Appeals Court: Landlords can’t bar tenants due to subsidized housing

Low-income residents from Minneapolis with vouchers who qualify for subsidized housing have gotten a major boost from the Minnesota Court of Appeals.

The court ruled last week that the Minneapolis City Council did not violate the Minnesota constitution when it passed an ordinance in 2017 that barred landlords from refusing to accept tenants because they had what are known as Section 8 vouchers. Those vouchers ensure that a tenant will not spend more than 30% of their income on rent, with the remaining funds coming from the U.S. Department of Housing and Urban Development (HUD), dispensed by the Minneapolis Public Housing Authority.

“It’s really a huge win for tenants,” said Larry McDonough, an attorney for Minnesota tenants advocacy organization HOME Line, which filed an amicus brief supporting the City Council’s action. McDonough is considered one of the top experts on the state’s housing legislation and drafted much of the language in laws on the subject.

The rental housing market is very tight, he noted, and people can be on a waiting list for five years to receive a Section 8 voucher. Under the program, a tenant with $1,000 income would pay a maximum of about $300 a month for rent, the remainder being subsidized. Once people receive their vouchers, they have only 60 to 120 days to find a unit.

“If landlords aren’t willing to participate,” said McDonough, “then your chances of losing the voucher becomes really high.”

As a result, Minneapolis passed the ordinance that says landlords can’t discriminate against tenants who have Section 8 vouchers in order to make it easier to find housing without losing subsidies. Seeking to undo the City Council’s actions were “54 persons and entities owning multi-tenant properties,” according to the appeals court.

Attorneys Tamara O’Neill Moreland and Inga K. Kingland, who represented the landlords, declined to comment, said Kathy Nelson, a legal administrative assistant for both of them. They could appeal the decision to the state Supreme Court, although the court has the discretion as to whether to hear it.

As of 2018, the Minneapolis Public Housing Authority managed about 4,870 vouchers per year, benefiting about 17,000 people, the Court of Appeals said. Most were tenant-based, meaning the voucher holder selected the unit, but between 700 and 800 vouchers were attached to a particular rental unit or building.

The council ordinance made it an unlawful discriminatory practice for the landlord or any agent of the landlord to use “status with regard to a public assistance program or any requirement of a public assistance program [as] a motivating factor” to “refuse to sell, rent or lease, or refuse to offer for sale, rental or lease; or to refuse to negotiate for the sale, rental, or lease of any real property.”

Landlords would still be able to screen tenants and could refuse to rent to them, on certain grounds, such as the tenants’ rental record or evictions for using a property to deal illegal drugs, said McDonough.

In June 2017, the landlord group challenged the ordinance. Hennepin District Judge Bruce Peterson ruled that the ordinance violated due process and equal protection rights under the state constitution and issued an injunction, blocking it from taking effect. The Appeals Court reversed the district court decision on several of the claims and the state Supreme Court affirmed the appeals court.

After the city renewed its motion to have the case thrown out, Hennepin District Judge Patrick Robben dismissed additional claims by the landlords in December 2022 and lifted the injunction that barred the ordinance from being enforced. The landlords appealed again to the state Court of Appeals.

In a decision written by Judge Jennifer Frisch who was joined by Judge Matthew Johnson and Senior Judge Michael Kirk, the appellate court concluded that the ordinance does not take away property rights from the landlord and is not in conflict with the state human rights act as alleged by the landlords. It also found that the district court did not abuse its discretion in allowing amici briefs.

Jack Cann, an attorney who filed an amicus brief on behalf of the Housing Justice Center in St. Paul, and the Poverty & Race Research Action Council, called the appellate ruling “important, because the Court of Appeals rejected a legal theory proposed by the owners that would threaten a wide variety of tenant protection laws all over the country.”

McDonough said that while the Court of Appeals decision applies only to Minneapolis, he believes that state legislation may be introduced this year that would bar discrimination against any landlord who rejects the application of a tenant with a Section 8 voucher.

Randy Furst 612-201-5522