Minneapolis passed a “renter protection” ordinance last week that’ll hamstring landlords trying to do even the most basic due diligence about potential tenants:
The renter’s protection ordinance prevents landlords from using old criminal or housing records to deny applicants. Specifically, an applicant cannot be denied if they have a misdemeanor conviction older than three years, a felony record dating back seven years, and more serious offenses that occurred 10-plus years ago. Landlords also lose the use of a credit score during the screening process and there is a new cap on security deposits at one month’s rent.
I can see giving people a break on criminal records after a long-enough time keeping one’s nose clean.
On the other hand, I don’t think the City of Minneapolis is the one to plop an arbitrary figure on how long it takes a criminal to be a safe risk…
…for someone else’s investment.
Previously, property owners could look at someone’s criminal and credit history before renting to them, sometimes going back a decade. Renters said mistakes of the past should not affect their future, especially something from 10 or 20 years ago.
In the 1960s, New York City instituted “Renter Protections” – rent control, making evictions for cause nearly impossible, onerous regulations on landlords – that caused the stock of “affordable housing” to become unsustainable; as landlords abandoned or sold out cheaper properties, housing either became unlivably awful and abandone, or sustainable but only affordable by the wealthy.
San Francisco followed suit; there is little between great wealth and grinding poverty.
Sounds like a fine plan, Minneapolis. You’re in good hands.
My interpretation of the Minneapolis governmental mind set about affordable housing is that “homelessness” is a circumstance that could literally happen to anyone, at any time. Therefore, it makes sense for government to subsidize construction of affordable units as well as the rents owed by the residents. It ignores the sad fact that most of the homelessness in the city results from mental illness, drug addiction, or both, and is not going to go away ever. So, the more affordable housing we build, the more homelessness will be institutionalized and made permanent. Builders will not construct apartments affordable to middle class folks because the myriad of restrictions will simply not allow landlords to make profits. Of course, liberals think profit is a nasty word, so there you have it.
Not only those factors. Eviction records are disappearing, too. Defendants in eviction actions routinely claim discrimination. The landlord settles the discrimination claim by agreeing the court can expunge all record of the eviction, and the tenant gets a little extra time to move out. Win-win, right? Not if you’re the next landlord looking at a prospective tenant’s application.
If landlords can’t use traditional risk indicators to screen out bad risk tenants, they’ll find some other proxy to determine risk. They have to, because the consequence of letting bad tenants destroy your property or injure your other tenants is bankruptcy.
Google the phrase: “ban the box backfire” and look at all the studies from respectable Liberal institutions who were astonished to learn that denying employers the right to take into account criminal history not only didn’t help minorities get jobs, it actually hurt them. Wait about three years – you’ll see dozens of similar articles about this ordinance. Unexpectedly.
As someone that owns and manages rental properties, there is nothing that would make me sell faster than to restrict my ability to vet prospective tenants, in any way. There is no measure more reliable in ferreting out people in chaos than their credit rating. We don’t rent to people with credit ratings less than 650, and if the score is that low, it had better be due to a lack of credit history, not a bad history.
Leftists wont acknowledge that renting an apartment is a business partnership between the owner and the tenant. A tenant with bags of chaos drags that baggage right into the owners life; it’s not even just a matter of finance.
The only people that will be left are those skilled in renting tenements to moochers, and those that rent very expensive units.
Eviction records are disappearing, too.
Which makes credit scoring all the more important. When someone is evicted for non-payment, a smart owner makes the credit rating companies aware of that.
That may not help people who specialize in renting to wards of the state in that they are usually evicted for causing chaos, but for those like me that deal in mid to high rent markets it’s invaluable.
As landlords, my wife and I do background checks. It is not a be-all, end-all as to whether or not we accept someone, but it helps. For one thing, they tell us if someone is a liar or not. If you have a question mark in your history, best to tell us upfront, and we’ll consider the circumstances. Lie about it, and you fall out of consideration immediately. Do you have a violent history, though? Why should we endanger our property or the lives and well-being of other tenants? (How long until a tenant sues a landlord for allowing a rapist or child-abuser inside the security building?).
