State and city lawmakers claim they are taking steps to pass laws providing “tenant protections.” Gov. Tim Walz has extended, once again, his peacetime emergency order. No further steps have been taken to allow landlords to terminate leases or evict tenants who are violating their leases with noise, disturbances, smoking in no-smoking properties, or sanitation, pest or odor conditions that are so bad neighboring residents want to be let out of their leases.
The cities of Minneapolis and St. Paul have passed screening ordinances, labeled “renter protections.” These laws may help elected officials get votes. But they are not protecting most tenants. Instead, they will add to the costs of renting for tenants who pay their rent on time and comply with their lease agreements.
Under the cities’ tenant protection screening ordinances, landlords are prohibited from taking steps to minimize “bad risks.” Landlords are prohibited from considering credit scores and from turning down applicants with multiple criminal offenses.
An applicant can have two, three or four felonies on his or her record, and can have just been released from prison. But if an offense took place more than seven years ago, the landlord cannot deny the rental applicant unless the landlord is prepared to conduct an individualized assessment.
The individualized assessment process the ordinance requires translates into “Sue me for a fair housing violation.” Minnesota Housing, the state agency that finances affordable housing, is also poised to mandate that all landlords receiving state funding offer all applicants an opportunity to submit supplemental evidence to explain, justify or negate potentially negative information.
The process for screening applications at affordable communities will become more time-consuming and costly, and present risks in explaining or defending the judgment calls that go into an evaluation of supplemental evidence.
St. Paul’s new law is the worst. Landlords are prohibited from giving proper notice at the end of the lease term to terminate unless the landlord gives the tenant a notice of just cause and a chance to remedy the situation.
All of the neighboring tenants may complain about noise, traffic and suspected gang or criminal activity. But if they do not want to get involved, they cannot be protected. The landlord will have to name names. It will no longer be possible to simply end a problem tenant’s lease by giving notice to move at the end of the lease term.
Even chronic late payment of rent is not enough in St. Paul. City leaders believe late rent is not good cause unless there are more than five late payments in a year. I doubt the landlord’s mortgage lender is that lenient.
All of these supposed pro-tenant proposals will raise the rent for other renters.
By the time a landlord pays the mortgage, taxes, utilities and maintenance, margins can be thin. Those margins disappear, and go steeply into the red when tenants do not pay or vacate and leave a damaged apartment behind.
The notion that all residential landlords are “fat cats” who can absorb rent losses as the months drag on, while some opportunistic tenants are enjoying an eight-month-and-counting rent holiday, will force landlords to pass the costs of paying essential bills onto other residents. Even when the COVID-19 crisis ends, the cities of Minneapolis and St. Paul have taken steps to make the rental housing business in the metro area a high-risk financial proposition. Tenant protection mandates do nothing to add to the stock of affordable housing, but are giving many owners a reason to leave the cities or put any investment capital in other areas.
If you are reading this and you are a good tenant, do not think for a moment that your politicians are paying for these protections with their money or taxpayer money. The dollars they are spending are yours.
Donna E. Hanbery is a Minneapolis attorney.