It’s not about the people. It’s not about the rent. It’s about this,” said Mark Jossart as he held up the housing contract that the federal government requires owners who take vouchers to sign. “The program is broken and it has to be fixed.”

Bernadette Hornig, who is part of a family-owned property firm that has some Section 8 voucher tenants, said there are problems with the program that are fixable. “Let’s not start with a sword when we can use scissors,” Hornig said. “Let’s have more dialogue and less of what I feel is a smack down by the city.”

That language echoed the response last year to the city council’s fair scheduling proposal that was scuttled due to the objection of business owners — especially small business owners. Then businesses objected to what they saw as suggestions that they didn’t support working families. Thursday, Hornig said the plan to make the Section 8 ordinance an amendment to the city’s existing civil rights ordinance suggested that she is violating someone’s civil rights by not always accepting vouchers. “That bothers me deep in my core,” she said.

Courtesy of HOME Line

Even some who take part in the Section 8 program said they find the program to be frustrating and costly. Joe Abraham described an inspection program that often requires apartments to stand empty between initial inspections and follow-ups by the federal Department of Housing and Urban Development (HUD), which administers the program, even for minor flaws that can be repaired immediately.

“This is not a partnership,” Abraham said of HUD. “We volunteered, so I’m not looking for sympathy, but if someone doesn’t want to participate in the program, I understand.”

Dan Largen, who works with nonprofit housing agencies that help place the homeless, veterans, people with mental illnesses, and other hard-to-house people, said he doesn’t have any of the problems with those organizations that he does with HUD. “Each of us who don’t participate would accept housing choice vouchers in a heartbeat if the process worked as smoothly as it does in all the other housing programs we deal with that are administered locally,” he said.

Equity issues

Glidden expected the criticisms of the way the federal department of Housing and Urban Development runs the program, especially in the way it requires inspections of apartments before they can be rented to a voucher-holder. She and Warsame have been working on the issue for two years, after hearing concerns from voucher holders and fair-housing advocates about the difficulty of finding apartments that will take vouchers.

Other council members have complained that the voucher program, which is supposed to help low-income tenants rent anywhere in the city, forces eligible tenants into areas that already house most of the city’s poor. One reason for that: The buildings that do take part in the program tend to be located in racially concentrated areas of poverty — the wards in north Minneapolis, Near-North, and in the central city areas represented by Warsame.

In a letter to the Minneapolis Public Housing Authority in 2014, Council Members Blong Yang and Barbara Johnson asked that the authority stop the use of vouchers in their wards, which together contain one-third of the city’s Section 8 housing, until voucher use was balanced in all 13 wards.

“If equity is our objective, all wards should provide housing opportunities to our Section 8 resident,” the two wrote. No such policy was adopted.

While a shortage of participating building owners in some wards is a contributing factor, so are rent prices. The program sets a maximum rent that voucher holders can pay, and rents in some parts of the city tend to exceed that range.

Warsame said that 76 percent of the 5,200 voucher beneficiaries in Minneapolis are black; and 58 percent of the units rented are to families with children, 82 percent of which are led by women. The average income of the people who get the vouchers is $13,000 a year.

Response to court decision

Last fall, HOME Line, a tenant advocacy organization, examined rental listing on two common sources: HousingLink and Craigslist. On HousingLink, which helps people locate affordable housing, the volunteers found that 72 percent of available units accepted Section 8. But a similar survey of Craigslist found that just 13 percent of available units took voucher holders.

Minnesota law already bans housing discrimination based on race and color, creed and religion, marital status, sexual orientation, disability and family status. It also bans such discrimination based on someone’s “status with regard to public assistance.”

That language was thought to cover tenants seeking to rent homes with the use of vouchers. But a 2010 state court of appeals ruling said, ‘No.’ In Jimmie Edwards v Hopkins Plaza, the court ruled that that language did not require a landlord to take part in the Section 8 program, since neither Congress nor the state Legislature specifically included use of vouchers under the law.

Courtesy of HOME Line

“Increasing affordable housing availability is a valid goal that would be advanced if all property owners were willing to participate in Section 8 programs,” wrote Judge Thomas J. Kalitowski. “But we are limited by the language in the statutes that the Legislature has enacted. Thus, the issue of ensuring affordable housing availability is an issue for the Minnesota Legislature or the United States Congress.”