If the City Council (and we long ago ruled out owning properties in Minneapolis or St. Paul) won’t let us screen backgrounds, then what do we do to mitigate the risks (i.e., costs) of that kind of exposure? Hmmm. I know! We (and every other) landlord will jack the rents! That will certainly help the affordability issue.
I plan on owning rental property in the future, never will I own something in Minneapolis now.
The immediate victims of this will be the renters who will be forced to share living space with criminals.
This was Julian Castro’s big Idea when he was HUD secretary under Obama.
The chance that Castro and the people that he cares about will ever be housed in a rental unit between a child abuser and a drug dealer?
0%.
Socialism is built out of Big Lies. One of them is that the law protects the rich by making poverty a crime.
The greatest victims of poor criminals are other poor people, not the rich.
It occurs to me this is another instance of the Left mistaking effect for cause.
Landlords won’t rent to people with evictions. So delete eviction records and the problem is solved, right? No, because the behavior that caused to the eviction hasn’t been solved, the effect of that behavior is simply masked.
Similarly, banning employers from checking criminal history doesn’t mean the behavior that caused the conviction has been solved. Banning schools from expelling students doesn’t mean the behavior caused expulsions has been solved.
Banning certain firearms falls into the same category.
You almost want to put a rider on the bill that would require everyone who voted for it to take in a renter with bad credit or crimes on their background check and see how it works out for them. I also agree with NW; at some point, a renter is going to be killed or raped by another renter who got access to the property because of this law. There should also be a rider in the law that when (not if) that happens, the city council and city are liable.
(kinda like reprobate cities and politicians that don’t work with ICE to expel illegal immigrant felons ought to be liable for what happens)
Most of the previous comments cover my thoughts. So I will take another track. Pro-New Mpls ordinance and landlord haters please listen. I’ve been a Minneapolis multi housing Northside affordable housing provider for over 45 years. Importantly, ever since the “Blame and handcuff the landlord era” began in 1989. You can argue back and forth with me with your opinions, versus my experience. One set of stats we can all usually accept. That is vacancy rates. Since the dawn of “hold landlords accountable” epoch began in Metro MN. Vacancy rates have hovered below the national average and what even U of M economists would say is below normal. 1 to 4% has been the norm for over 20 plus years now. It has been well documented in the Strib’s real estate section via the GVA Marquette reports and their successors. It is not in dispute. Always low vacancy rates, thus rent is always increasing faster then inflation. There is never a tenants market in the whole metro. Even through the Great Recession, vacancy rates were stubbornly low. Why is our metro area rents rivaling much larger cities that have no/little access to build-able land? Think NY, SF, Chi, Bost. ? Plain and simple. Our governments, in the name of helping the least qualified renters, have done everything within their power to make rentals more expensive and burdensome to own or manage. Those costs must and will be absorbed by the renters. No amount of government subsidy can ease that demand. You can talk affordable housing all day and election season. There isn’t enough money in Ft. Knox to solve the problem. And there will never be.
Now the personal part. I used to rail, lobby, organize against the never ending madness of our state, local government, non-profits, media’s hatred and distrust of landlords. I don’t anymore. I adjust and trim according to the storms and raise the rents my tenants pay. The one true bogeyman all landlords, and I mean ALL landlords fear……. is vacancies. It can cut into revenue to the point of losses and bankruptcy. It forces ALL landlords to LOWER rents. But we have not had a vacancy problem since the mid 1990’s. So to all of you activists, agencies, lawyers, City councilors, County commissioners, legislators, congress people, Met councilors, block club leaders, mayors, editors, u of m professors. THANK YOU.
Eric has shown us the difference between deductive and inductive reasoning.
Everybody likes inductive reasoning because it gives simple answers based on prejudice: “the rent is too damn high because landlords are greedy!”
People don’t like deductive reasoning because it give answers that do not please us (a lack of “bad guys”); ‘The rent is too damn high because the cost of investing in creating low cost rentals is too high.”
The WSJ says that the median cost of building an affordable housing unit in Los Angeles or the Bay area is $400k. That works out to monthly mortgage payment, after down payment, of about $2000/month. The culprit, according to the WSJ, is high prices for buildable lots due to land use regulation. Equivalent affordable housing in Texas cost about $130k,