A clash is nearing between renters who are behind on their rent payments or have other lease issues and landlords who have been prevented from sending eviction notices. While Gov. Tim Walz considers an extension on the eviction moratorium, in place for almost 15 months, Minneapolis City Council members are seeking ways to soften the blow when the moratorium ends.
Council members Jeremiah Ellison, Jamal Osman, Cam Gordon and Council President Lisa Bender created an ordinance, which the full City Council approved on Friday, May 28, that included provisions for the delay of eviction proceedings for non-payment of rent for tenants who have applied for federal, state or local assistance. Currently, property owners can file an eviction without prior notice, which prevents a tenant from resolving the issue, making an agreement, or quitting the lease.
A provision that would limit reasons for evictions to a defined list of causes was left out, pending a lawsuit over a similar ordinance in St. Paul.
It the spirit of the anticipated ordinance, Urban Homeworks, a local non-profit that assists renters and prospective homebuyers through rehabbing properties and new construction, held a virtual “Housing Justice Forum” on May 20. Executive director AsaleSol Young led a discussion about rent stabilization, eviction notices and regulations, and Tenant Opportunity to Purchase (TOPA) ordinances. Attendees included Ed Goetz, director, CURA Center for Urban and Regional Affairs; City Council Members Jeremiah Ellison and Lisa Bender; Minneapolis mayoral candidates Sheila Nezhad and Kate Knuth; Harrison Neighborhood Association Housing Organizer Qannani Omar, and organizer Chloe Jackson from the Central Area Neighborhood Development Organization.
Young said more than half of Minneapolis residents, or about 89,000 households, are renters, many of whom are people of color and low-income, and are spending more than 30% of their income on rent. Goetz noted that in the last ten years, rents have increased an average of 40%, while incomes increased by less than 4%. He said, “Renters don’t think about a percentage increase; they think about the additional 75 dollars they have to come up with. There’s a lot of anxiety there.”
Bender said the Council adopted the Minneapolis 2040 Plan but said it must include renter protections and more affordable housing; rent control is prohibited by law in Minnesota, unless authorized by a local referendum. Currently, 15% of landlords own 80% of the city’s rental units, leaving very little common ground with smaller landlords, those who own four or fewer units. She said Minnesota is one of the few states that allow evictions without notice, adding, “Our state has really terrible laws for renters.”
Regarding rent control (or rent stabilization), some advocacy groups are calling for a rent increase cap of 3% per year. To a question about whether landlords might make large rent increases in anticipation of limits, Ellison said, “Landlords are already charging what the market will bear, and they always threaten to leave. I’m not afraid of developers’ threats to forego building; it’s still profitable to build in Minneapolis.” Goetz noted, though, “There’s no way to overstate how much the real estate industry dislikes rent control.”
One strategy to reduce disruption in the lives of renters when buildings are bought and sold is the Tenants Opportunity to Purchase Act (in Minneapolis, it’s called “Opportunity to Purchase,” or OTP). This allows tenants to have the first right to buy the property when a landlord chooses to sell. A landlord would solicit an offer from a third party, and ask the tenant (or a cooperative) to match it. Other municipalities have tried versions of this strategy, with mixed success. Funding is often problematic, and public housing isn’t part of the equation at all. Still, it can be considered a viable alternative for rental stability.
The governor’s executive order currently prohibits property owners from filing eviction actions, terminating residential leases, or issuing notices of non-renewal for the duration of the COVID-19 “peacetime emergency.” The moratorium doesn’t relieve a tenant’s obligation to pay rent and evictions can still take place under certain circumstances, such as endangering the safety of other residents or causing significant damage to property. The property owner can move family members into vacated properties. The moratorium languages requests banks and loan companies to put their own moratorium on foreclosing on rental properties due to the property’s substantial decrease in income caused by the pandemic, and to resist imposing late fees or other penalties.
While the moratorium protects people who aren’t current with their rent payments, there are around 53,000 Minnesota households owing nearly $156 million in back rent. The average debt is $2,900. The state senate bill passed at the end of the regular session lays out an order-of-eviction timeline. Violators of non-financial lease terms would be the first to receive notices, followed by renters who had the means to pay but didn’t. Renters with low incomes who have applied for state aid would be blocked from evictions for another year.