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Why the GOP and DFL haven’t been able to agree on rental assistance for low-income Minnesotans

The sticking points: the amount of help — and how and when to end the state’s eviction moratorium. 

apartments
If landlords can begin eviction proceedings against tenants who haven’t been able to pay rent in April, May or June — or all three months — there could be a wave of eviction actions.
MinnPost photo by Corey Anderson

Landlords, bankers and tenant advocates agree. So do Republicans and Democrats. So why is it so hard for the Minnesota Legislature to adopt emergency legislation to help low-income renters and homeowners make monthly payments during the COVID-19 crisis?

Because while GOP and DFL lawmakers may agree on the need to keep residents from falling into debt during the moratorium on evictions order by Gov. Tim Walz, they can’t agree on the amount of state help — or on how and when to end the eviction moratorium currently tied to Walz’s coronavirus state-of-emergency declaration. 

On Wednesday morning, a subcommittee of the DFL-controlled House moved its version of a rental assistance bill, House File 4541, which would give $100 million to the Minnesota Housing Finance Authority to boost support for the Family Homeless Prevention and Assistance Program. 

Under the proposal, which has Walz’s support, households earning 300 percent of federal poverty levels or less could get rent and utilities paid directly to their landlord and utility. Help for mortgage holders is also available, and the bill’s provisions would last as long as the governor’s coronavirus state-of-emergency declaration is in place.

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But while Senate Republicans agree in principle with many of the ideas in the House bill, the two parties are also moving in a different direction on the details. 

A committee of the GOP-controlled Senate on Thursday discussed their own bill, Senate File 4495, which appropriates $30 million for the rental assistance program — but also includes a provision preventing any extensions of the eviction moratorium past June 24. 

Both bills also would put into law something Walz only requested in his executive order: a moratorium on foreclosures for nonpayment of mortgages.

State Sen. Torrey Westrom
State Sen. Torrey Westrom
“We think it’s a very good compromise and good bill to get out the door so we can get aid to those and relief to those who might be in need as well as have the Legislature involved in these decisions of changing statutes,” Sen. Torrey Westrom, the Elbow Lake Republican who chairs the Senate Agriculture, Rural Development and Housing Committee, said Thursday.

Bracing for May 

The question of what happens when the moratorium on evictions ends is the reason for both bills, sponsors say. If landlords can begin eviction proceedings against tenants who haven’t been able to pay rent in April, May or June — or all three months — there could be a wave of eviction actions. Meanwhile, property owners who have not received rent payments by significant numbers of tenants could fall behind on their own loans. 

That is how groups such as the Minnesota Multi Housing Association and the Minnesota Housing Partnership — among other groups representing landlords and tenants — first came together to try to resolve the issue. 

“It’s in everybody’s interest, I think, not to add to our homelessness issue at this point and to keep renters and landlords and everybody stable during this time,” said Rep. Alice Hausman, DFL-St Paul, as she convened her Housing Finance and Policy subcommittee Wednesday.

Jennifer Ho, the commissioner of the state Housing Finance Authority, said Walz supports appropriating $100 million because he thinks there is a need for that much assistance, if not more. Yet his ban on evictions isn’t a ban on payments; renters who don’t pay will still owe rent.

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“The governor has stressed that Minnesotans should pay their rent and pay their mortgage if they can and work closely with their landlord or their financial institution if they can’t,” Ho said. 

Half a million Minnesotans have filed for unemployment insurance, she noted, and rent is due next Friday. “We are all bracing for May,” she said, and the state needs a “right now plan” to help with those payments. It helps stabilize families during this difficult time while also providing the resources landlords need to pay their bills,” Ho said.

State Sen. Bill Weber
State Sen. Bill Weber
But she disagreed with imposing an end date for payments, as the Senate bill does.

“I’m concerned that an end date that is too soon would put housing stability at risk for thousands of households while the pandemic is still occurring,” she said. “Stakeholders agree we need an end date and flexibility moving forward.”

But Sen. Bill Weber, R-Luverne, who’s a cosponsor of the bill, said landlords need more visibility into how long the policy will last. “We need to know how long you’re going to hold down the property rights of the owners,” he said, noting that he spoke to a constituent who owns a 9-unit building where all tenants are still working but none paid April rent. “They won’t qualify for state assistance, but it is going to be an additional problem for our property owners. What is a date certain that we can live with?” 

Responded Ho: “The virus sets the timeline, and that’s the thing that’s most frustrating to all of us,” reiterating that the state has been telling tenants they should pay if they can and that back rent will be due.

Attorney General Keith Ellison told the committee his office has fielded 255 complaints about landlords not complying with the eviction moratorium.

“In most cases, complaints are easily resolved with just a phone call or a letter,” he said. “Most landlords have been cooperative and done the right thing. Most of our laws are not for those people; they’re for the people who don’t do the right thing.” 

So far, his office has brought three actions against landlords in Pine County, Meeker County and Aitkin County.

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Many of the landlords who are missing out on rent payments are nonprofits that build and provide housing to low-income renters, said Paul Williams, the president and CEO of Project for Pride in Living. He said PPL saw about 15 percent reduction in rent payments in April. Those most challenged by the COVID-related economic disruption are people who are working, not those on public assistance.

“We absolutely expect May, June and the upcoming months to be even worse,” Williams said. He estimates losses to the nonprofit will be between $3 million to $5 million by the end of 2020. The organization has an annual budget of roughly $24 million.

Cecil Smith, the president and CEO of Minnesota Multi Housing, a trade group of apartment owners and managers, was an early backer of the rental assistance plan. He warned that there will be a surge of evictions once the moratorium ends if there is not some way to keep tenants from falling behind. But he said the association does want to see a specific end to the provisions in the eviction ban, what he termed an “off-ramp” to the moratorium.

“This is why we are asking for rent-payment support and policy certainty, such as timelines and processes,” Smith said. “We have to figure out how to off-ramp the eviction moratorium, so that evictions can be done in an orderly way and not overwhelm the courts.”