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Housing authority unveils program aimed at getting more Minneapolis landlords to accept vouchers

Minneapolis apartment
MinnPost photo by Peter Callaghan
The Minneapolis Public Housing Authority’s leadership detailed a series of incentives and policy changes meant to remove reasons cited in the past by landlords for not taking Section 8 tenants.

The Minneapolis Public Housing Authority is going to offer some carrots to get landlords to accept low-income tenants.

Come May, however, they’ll also have a stick.

In testimony before the Community Development Committee of the Minneapolis City Council this week, the authority’s leadership detailed a series of incentives and policy changes meant to remove reasons cited in the past by landlords for not taking Section 8 tenants, who pay rent with the help of government-subsidized housing vouchers.

Those incentives include a $250 bonus when a landlord joins the program and leases to an initial tenant; a deal with Home Depot to get discounts and rebates for purchases; and a new fund to reimburse landlords for damages and lost rent that exceeds damage deposits.

The inducements were spurred by complaints from rental housing owners and managers that the Section 8 program is unwieldy and costly — objections aired last spring prior to the City Council adopting an ordinance that will mostly block landlords from refusing to rent to prospective tenants with vouchers. When that ordinance takes effect, on May 1, 2018, Minneapolis will become the first government in the state to make it illegal to discriminate based on public assistance.

“We are looking at fundamentally changing the program to provide deeper and more accurate public service,” Housing Authority Executive Director Greg Russ told the committee members Tuesday. He said the agency is also looking at ways to “multiply the effects of the voucher” by linking them to education, work and training opportunities for tenants.

MPHA moves to streamline program

MPHA owns and operates 6,250 units of housing in the city but also administers the federal Section 8 voucher program, sometimes called Housing Choice Vouchers because they give residents the option of living in privately owned housing rather than in public buildings or complexes.

The authority currently has access to 5,143 vouchers but has a long waiting list of families hoping to get into the program. Of those 17,000 people benefiting from vouchers, 53 percent are children and 84 percent are people of color. Of the families in the program, 78 percent are headed by women, 46 percent have earned income and 41 percent have a person with a disability.

But many prospective tenants have expressed concerns about the difficulty of finding landlords who will accept the vouchers, especially in areas of the city outside of North Minneapolis and south of downtown. Many ads for rental housing in Minneapolis explicitly state that Section 8 vouchers will not be accepted.

That was the impetus for the ordinance pushed by Council Member Elizabeth Glidden. Though 1,200 property owners do take part in the program, many others do not. They won’t have an option come May, though there is pending litigation against the city arguing that landlords cannot be compelled to sign contracts with the federal Department of Housing and Urban Development, which oversees Section 8.

During hearings about the ordinance last year and in early 2017, landlords and building managers said it was the quality of the management by the housing authority — not the method of payment — that made them reluctant to participate. Many complained about delays in mandatory inspections that left apartments unrented for long periods of time.

At the same time that the city was considering requiring Section 8 vouchers be accepted in most instances, the housing authority was working on streamlining the program. Those changes, suggested by an outside study, are meant to make it more useful to tenants looking to live in so-called area areas of opportunity and to respond to landlord complaints.

In testimony before the council committee Tuesday, Kyle Hanson, managing director of Housing Choice Vouchers for the housing authority, described the changes. The authority has:

  • Extended the time allowed for tenants to find willing landlords from 90 days to 120 days, something that will help even after the Section 8 acceptance rules take effect because of the tightness of the rental housing market.

  • Hired a new “mobility coordinator” to help residents find units and make the transition to new neighborhoods and find access to other social services.

  • Created in partnership with the city a new Landlord Incentive Fund to take effect the same day as the Section 8 requirement. It will reimburse owners for damages outside of normal wear and tear and that exceed damage deposits.

  • Crafted a $250 bonus to landlords who rent to Section 8 tenants for the first time.

  • Conducted small-area rent studies with an eye toward better matching voucher reimbursements to what the market is charging. Currently a regionwide average rent is used, but some neighborhoods already exceed that average. Tiered reimbursement schedules could open those neighborhoods to Section 8 tenants.

  • Forged a partnership with The Home Depot to offer discounts and rebates to landlords who are participants in the Section 8 program.

  • Speeded up inspections to shorten the time a unit is vacant.

  • Provided immediate payments to landlords on the day a contract is approved and before the inspection is completed.

Glidden complimented the authority on its reforms. “It feels like there is so much happening to review processes, to really be client- and customer-focused,” she said. “And by that I mean both individuals who are utilizing the voucher program but also property owners.”

And committee chair Lisa Goodman spoke to leaders of the Minnesota Multi Housing Association who attended the hearing: “We are working very hard to address the concerns brought forward by your members and I know Mr. Russ is available to you to try to figure out how to make this work for your members.”

Landlords remain skeptical 

Cecil Smith, board chairman of the Minnesota Multi Housing Association, praised the changes being put in place by Russ, who came to the MPHA in February from the housing authority in Cambridge, Massachusetts. He said that had those reforms been put in place first — before the Glidden ordinance requiring Section 8 acceptance — enough landlords would have voluntarily taken part and the mandate wouldn’t have been necessary. With only around 5,000 vouchers in existence and with only a few hundred people in the market looking for their first Section 8 residence or moving from one to another, Smith said he now thinks there will be enough interest among landlords to meet the demand.

“These are exactly the kinds of reforms we were calling for back in March,” Smith said. Still he praised Russ for the work he has done in his first year. “When you see very little change and reform in government, when you see any unit of government trying to make significant changes, that’s rather remarkable,” Smith said.

