Securing Minnesota s Housing Future The Governor s Task Force on Housing

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1 Housing Stability & Opportunity and Rental Housing Work Groups March 12, 2018 Meeting Summary, Minnesota Housing Offices Attendance Housing Stability and Opportunity Workgroup Members: Paul Williams and Sheila Kiscaden (co-chairs), Diana Sprague, Lael Robertson, Neil Loidol, Representative Alice Hausman, Brad Hewitt (by phone), Rental Workgroup members: Deidre Schmidt and Skip Duchesneau (co-chairs), Rick Goodemann, Acooa Ellis, Cecil Smith (on Behalf of Mary Rippe), Harry Melander, Mayor Mike MaguireStaff: Mary Tingerthal, Merritt Clapp-Smith, Cathy tenbroeke, Ellen Sahli, Jessica Deegan, Emily Seddon, Wes Butler, Gretchen Buechler Others: Greg Ross, Diane Dube, Shelby Simmons, Mike Tessneer, Shannon Geursney, Anne Mavity, Kristen Ferriss, Ellen Bauldler, Jodie Boderman, Sheena Thompson, Lara Jelinek, Barbara McCormick, Dara Lee, Dominic Mitchell, Jennifer Berbman, Liam Higgins, Joe Abraham, Bernadette Horning, Bob Sandberg, Bl Olson, Tara Beard, Jack Cann, Kim Leiberman, Michael Waldegerma, Tina Weitzel, Aurora Saenz, Charlie Vander Arde, Stephanie Brown, Lee Blons, Jean Lee, Heather Corcoran, Sasha Bergman, Larry McDonough, Eric Muschler Summary of Key Themes This joint meeting of the Housing Stability and Rental Work Groups focused on tenant experiences and legal issues associated with barriers to accessing housing and utilizing housing choice vouchers. The Work Groups heard from two panels. One panel provided tenant and tenant advocate perspectives and a second panel provided perspectives from private landlords and public housing authorities (PRAs) and housing and redevelopment authorities (HRAs) that own/operate subsidized housing and administer the housing choice voucher program. The discussion ranged from displacement due to the conversion of naturally occurring affordable housing units to market rate, evictions, and difficulties using housing choice vouchers. Tenants and tenant advocates recommend efforts to level the playing field between landlords and tenants, starting with better and increased communication from landlords when there are plans to renovate or when a sale to a new owner is possible. When displaced from units for renovations or after a sale, tenants face difficulties accessing housing, whether they have a voucher or not, due to stringent tenant screening procedures, onerous requirements for deposits or income, or racial discrimintation. Evictions were also cited

2 as a significant challenge for tenants. Even after working out an agreement with the landlord or moving, an eviction on a tenant s record limits future housing options. Housing authorities are tasked with providing housing to the lowest income populations. Costs of providing housing and services continue to rise. With decreasing federal resources, they are unable to meet the need. Private landlords want to be part of the solution. Tenant screening is used to mitigate risk and help set tenants up for success. Some recommendations, detailed in the following section include: requiring landlords to provide early communication regarding sales of properties putting expungement provisions into an eviction process pay or quit provisions prior to filing evictions providing pooled renter insurance and navigators to help get on equal footing providing emergency transitional assistance for displaced tenants Meeting Notes I. Welcome and overview of joint meeting purpose and agenda Chairs of each Work Group welcomed members and guests. This joint meeting requires extra time from the Work Group members, so thanks to everyone who is in attendance. This joint meeting represents the overlap in the subject matters of the Work Groups there is common ground and shared interests. II. Tenant advocacy panel Panelists Tonya Simpson Renter, Osseo Aurora Saenz (Shelby Simmons, translator) Renter, formerly Crossroads in Richfield Eric Hauge Public Policy Director, HomeLine Laura Jelenek Attorney, Southern Minnesota Regional Legal Services (SMRLS) Issues with Displacement after Conversion from Naturally Occurring Affordable Housing There is an imbalance in power between tenants and landlords. Tenants lack access to information about a property s sale or rehabilitation. This lack of access to information results in confusion about status of their tenancy and prevents them from being able to explore other options in a timely manner. During rehabilitation of privately owned buildings, tenants may not receive adequate notice of when they will not have access to their units.

