Edina, Maplewood toughen licensing rules for landlords

Edina and Maplewood are launching new residential rental licensing and inspection programs designed to keep their growing number of renters safe and secure, making them the latest suburbs to toughen rental regulations at significant cost to landlords.

The licensing programs are proactive, replacing old systems where city staffers investigated rental conditions only when they received a complaint or a police call.

City officials consider the oversight necessary to handle a dramatic decadelong increase in single-family rentals and new suburban apartment complexes.

The stricter suburban standards come as cities like Minneapolis, which has long licensed rentals, pivot their focus to renter protections such as capping security deposits, stopping use of credit scores and limiting landlords' ability to reject applicants based on criminal history or prior evictions.

"We are looking at this from a public and environmental health standpoint," said Jeff Brown, Edina's community health administrator, who will oversee rental licensing for 6,500 apartment units and an estimated 1,260 single-family and condo rentals.

"It's not about limiting rental properties in the city. People's housing is the foundation for their life. If you are unsettled or not safe in your home, it affects your whole well-being."

"The timing was right," said Maplewood Community Development Director Jeff Thomson, whose department will supervise licensing of 4,300 apartments and an estimated 500 single-family rentals. "We are seeing more rental units constructed and we are seeing additional single-family homes being rented. … We want to ensure rental properties are invested in and we are providing safe and secure housing."

The fees paid by landlords will cover the cost of the program, he said.

During a recent tour of Maplewood rental properties, Mayor Marylee Abrams said she saw properties that were unsafe for kids and lacked running water and functioning appliances. Abrams noted that the city's immigrant population is growing.

"I want to make sure some of the most vulnerable people in our community are not afraid to report a landlord," she said at a recent City Council meeting.

But some landlords say this new layer of regulation only adds bureaucracy and expense that will be passed on to tenants in an already expensive rental market.

Edina's new rental licensing program, which goes into effect Monday, will charge an annual base fee of $180 plus $17 for each unit. Maplewood will charge an annual base fee of $150 plus $50 for each unit, which means that some of the city's biggest landlords will pay more than $7,000 per year.

"Maplewood should stick to the bread-and-butter issues in this community" such as law enforcement, roads and bridges, longtime landlord John Wegleitner said at a recent City Council meeting. "Maplewood should stay it in its lane … instead of trying to get into the rental business."

One tenant rights group applauds increasing oversight over suburban landlords, but it is critical of new provisions such as the required criminal background checks in Maplewood and a "Conduct on Rental Property" section in Edina's code it believes could make tenants fearful that calling 911 might cost them their apartments.

"As a general response, we think that tenants benefit from having a local expert from the city go out and inspect units to make sure they're healthy and safe," said Eric Hauge, executive director of tenant advocacy nonprofit Home Line. He added that he wished suburbs were more cautious about language in their statutes than could actually hurt tenants.

Edina's ordinance includes a list of offenses that are considered "disorderly" — including terroristic threats, interfering with a 911 call and delinquency of a minor — that when compounded could result in the revocation of a landlord's rental license. Hauge said such measures prompt landlords to pressure their tenants not to call 911 even if they need urgent help.

Edina officials said the conduct list is a tool they will use only in extreme circumstances. But Hauge said it was "really surprising cities are still enacting these questionable policies given the impacts they have, while cities like Minneapolis are recognizing and responding to such threats."

In September, the Minneapolis City Council passed an ordinance forbidding landlords from denying an applicant on the basis of a misdemeanor conviction older than three years or a felony conviction older than seven years. Landlords can still deny applicants who are registered lifetime sex offenders or convicted of distributing or manufacturing controlled substances.

Hauge said some suburbs are going a step further, studying and passing rules about eviction and threats of displacement brought on by gentrification. Several Hennepin County suburbs have passed tenant displacement protections, he said.

Maplewood's program, which starts in January, will require landlords to run criminal background checks on all prospective tenants, use written leases, attend crime-prevention training and allow city inspectors into units for regular inspection.

Maplewood, like dozens of other Twin Cities suburbs, will require an addendum for crime-free housing attached to all leases, barring residents from engaging in a variety of illegal behaviors, including the use and sale of illegal drugs.

At a September meeting, Abrams and city staffers stressed that Maplewood isn't telling landlords what to do with background checks, only that they conduct them.

"We are not suggesting any decisionmaking based on the criminal background check," Abrams said.

Maplewood Police Chief Scott Nadeau, who has worked in other suburbs, said rental licensing in Brooklyn Center and Columbia Heights has helped hold the small number of problem landlords accountable for code violations, such as no heat in the winter and pest problems, as well as "violence and disorder" at their properties.

"This has been a useful tool to make sure the tenants in our city have a good, safe, clean environment to live in," Nadeau said.

Maplewood City Council Member Bryan Smith, who was a renter when he first joined the council, said he empathizes with good landlords but said the city can no longer ignore the issue.

"We do have a problem in the city with some very troubling problems from both a renter's perspective and a neighbor perspective," Smith said.

Pat Flaherty has owned and operated the Birch Glen Apartments in Maplewood since 2002. The 60-unit building is mostly filled with empty nesters and retirees. He said he already does everything in the city's new rental licensing ordinance and that his building must pass inspections conducted by the U.S. Department of Housing and Urban Development.

Flaherty estimated that Maplewood's new regulations will increase his annual expenses by $5,000 to $6,000, including licensing fees and staff time.

"One of my biggest jobs is controlling costs to keep my people happy," Flaherty said. "This is something that is not going to keep my people happy. It's going to be another fee that eventually just rolls down to them for things we are already doing. I think it's unfair for my tenants."

Staff writer Kim Hyatt contributed to this report. Shannon Prather • 651-925-5037