Smith was especially complimentary of changes in how the agency deals with both landlords and tenants.

“When people are trying to run a business and you can get a response in a timely manner and a clear explanation of what is happening and when it’s going to happen, that helps you run your business efficiently,” Smith said.

But many building owners and managers remain skeptical of the Glidden ordinance, worrying that they will be required by city ordinance to take part in a program when neither the state or federal laws have such a requirement.

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Comments (11)

If you decided to turn your garage into

a loft rental, here is what you do. First, pay for a permit, then you would spend money on fixing it up, next you get insurance for it, finally you pay for advertising to let renters know you’re open for business. Now you put it on the market and have 5 potential renters, should you decide who stays in your loft or should a bureaucrat tell you who should stay there? Why if you own the space to be rented should someone else tell you who stays there?
You have HUD, MPHA and 5 other assisted housing agencies spending millions on low income rentals along with hundreds of regulations that has not solved this issue yet. I am sure another slew of regulations, maybe hiring another couple hundred people, more money spent and more codes that strangle the free market will help this time around.
Another Government boondoggle being sold as a solution and unfortunately folks will buy it.

Ordinance does not likely apply to this situation

With regard to the garage-loft scenario here, note that the non-discrimination ordinance contains an exception for "Renting or leasing a dwelling with two dwelling units when a person who owns or has an ownership interest in the dwelling is residing in the other dwelling unit." The ordinance also exempts the leasing of individual rooms in an owner-occupied dwelling, and temporary leasing or sub-letting.

For others, the ordinance does not require a landlord to rent to a family with a voucher. It only prohibits the blanket refusal to evaluate these prospective tenants fairly alongside others (by, for example, advertising "No Section 8" or refusing to process an application). Landlords may screen and make rental decisions as they otherwise would.

Facts, shmacts

So you are saying we should evaluate this based on the actual language of the ordinance? Crazy.

federal subsidies

I disagree. All private landlords should be able to issue a blanket statement that says they do not wish to accept federal subsidies for their properties. This is just the government trying to control people in regards to their personal property.

With the sudden

With the raises in rents yearly over the last 5 years Rental properties have put a burden on many low income people. Those people will be looking for somewhere to live so they can afford the basics again. If renters are looking for an affordable place to move to, why not give them the chance to get a voucher to continue to live where they are currently at from their current Rental property?

However, the buzz is that neighborhoods are hoping to gentrify by moving low income people out. If that is the case, where do low income people move too? We already have too many people living in the streets. Doesn't look good for the city.

"Those incentives include a

"Those incentives include a $250 bonus when a landlord joins the program and leases to an initial tenant; a deal with Home Depot to get discounts and rebates for purchases; and a new fund to reimburse landlords for damages and lost rent that exceeds damage deposits."

Hoo boy, sounds like quite a haul...wonder who's going to pay for all that government free stuff? (Kidding, of course...we know who's paying)

But I'm confused. I own rental properties (not in Minneapolis), and I don't accept Section 8 applications for a lot of reasons, but really it's a non-issue because the leases in my properties is quite a bit more than a Section 8 voucher would cover.

Is the rental stock in Minneapolis so run down that Section 8 would cover the rent if only the property owners would accept them? Or does the city expect owners to lower the rental cost for voucher applicants?

Honestly, I don't see how this works.

Not Required to Lower the Rent

Hi Curtis-- This ordinance does not dictate the rent amount that owners charge; owners are not required to increase or decrease rents. Owners can use the same screening criteria (assuming it is legal) for all households and do not need to give preferential treatment to households with a rental voucher. However, they also cannot give preferential treatment to self-pay households. Also, the housing authority that issues the voucher usually has a maximum rent that can be covered with the voucher. If the rent on your units exceeds this maximum, a household with a voucher would not be approved by the housing authority to rent a unit that exceeded the maximum.

Thanks Sara. From my

Thanks Sara.

From my experience, Section 8 vouchers won't cover the rent at most well maintained, pleasant properties. That's not a universal truth, but it is certainly very common.

So, I return to my other question. Is Minneapolis rental stock in such disrepair that this is really a problem, or is it simply another avenue for the far leftist city council to do more worthless virtue signaling?

No

The rents are too high. Rents go up every year. Rents go up! But Rents don't go down. Rental properties buy apartment complexes, renovate a little and charge higher rents. Or they raise the rent because other properties are raising theirs. Higher rents means low income people have to cut back on clothing, food, etc. You might not care, but renters do.

No one is going to raise

No one is going to raise rents beyond the market price; empty apartments don't pay the mortage. Judging from the ever increasing tax burden placed on Twin Cities residents, it is no surprise rents are increasing. They increase every time the tax levy is increased.

Someone has to pay for all that free stuff.

And they also go up when the property is improved to provide more service and comfort for tennents. That is what I'm wondering about.

If rent is low enough for Section 8 tennents to afford, and all that's standing in the way of them moving in, it suggests the buildings are in poor shape.

see

See that's the thing. "Beyond the market price". What market? And as rents increase, fixed incomes don't for many people (including Vets). Then in some areas some apartment complexes see a high turnover rate trying to increase the rents to the level of newer complexes a few blocks away who've priced theirs hundreds of dollars more than the areas around them. For the older buildings raising their rents, the 'improvements" aren't actually worth an increase when an apartment comes back on the 'market'. Other than...it's simply done as quickly as possible to get it rented.

So, what was the increase in your taxes of late. Say in the last 5 years?