On Friday, September 13, 2019, the Minneapolis City Council passed the Renter’s Protection Ordinance. The ordinance was closely monitored by Minneapolis Area REALTORS® and its Government Affairs Committee and staff. REALTORS® submitted official comments to multiple drafts of the ordinance and was in regular communication with Minneapolis City Councilmembers, Mayor’s office, staff, and other stakeholders.
What Will the Ordinance do?
The ordinance will cap security deposits at 1 month’s rent and gives property owners two options for screening potential renters: use inclusive screening criteria outlined in the ordinance or conduct an individualized assessment. The inclusive screening criteria limits consideration of criminal background and rental history. A credit score by itself cannot be disqualifying, although information within a credit report directly relevant to fitness as a tenant can be relied upon by a landlord. Insufficient credit history itself can also not be disqualifying, unless the applicant in bad faith withholds credit history information that might otherwise form a basis for denial. It also requires landlords to provide an exception to their 3 times income to rent test, if the tenant can show a successful rental history.
REALTORS® official position on the ordinance was we recognize the importance of a strong yet inclusive tenant screening ordinance that creates opportunities for residents and balances protections for tenants and landlords.
REALTORS® noted several improvements between drafts. Increased upfront disclosure, lengthened look back periods, tenant demonstration of a successful rental history as a proactive and affirmative exception to landlord use of three times rent test.
However, several concerns were also expressed between drafts. The ‘more serious’ felony 10-year look back period contained a woefully inadequate list of disqualifying crimes. The list was not consistent with Minnesota Sentencing or HUD Guidelines. Ordinance language limiting security deposit to (1) months for most landlords and a more generous (1 ½) months for non-profit service providers was inconsistent and preferential. The ordinance lacked a landlord remedy for incomplete payment of pre-paid amounts that ordinance allows to be paid in 3-month installments. Finally, the ordinance unnecessarily creates conflict with current ordinance language that requires certain actions by landlords in the Conduct on Licensed Premise ordinance. Not all these remaining concerns were addressed in the final draft.
The council acted on several amendments. Some amendments were prepared ahead of time while others were occurring ‘on the fly’ as the council met. First prepared amendment further clarified the definition of rent.
Single month rent. For a lease in which rent is paid once each month in the same amount, single month rent means that amount. When a tenant’s rent is supplemented by a rental subsidy, rent means the total contract rent for the dwelling unit.
Second prepared amendment added additional felonies to the list for the 10-year look back period.
Any criminal conviction for the following felony offenses for which the dates of sentencing are older than ten (10) years: first-degree assault (Minnesota Statutes section 609.221), first-degree arson (Minnesota Statutes section 609.561), or aggravated robbery (Minnesota Statutes section 609.245), first-degree murder (Minnesota Statutes section 609.185), second-degree murder (Minnesota Statutes section 609.19), third-degree murder (Minnesota Statutes 609.195), first-degree manslaughter (Minnesota Statutes 609.20, subd. 1, 2, and 5), kidnapping (Minnesota Statutes 609.25, subd. 2(2)), or first-degree criminal sexual conduct (Minnesota Statutes 609.342, subd. 1(b) and (g)).
This change brought the ordinance into better alignment with both Minnesota Sentencing and HUD Guidelines, as suggested by the REALTORS®. Additionally, there was some discussion among councilmembers as to whether the 10-year look back period for more serious felonies, some seemed to be questioning whether was even necessary at all while still others thought the list of crimes might need to be expanded. A staff direction was passed to have City Attorney’s Office, Community Planning & Economic Development Department, and Regulatory Services to continue to examine the 10-year look back period. Ultimately, the 10-year serious felony provision did remain in the ordinance with the additional crimes added to the list.
A last-minute amendment co-sponsored by Andrea Jenkins, Council-Vice President, and Kevin Reich, Councilmember, would have provided an exception for small owner operators of 2-4 unit buildings when they also occupy one of the units. This was an attempt to protect and not harm small landlords. That amendment failed on a 6-6 vote. Councilmember Andrew Johnson was not present, he was attending other state meetings.
Another last-minute amendment also proposed by Andrea Jenkins, Council-Vice President, and Kevin Reich, Councilmember, extending the implementation date by 6 months from June 1, 2020 for all providers to December 1, 2020 for buildings with 15 units or less did pass.
What’s Next for the Renter’s Protection ordinance?
REALTORS® and landlords can make sure they become compliant with the new ordinance by following city produced guidance. The city will launch a cross-sector committee to create and execute an implementation plan for the ordinance. The committee will include representatives from legal and tenant advocacy organizations, the multi-housing industry and city departments. Again, the effective dates are as follows: June 1, 2020 (16 units or more) and December 1, 2020 (15 units or less).