Minneapolis considers new rental permit system

Jessica Jee

Star Tribune

Minneapolis city officials could soon stamp all rental properties with a new label based on their number of inspections, citations or police calls to give prospective tenants a better assessment of what they're signing up for.

The rankings would reflect where landlords fall into a new tier system and determine property owners' licensing fees based on their compliance with city standards. A proposal to establish the labeling system and hike some landlords' fees is likely receive final approval in the coming months.

Minneapolis officials discussed the potential change at a committee meeting Tuesday, where some raised questions regarding the proposed system's fairness on behalf of both tenants and landlords.

Councilmember Jacob Frey said it is important the change doesn't negatively affect property owners who work hard to achieve a good ranking but manage tenants who drive up calls and citations for reasons beyond landlords' control.

In addition to city inspections and other city-led assessments, the new labels will consider the amount of police incidents for drug offenses, prostitution, loud parties and violence.

Council members did not want to count incidents of domestic violence, fearing that tenants might feel pressured not to call police if they are the victim of abuse. The council also wants city staff to consider the makeup of the tenants of a building whe making the rankings for the property owner.

"How can we be sure that we're not too hard on owners that are doing a really good job and are taking some [individuals who suffer from] mental illness or substance dependency or straight from homelessness," Frey said of well-meaning tenants who can result in more police calls. "I don't want to discriminate against the individuals who are doing their work."

Regulatory services chief Nuria Rivera-Vandermyde said the city staff would assess those scenarios case-by-case to ensure they are making fair assessments.

"We are cognizant that when we touch rental that we, perhaps, touch particularly communities more than others," she said. "We sit down with folks, and we look at the circumstances…and adjust as needed."

Only about 3 to 4 percent of the city's total properties would fall into the most problematic category, Rivera-Vandermyde said. But those properties, she said, require more staff resources because of their amount of inspections, and the higher fees can make up for those costs.

"There are bad apples in every bunch," said City Council President Barb Johnson, who authored the change.

Under the current billing model, property owners pay a $69 licensing fee and then another $19 per additional unit. The change would raise that fee based on properties' placement in the three-tier system, while lowering the per-unit price for owners of large complexes since those are typically in better compliance with city standards.

If a property owner would move to appeal his or her ranking, Rivera-Vandermyde said the department would do an internal review and move forward by using that assessment. And based on the city's more than 17,000 rental properties with one to three units that already use a similar tiered system, she said, landlords haven't brought forward any serious objections to the appeal process.

The change follows the city's introduction of a new, data-driven method to push landlords into improving their properties. City housing staff started inspecting and rating Minneapolis' more than 23,000 rental properties last year to formulate a list of the city's worst rental properties that unless improved, cannot obtain new licenses.

If it receives final approval in the coming months, the tiered system will roll out this summer. City staff will add the labels to landlords' licenses and properties, as well as make them available online.

"We really tried hard to be balanced and fair," Rivera-Vandermyde said. "We know this will impact people … We want to make sure property owners know that it rests on them, whatever tier they land on."

Jessica Lee is a University of Minnesota student on assignment for the Star Tribune.