Minnesota’s lawmakers haven’t changed the law, but those in other states and other cities have passed laws that prohibit using  a person’s “source of income” as a reason to not rent a house or apartment. Washington, D.C. and five states — California, Connecticut, New York, Oregon and Wisconsin — do not allow landlords to cite vouchers as the primary reason to reject a tenant. There are also 22 cities, including Seattle Buffalo, St. Louis and Chicago, with similar laws.

Council to consider this summer

The draft ordinance prepared for Glidden and Warsame would amend the city’s civil rights ordinance. It would specifically add Section 8 and other tenant-based federal, state and local rental assistance under the definition of “public assistance program.”

The ordinance, if passed, would take effect Jan. 1, and includes two exemptions: duplex owners who live in one of the units; and landlords whose participation in the Section 8 program “would impose an undue hardship” on them. The city Civil Rights Department would draft rules and make undue-hardship determinations.

Glidden has said she is looking at creating a damage fund to help reimburse building owners for damage caused by tenants using Section 8 vouchers. No language describing that program has been released yet, but a similar program in Oregon covers damages up to $5,000, though it requires a building owner to get a judgement in small claims court.

Glidden also said she is receptive to concerns about the inspection program and wants to look at ways to better coordinate the federal government and city processes. The city housing authority has recently accepted an offer from McKnight Foundation to conduct a “best-practices” audit of the voucher program to identify problems and suggest changes.

Eric Hauge, a tenant organizer for HOME Line who attended Thursday’s meeting, said via email that the bulk of owners’ concerns were with how the program operates. “While I think there there is some validity to some [concerns] (like inspections, which is clearly one issue that the city demonstrated they are working to influence), there are a variety of issues that a simply misconceptions and myths about the program,” he wrote.

And with the vast majority of beneficiaries of the program racial minorities, female heads of households or disabled, “it’s remarkable that some today were saying this is not a civil rights issue,” Hauge wrote.

Glidden said she would continue to meet with both building owners and renters and expected the council to consider ordinance changes over the summer.

Comments (9)

  1. Submitted by Ray Schoch on 05/13/2016 - 11:47 am.

    “Do I have to participate in a Section 8 program?”

    “No, you are free to continue to discriminate against both individuals and families, based on race and income, as has historically been the practice in some sections of Minneapolis, and as the maps accompanying this article clearly illustrate.”

    • Submitted by Dennis Wagner on 05/14/2016 - 04:08 pm.

      Agreed!

      The real point of the article is clear: Concentration of poverty, and race/minorities; evidently the city is just betting that they can hold off a second Holman type decree, how long? Next one will cost $ Billions, keep it up folks, sooner or later those chickens are going to come home to roost. Statistics are statistics, Ms. Levy-Pounds is going to put the numbers together one of these days and its going to be a lot more than shouting matches at the park board! Strike 2 will be a lot more expensive and punitive than strike 1. Seems our Mayor is clueless on what is going on under her nose

  2. Submitted by joe smith on 05/13/2016 - 11:49 am.

    Two interesting points

    First point, HUD is hard to work with, knock me over with a feather! So the folks who have gone out on a limb to get a loan to buy rental properties are frustrated by the inefficiency of a Federal program that doesn’t care if they are profitable or not. News flash, the owners of rental properties are trying to make money, HUD is trying to fulfill Federal regulations, they don’t fit very well together.

    Second point, folks are trying to eliminate “source of income” as a determining factor in whether the owner rents his space to an individual. If you were renting out your car for a year to a person wouldn’t his “source of income” be a factor? This makes no sense at all.

    Those are 2 reasons where Federal regulations make it hard to run a business. There are thousands of other regulations doing that same thing in every business being run here in the USA. That is why for the first time, more small businesses are closing than starting up.

    • Submitted by Jan Arnold on 05/13/2016 - 12:56 pm.

      HUD difficult to work with?

