Small landlords fear Minneapolis limits on tenant screening

Minneapolis landlord Margie Pierce takes prospective tenants for coffee to get a sense of their trustworthiness. But she also does the standard background checks and references when screening a tenant, looking for a decent credit score, no evictions, no criminal history and a record of paying rent on time.

Pierce, who owns five small rental properties, said she tries to keep communication open to prevent problems. That includes encouraging her tenants to tell her if they can't pay rent or helping them find a cheaper place elsewhere.

"The truth is at the end of the day, things like a lease are there for when things go wrong," Pierce said. "I wish I could do it all in a handshake, honestly — I'd like to just be able to trust people."

On Friday, the Minneapolis City Council is expected to vote on an ordinance that would limit the ability of landlords to screen the backgrounds of tenants. Advocacy groups for renters have pushed the City Council to make the changes to curb discrimination among low-income households, people of color and people with criminal convictions while also giving a second chance to residents with eviction records.

Property owners have spoken out about the potential costs, both financial and emotional, if they have to take on tenants who have a criminal past or a history of unpaid rent.

Smaller landlords like Pierce say the restrictions hit them especially hard because they have less of a margin if they take on a destructive tenant.

Under the proposed rule, landlords can't deny an applicant on the basis of a misdemeanor if the conviction is older than three years and felonies seven years or older, and in certain cases of arson, assault or robbery, convictions more than 10 years old. The ordinance would not allow eviction judgments to be disqualifying if they happened three or more years earlier.

The ordinance would also limit how credit screenings are used, including preventing landlords from denying an applicant because of insufficient credit history. The proposed ordinance would also cap the amount landlords can charge for a security deposit at a month's rent.

Council Member Jeremiah Ellison, a co-author of the ordinance with Council President Lisa Bender, looked at criminal recidivism data and revised the rules based on feedback from tenants and landlords alike. He doesn't understand the landlords' objection "when the lookback periods are so long."

"When I talked to landlords I would ask the question, 'What is the screening criteria based on now?' and a lot of them would say in meetings and at open office hours that it's built off of what they've always done or what they were told to do," Ellison said. "Not that it was built on data or something concrete, just this long-standing ritual, so here I think is some real meat on the bones."

Lacey Gonzalez, who lives in south Minneapolis, hopes the ordinance will give everyone "a fair opportunity" to find housing. She said that, for 10 years, landlords have turned her down most often because of her debt and low credit score. She always paid her rent on time but admits that she did not always make credit card payments.

She has uprooted her family many times after living in rundown apartments that keep getting flipped by new landlords who then raise the rent.

"I find that kind of sad that they don't look at rental history and they just look at your score number or certain things that don't seem relevant to being a tenant," Gonzalez said. "Because most people, they're going to pay for rent before they pay any of their other bills."

But landlord Matt Mayotte said that with the new screening restrictions, he's "at a loss for how we're supposed to figure out who the good tenants are and who the bad tenants are." He's been a landlord for 10 years and owns two properties in Minneapolis and one in Crystal. In the past, he's taken tenants with eviction records and tenants with minor drug convictions.

He sometimes skips credit checks to save money and to keep applicants' credit scores from getting dinged. But if the ordinance goes through, he said he will have to consider raising rents to cover costs from taking on risky tenants. Or he will sell his properties.

"The thing is, if you chase people like me out, all you're going to have is the corporate-run places," Mayotte said.

If the ordinance passes, Pierce says she plans to turn one of her houses into a sober home, where she can help people but also have flexibility in determining who comes and goes. Otherwise, she would have to raise rents for her tenants to pay for problems that she would otherwise might not have faced.

"I don't care what your intentions were, when you've written the law that's so black and white, your intentions don't end up coming through," Pierce said. "You have not helped one person without harming someone else, and I'm the very real person that you've harmed."

Marissa Evans • 612-673-4280