3 New owners may raise rents, refuse to accept vouchers, choose to not renew leases, and change other policies within the building (e.g. removing access to amenities). Notices of large rent increases and requirements to vacate are often too short to provide adequate time to find a new home. This is especially problematic when there are school children involved and the move must occur during the academic year, or for families with special needs or other barriers to finding housing. Displacement from units due to new ownership is breaking up communities. Displacement during a tight housing market makes it difficult to find another unit, in part due to tenant screening procedures that require 3x rent income level, requiring a social security number, previous evictions, etc. Greater Minnesota has additional needs, for example manufactured home parks along transit corridors are at risk for loss of affordable units. Another example in Greater MN is in Rochester, where short- term rentals to visitors are replacing naturally affordable rental units for local residents. Barriers to Using Vouchers & Accessing Housing Those displaced with vouchers (and those with vouchers in general), have a difficult time using vouchers in a tight market. Tenants may face racial discrimination when searching for new housing. In a fair housing survey conducted by SMRLS, the top issue cited by tenants of color was not being able to live in a neighborhood that I want because of my race. Criminal convictions older than 10 years, or arrests/charges are often a basis to deny tenancy. Language access is a problem for households who do not have English as a first language. Issues with Evictions Evictions are problematic in terms of how they occur and because they stay on a renter s record for 7 years. HomeLine will be releasing a statewide study on evictions this spring. In a survey recently conducted by SMRLS, stakeholders said housing related issues were one of the top three important issues, evictions being number one. Evictions are more commonly occurring in the Twin Cities metro, especially Hennepin and Ramsey Counties. Evictions for nonpayment are most common. There are often complex reasons behind nonpayment of rent, such as mental health issues, medical emergencies, major car repairs, and job loss. Recommendations

4 Landlords should be required to have more and earlier communication with tenants in the case of rehabilitation activities or sale of the property. In the case of abrupt displacement, tenants with the highest needs should have access to short term assistance to help prevent homelessness. Similar to work being done with Ramsey County, include expungement provision in the court order for evictions. Also, change eviction filings so that they are not public record until a judgement has been issued. It would be helpful to have statutory changes to do this, but it could be done via courts. Join the 43 other states that have pay or quit (pay or move) provisions for evictions. This would require a notice to the tenant informing them they are behind in rent and give them a certain number of days to pay or vacate their unit before an eviction is filed. Many professional landlords promote this as a best practice already. Consider a housing bill of rights, a baseline of rules and regulations. Promote and provide a comprehensive tenant laws handbook. Consider other housing models, such as communal ownership. Leverage action items in the Twin Cities Regional AI to address displacement. IV. Landlord perspectives panel Panelists Greg Russ Minneapolis Public Housing Authority Dara Lee Clay County Housing and Redevelopment Authority Jennifer Bergman Brainerd Housing and Redevelopment Authority Joe Abraham and Bernadette Hornig Minnesota Multi Housing Association Perspectives from Housing Authorities Federal programs adhere to regulations and policies to protect tenants. There have been severe cuts to federal funding for public housing and vouchers. Local and state jurisdictions must look at ways to make up those cuts. Risk mitigation for landlords is important. Clay County had a pilot Landlord Risk Mitigation Fund that predated the current Minnesota pilot. It s important to have something to help tenants get on equal footing to those with no risk or barriers. Housing authorities have long wait lists, both for units and for vouchers. Issues with vouchers getting used in smaller localities and ported to larger cities. The local housing authority loses that voucher. Perspectives from Private Landlords

