Despite thoughtful and vocal opposition, the Minneapolis City Council failed to listen to residents, property owners and managers, who argued a new ordiance would add more regulation to Minneapolis rental housing likely adding to higher rents in a stable rental market.
The Minnesota Multi-Housing Association believes the ordinance, which mandates more inspections for apartments and longer wait times, could actually lead to fewer rental units that qualify for Section 8 subsidies and increased rents across the board because property managers believe the Minneapolis Public Housing current beauracracy makes the proposal unworkable.
Without warning, election year politics led to councilmembers Elizabeth Glidden, Abdi Warsame and Lisa Goodman expediting an ordinance first introduced two years earlier that would require all landlords in Minneapolis to accept government vouchers like those provided by the federal Section 8 program.
MHA launched a campaign opposing the ordinance as Minnesotans for Sensible Housing Policy which included online and social media ads, newspaper ads, and a website calling on the likely increase in rents once the ordinance is imposed.
Incoming Multi Housing Association President Cecil Smith told MinnPost forcing participation in voucher programs would increase rents throughout Minneapolis.
“First, because of the rules involved in complying with the voucher program — landlords have to leave apartments unrented while waiting for inspections required before tenants using vouchers can move in — adds costs that landlords will want to recover in rents.
The second reason is because of the rent standards used by housing agencies to decide how much they will pay in vouchers. Landlords with rents near the rent ceiling might simply raise rents so as to exceed the standard and simply avoid the regulations. “The program is so broken that there’s an incentive for owners to price their apartments above the fair-market standard,” he said.
Those factors could lead to what the association dubbed “coastal rents,” akin to those in cities like San Francisco and New York.”
The Multi-Housing Association took out a full-page ad in the Star Tribune ahead of a planned public meeting. It said, in part:
“We know from the most highly regulated apartment markets in the country – New York and San Francisco – that more mandates mean higher rents and longer wait times to find an apartment.
In Minneapolis, the Minneapolis Public Housing Authority needs reform. A recent report outlined significant and numerous changes that MPHA needs to undertake – however the City Council wants to add additional burdens and bureaucracy to an agency that is already challenged and overwhelmed.
Meanwhile, Met Council and other local affordable housing agencies administer the same federal vouchers as the City of Minneapolis with less bureaucracy and without the mandates Minneapolis is proposing.
One recent study indicates that 84 percent of Minneapolis apartments are within $50 per month of being priced outside of participating in the program. More bureaucracy and mandates = coastal rents.”
At a public hearing March 22nd reported on by Minnesota Public Radio, Councilmember Glidden said, “If I go on Craigslist right now, I can promise you I will find multiple listings that say ‘No Section 8.’ That’s what we hope will change.” An assertion supported by testimony from tenants like Tracey Clark, a full-time college student and part-time mental health specialist who said, “I’ve been hung up on when I ask if people will take Section 8.”
MPR reported the council also heard from property owners.
The Hornig Companies owns and manages around 2,000 apartments in Minneapolis, and has some Section 8 tenants. Bernadette Hornig fears Glidden’s proposal will mean higher business expenses.
“I just don’t think this is the solution to the problem that they’re trying to address,” Hornig said. “I think it shows a pattern of mandates by the city of Minneapolis that make it really hard as a small business owner to conduct our business on a daily basis.”
Property manager Jennifer Spadine agrees. Her company, Guardian Properties, manages about 100 Minneapolis rentals and also accepts Section 8. But Spadine says taking on additional voucher holders will mean more bureaucracy.
“There’s inspections, there’s delays in the inspections, and delays in the service between us and the program, which causes loss of rent, and causes vacancy.”
Two days later, in a unanimous vote, the city council passed the ordinance. It will take effect in May of 2018. Multi-Housing Association President Cecil Smith told KSTP-TV, “the priority should have been reform of the housing choice voucher program.” The ordinance, he said, “could lower the opportunity for affordable housing in the city (and) exhilarate the gentrification of Minneapolis.”