Minneapolis landlord's homes are too run down, so court referee says tenants must get out

Tenants of 28 north Minneapolis rental homes say their lives are in upheaval after a court said the buildings are too dilapidated to repair, forcing them out by the end of August.

Owner Mahmood Khan's buildings were in such disrepair, a court-appointed administrator found, that it would cost $2.1 million to make them habitable for the next five years, and $2.9 million for the next 15 years. Rent payments wouldn't cover the upgrades, making the structures economically not viable as rentals, the court concluded.

That has created chaos in the lives of tenants such as Kevin Woods, who lives with his wife and four children in a Khan property in the 4000 block of Dupont Avenue N.

"Our family is in shambles — we don't know what we're going to do," he said.

Legal advocates say the court order is remarkable.

"It is very unusual and even unprecedented to see the loss of so many affordable rental properties at the same time in a market that is already stressed," says Drew Schaffer, executive director of Mid-Minnesota Legal Aid. "It's really unfortunate that these properties have deteriorated to the point they have become unhealthy and unsafe."

After numerous rental violations, the city's regulatory division moved to revoke all of Khan's rental licenses in 2015. He lost his court appeals, and in December, Hennepin County Housing Court Referee Mark Labine appointed Lighthouse Management to take over management of the properties.

Labine ordered that Lighthouse and a nonprofit, Urban Homeworks, work with city representatives to find tenants other housing by the end of August. But tenants say they have heard little so far, and several said they hope Mayor Jacob Frey will help.

Frey said he has convened meetings of city staff to aid the tenants.

"The city and my office will be doing absolutely everything within our power to provide housing stability for the individuals that have been mistreated by Khan," the mayor said. "And we're going to do everything we can to make sure something like this never happens again."

Khan, who is appealing the court's decision to temporarily take his properties, claims they are not beyond repair.

"They are in good condition, but they need updates," he said, adding that he doesn't believe it would cost millions of dollars to make them habitable.

"It all depends on what standards you want," he said. "Do you want minimum standards and pay $900 rent? Or do you want to put them up to Edina standards and pay $1,500 rent?"

After the residents are evicted, Khan said, he will do some rehab work and sell off the houses.

"I am cleaning them up," he said. "Do minimum repairs and put them on the market."

Frey pledged relocation assistance for the families and $500 per month in rental assistance for an entire year, with funding coming from the Minneapolis Public Housing Authority. He said that his next budget will provide more housing inspectors — "a record-setting amount" devoted to affordable and low-income housing, as well as efforts to encourage more homeownership.

Frey also said the city attorney's office will be more aggressive in seeking authority from the courts to have administrators temporarily take control of rental properties of problem landlords.

"It's pretty outrageous; it's a systemic failure," said Eric Hauge, new executive director of HOME Line, a statewide nonprofit tenants rights organization, referring to the state of Khan's properties. "Landlords have almost entire control over the property, and there are not a lot of checks and balances."

Luke Grundman, managing attorney of the housing unit at Mid-Minnesota Legal Aid, said the group advocated for something to aid tenants rather than the cumbersome license revocation process.

"The license revocation [process] allowed him to effectively keep doing that while the revocation took place," he said.

Ralph Mitchell, 58, a truck driver who lives with his wife and three teenage children in a house owned by Khan in the 4000 block of Dupont Avenue N. dreads the looming eviction.

"We are upset and discouraged," he said. "We don't know where we are going to be living from day to day. These people can come and tell us to get out and we have no place to go."

Patricia Gant, 59, lives with her husband, Maurice, 43, and her 19-year-old granddaughter in a Khan property in the 2200 block of Emerson Avenue N. The house has broken windows, poor insulation and no storm windows. In the winter, she turns on the oven to stay warm. The house has a lead paint problem and is infested with rats and mice. Gant, who suffers from post-traumatic stress disorder, lives on a disability payment of $750 a month. Her husband, who has had two strokes, earns $120 a week through a temp service.

"All I can do is hope the Lord blesses me in order to find a place," Patricia said.

Many of the families have relied on United Renters for Justice, a tenants rights group, for support. Roberto de la Riva Rojas, co-director of the organization, said the city should find money to repair the Khan houses and in some cases find a way to sell them to residents.

"The city has been completely negligent," he said. "Now we are in this crisis, and solutions are hard to find."

Randy Furst • 612-673-4224