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

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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.