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CITY-IMPOSED BARRIERS TO AFFORDABLE HOUSING IN MINNEAPOLIS

   

A meeting was held before the Community Development & Regulatory Services of the Minneapolis City Council at 1:30 p.m. on October 21, 2014. Attorney John Shoemaker invited inner-city landlords to testify. He wrote: "Below are some of the issues that come to mind. I also believe that as part of the HUD required Citizen Participation federal regulatory requirement, that the City must allow submission of written comments to the City. I believe that written comments, complaints may be submitted to:

Matt Bower,
Minneapolis Office of Grants and Special Projects,
307M City Hall
Minneapolis, