More than $400 million for rental assistance is heading to Minnesota from the COVID relief act passed by Congress in December. Additional money — at least $152 million — is promised by the American Rescue Plan passed in March. Soon, under a pending state program, residents behind in rent who meet certain income thresholds could have that back rent paid by the government.
But getting the program running soon is not only the goal of the state agency overseeing the new program, Minnesota Housing Finance, it’s key to a fledgling agreement to phase out the current eviction moratorium. Dubbed an “off-ramp” and aimed at avoiding a crush of court proceedings, the bill, SF 1470, passed the state Senate with bipartisan support earlier this week.
“We are blessed with a large sum of money to help tenants who are in trouble,” said Senate Housing Finance and Policy Chair Rich Draheim, R-Madison Lake. “How do we encourage them to apply for a program that helps them out as a tenant and helps the landlord be able to pay property taxes and their mortgage?”
The ranking DFLer on the committee echoed hope that the federal money will be the way to ease the state off the eviction ban. “None of us want to see people evicted,” said Sen. Kari Dziedzic, DFL-Minneapolis. “We don’t usually have this much federal money coming, so we want people to take advantage.”
An ‘off-ramp’ compromise
In addition to a phased end to the eviction ban, the compromise language in the bill would end Gov. Tim Walz’s emergency order on evictions and foreclosures, which was itself a modification of one of the first emergency orders he issued at the dawn of the pandemic. It would also require that any future eviction moratoriums last only 30 days unless approved by both the House and Senate. Current law requires both houses to vote against executive orders, something that has so far allowed the DFL House to block any rescisions.
Walz’s eviction ban stays in place as long as a peacetime state of emergency exists. He has extended the state of emergency every month since March 2020, and Wednesday he extended it again. That would keep the eviction ban in place at least until mid-May 14.
Giving up any of his emergency authority is something Walz has resisted, though he has said talks with lawmakers that maintain protections under the pandemic are “valid discussions.”
Thursday, Lt. Gov. Peggy Flanagan said while the administration is open to discussions, it isn’t willing to accept restrictions on how Walz or future governors can react to an emergency.
“This moratorium has been a critical tool to protect Minnesotans, and we will only support legislation that maintains the state’s ability to respond to COVID and keep people housed,” Flanagan said in a statement released by her office. “It’s critical to build a fair transition out of this moratorium – we cannot support any legislation that limits the ability of the state to respond to COVID-19 and keep people housed.”
While the Senate approval margin was large enough to override a veto, several of the DFL votes in favor were skeptical of changing emergency authority over evictions.
The bill also would create a sequence of dates under which a new batch of eviction actions could be filed with state courts:
- 30 days after the bill is signed, landlords could begin evictions for tenants who are in violation of their lease for non-economic reasons. While Walz has said his ban does not cover tenants who engage in criminal activity in a property, damage that property or endanger other residents, many landlords — and courts — have been unclear about what is and isn’t covered.
- 60 days after the bill is signed, landlords could seek to evict tenants who are behind in their rent but who earn too much to be covered by rental assistance programs.
- 90 days after the bill is signed, landlords could start eviction proceedings against tenants with unpaid rent who are covered by rental assistance but who have not sought aid from the assistance program. Any tenant who has applied and is awaiting help could not be evicted until at least June of 2022. That delay is meant to provide time for back rent to be paid through the assistance program.
The bill’s language was negotiated by Draheim, R-Madison Lake; committee Vice Chair Zach Duckworth, R-Lakeville; and by two DFL committee members: Dziedzic, the ranking minority member, and Lindsey Port of Burnsville.
Port first tried to amend the agreement Monday by getting rid of the section that removes the governor’s emergency powers over eviction bans. It would have triggered the 30-, 60- and 90-day phase-out when Walz ends the moratorium rather than when the bill is signed. It would have also required notice to tenants seven days before eviction proceedings begin.
That amendment failed. Port and Dziedzic then endorsed the compromise, saying it had enough of what both landlords and tenants want to be workable. Dziedzic, however, did hold out hope that the bill could be improved further in any conference committee with the House.
“If we don’t have an off-ramp, when the emergency powers end the eviction ban ends and then what do people do,” she said. “They can be evicted. The courts are going to be overwhelmed. We need a smooth process.”
Tenant advocates oppose bill
The bill passed the Senate with 10 DFL votes, 46-21. Among the no votes was Sen. Jennifer McEwen, DFL-Duluth. During the Monday debate, McEwen noted that it was just 24 hours since the shooting of Daunte Wright by a Brooklyn Center police officer.
“Now here we are in the Senate of the state of Minnesota and we’re talking about how to end the moratorium on evictions,” she said. “It’s unconscionable.”
Tenant advocates also oppose the bill in its current form. Michael Dahl, the public policy director for HOME Line, a nonprofit that offers legal help for renters, said the current bill provides a transition that is too short, creates confusion about the eviction process in the courts and lacks a notice requirement for tenants.
“Notice and a reasonable time period prior to eviction filing is simply essential after what could be 12-plus months of disagreement between parties about what is due,” Dahl said.
Both the affordable housing advocacy coalition Homes for All and Home Line support a House DFL version of the bill, HF 12, sponsored by House Housing Finance and Policy Chair Alice Hausman, DFL-St Paul, and others.
Jennifer Ho, the commissioner of the Minnesota Housing Finance Agency, told the Senate Finance Committee Wednesday that the Walz administration appreciates the effort at compromise but suggested there remains work to be done.
“I am hopeful that between the House and the Senate and my agency and the governor’s office we will get resolution so that Minnesotans, landlords and renters and the courts alike all feel like they have a predictable pathway that fully leverages all of this federal rental assistance money,” Ho said.
Unpaid rent was the number one reason for evictions before the pandemic, she said, and “it’s in everyone’s best interest to get the debt settled.”
Ramping up the state’s new rental assistance program
Unlike rental assistance that was paid during 2020 — including a $100 million program paid for by money from the CARES Act — the state’s new rental assistance program, RentHelpMN, is a coordinated response by the Minnesota Housing Finance Agency and the state’s larger cities and counties, which have received separate allocations of money from Congress [PDF].
The intent is to have a single application point for tenants and landlords regardless of which government eventually provides assistance. “We heard with the last program that it was hard to apply when you’re a family in crisis,” said Ryan Baumtrog, assistant commissioner of the housing finance agency. “Last year it was: ‘The state has a program, so does Hennepin County, so does Ramsey County.’”
There was also criticism from landlords that checks were slow to arrive and that information was scarce. That program used 28 local agencies and nonprofits to process applications for the state. This year, those agencies — the housing finance agency calls them “field partners” — will instead help reach out to potential beneficiaries and help them navigate the process. Information about the program can be found at the RentHelpMN website or by calling 211.
Ho said her agency is encouraging potential beneficiaries to prepare by going to that website, which offers information on eligibility and a checklist of documents needed to apply. Tenants must earn 80 percent of the median household income, a number that varies by parts of the state: a one-person household would qualify with an income below $40,700 if they live in Aitkin County, for example, but $54,950 if they live in the Metro Twin Cities.
A rule of thumb, however, is that people who qualify for benefits like food stamps, Minnesota Family Investment Program, general assistance or subsidized housing will likely qualify for rental assistance as well.
A different program funded by the March American Rescue Plan will be available to homeowners behind in mortgage payments.
Ho said she hopes RentHelpMN will be active within a week or two. “We are now doing a daily go, no-go in terms of whether we believe we have the software and the access points in the system in good enough shape to turn it on,” Ho said. “But we are close enough that we are working backward hour-by-hour from launch date.”
She also said the funds available are significant. “This is a very large federal investment … so one of the important messages I would send to you and ask you to send to your constituents is this isn’t a lottery. This is a program with a lot of money, we’re going to be able to help a lot of people.”