5 Minnesota is well known for having a high percentage of local owner operators. Compared to national trends, there are not as many absentee landlords, which provides a unique opportunity to problem solve. Landlords are interested in being involved in solving the housing crisis. We are all in this together. Tenant screening is not about being punitive, it s about risk mitigation. Landlords fill units with first qualified applicant. Being qualified means that the tenant will be successful in the business relationship of a lease. Landlords want their residents to be successful, and they feel like it will set up their renters for success. Mandatory requirements to accept Section 8 are unnecessary if other changes are made to help tenants be ready for stable housing situations, for example, providing emergency temporary assistance. We need to provide funding to help people who are not able to participate in the market through a social safety net. Example of a solution: Transactional displacement Minnesota Multi Housing Association worked with St Louis Park on an ordinance to set requirements for timing and communications regarding potential displacement. Need to provide funding to help people who are not able to participate in the market social safety net needs to be there. Recommendations Provide renter insurance that can cover nonpayment of rent or damages for tenants who take a renter education class. Pair tenants with navigators to help access housing. Expand access to supportive services such as HUD s ROSS program help provide resources for eviction prevention within public housing units. Provide additional resources to help with public housing capital, consider expanding the state funded Publicly Owned Housing Program (POHP as funded by GO bonds), and continue to prioritize preservation of federally assisted housing through other funding programs (such as tax credits). Need transitional or emergency housing resources and services to assist tenants with barriers or in an eviction scenario into accessing stable housing. Consider alternative credit checks, for example, past rental payments are not in credit reports, but are a great indicator of likelihood to pay rent. We need more data on renters with criminal records. If there is more data about their success as renters, more landlords may be willing to rent to people with criminal records. Need to invest in housing as infrastructure, support Governor s bonding bill for housing infrastructure bonds. Continue to rethink public private partnerships, work with landlords and property owners on solutions. Consider master leasing as a solution to getting people with barriers access to housing.

6 Public Comments Dominic Michael St. Paul Section 8 Program. It took St. Paul eight years to get through 12,000 wait list applications from 2007, and when the wait list opened again in 2015, it filled with 11,000 applications. St. Paul has a 85% placement rate for vouchers. They are open to solutions and started a landlord advisory group two years ago to help identify these barriers. They are at the table. Jack Cann Housing Justice Center. Statewide, the vast majority of people paying more than half of their income toward housing are those that are extremely low income (ELI, <30% Area Median Income). This is a fair housing issue because minority households are four times more likely to be ELI. You can t provide affordable housing for this population without operating or tenant subsidies, but there are inadequate and declining federal resources that focus on this population. We need to start talking about recommendations for rent and operating subsidies. Ellen Bauer Arc Minnesota (?). Here as an advocate for persons with disabilities, most of whom are low income (below 30% AMI). There is a lack of accessible housing for persons with disabilities. The federal government is not addressing this issue, so state and local agencies must work to address it. We have to create new units through state and local resources if federal government funding isn t available. It takes operating or tenant rental subsidies to do that, we have to be willing to pay for it. Linda Soderstrom former Crossroads at Penn tenant. We need to merge business and emotional interests. She has had trouble getting things fixed and repaired in her rental unit. It s a problem that there are not tenant unions any more. She has a feeling that evictions that are retaliatory have increased over the past 30 years. Tenants should be given 90 day notice of intent to sell. Consider rent control. Also consider that our most needful persons cost more. Do not put eviction notices under the door please put a stamp on it and mail it. Larry McDonough Dorsey. He is a tenant advocate, has been a landlord on and off in Bloomington and St. Paul. It is a problem that landlords don t have liability for accidents due to disrepair of the property. We should put the liability of poor maintenance on the landlord. VII. Wrap up discussion: How would our two work groups like to organize our next steps on the important topics identified today? Next Steps The Housing Stability and Opportunity work group will consider today s issues related to access and maintenance of housing. The Rental work group will consider issues related to production and preservation, including units for the lowest income.

7 The groups will need to stay in communication as they develop recommendations related to these topics to ensure they are both compatible and distinct. Further Information Needed Need more information to make informed recommendations about ideas related to legal ordinances and statutory changes. Need to talk more about racial discrimination how would it be addressed in a recommendation? Need more information on how private landlords can be worked with. Issues in tenant screening and treatment are more likely to be in private rental settings. What is the housing bill of rights and how can we support it? Is this a more attractive solution over a series of local ordinances? How can we support housing navigators? Are there any reforms we can do to provide housing navigators? How can we help support landlords to maintain baseline housing quality? How can we connect the services to housing more effectively? For example, sometimes there are cuts to services, and private landlords don t tend to have access to services.