      What a surprise. In the early 1990s (during a recession) a house in our neighborhood was vacated by the owners and HUD now controlled the house. My husband and I were very interested in the house. We found the owners who had abandoned the house, talked to the bank that still held the mortgage, etc. We offered to buy the house for what was owed on it, bring taxes up to date, etc (it was a nice house and was worth more then what we offered). The bank was happy to possibly get their money and tried to help us. HUD would not talk or deal with us. Months later they sold the house for about $50,000 less then we were will to pay (and below the appraised market value). Just one example of how HUD works (or in many cases doesn’t work).

  3. Submitted by Neal Rovick on 05/13/2016 - 03:59 pm.

    It’s more complicated than this….

    In the low percentage areas, what are the average rents? The Hennepin County Fair Market Rent from HUD is about $ 300 less than the median rent in the city. So it is likely that these areas have higher than rent covered by a voucher.

    In the low percent areas, how much of the housing is single family housing as opposed to multi-family housing ?

    What are the transit opportunities in these various low-percentage areas–if you can’t there or back, what is the attraction there ?

  4. Submitted by Sara Bergen on 05/13/2016 - 07:40 pm.

    Clarification

    The article indicates that HUD is the entity that does the inspections. This is not the case for tenant-based housing choice vouchers (commonly referred to as section 8). In Minneapolis, the Minneapolis Public Housing Authority (MPHA) is the entity that completes lease-up inspections and performs most of the administrative duties related to the vouchers. HUD (via congress) provides the funding for the vouchers, but MPHA is responsible for most operational, day-to-day duties for vouchers and public housing in Minneapolis.

    It can take some time to inspect the units, but I am sure if there was a concerted effort among the City, MPHA, housing advocates, and other stakeholders there could be progress on decreasing the inspection turnover time. Inspecting the units is important as it serves to ensure housing paid for in part with federal funds is “decent, safe, and sanitary”. Housing quality standards (HQS) is the inspection standard used, and it is by no means overly burdensome. and helps to discourage unscrupulous landlords who prey on voucher holders due to their financial vulnerability.

    Here is a link to the HQS requirements: http://www.hud.gov/offices/adm/hudclips/guidebooks/7420.10G/7420g10GUID.pdf

    Also, I believe (although do not know for certain), that the landlord can keep the housing assistance payment (HAP–the portion of rent received from the public housing authority) for the month when the family moves out of the unit. This is not likely all of the rent since the tenant pays 30% of his/her income, but does give some financial relief during the time it takes to get the unit re-inspected.

  5. Submitted by Jeff Barnes on 05/24/2016 - 12:29 pm.

    Local Governments CANNOT force you to take Section 8

    Ms. Glidden and Mr. Warsame need to educate themselves on what local governments can and cannot do when it comes to passing local laws that concern Federal programs.

    1. Section 8 is a VOLUNTARY Federal program. Property owners are under no mandate or law to accept Section 8 or participate in the program. Landlords need to seek legal representation and file a class action suit against the city and name Ms. Glidden and Mr. Warsame in the suit. What they are trying to do, through intimidation, is unconstitutional.

    2. Currently there is a lawsuit heading towards the Texas Supreme Court on a similar law passed in Austin. The law has been found unconstitutional in all of the lower Texas courts and the Texas Supreme Court is expected to uphold the lower courts verdict. You can google for information on that. In the mean time the Texas State Legislature passed a state wide law that forbids any county or city government from passing any law that mandates property owners participate in the Section 8 program.

    Meanwhile use word of mouth to rent your units, don’t advertise them and don’t put No Section 8 in the ad if you do. Keep yourself off their radar or they will try to drag you into court and take your property.

    Keep your rental requirements high. A 650 minimum credit score, do complete criminal, background and eviction investigations. Make your properties non smoking and no pets. If you have good tenants now do everything you can to keep them. If that means not raising their rent then don’t raise it, keep them happy and save yourself untold grief.

    The reasons that landlords are fleeing Section 8 is due to the fines and fees the government will impose on you, it gets worse every year. If you don’t pay they slap a Federal lien on your property and you lose it. If you sign that Section 8 agreement its on the governments paper and their terms and you will be at their mercy. Research and learn all you can about your rights and again I suggest you band together and file suit.

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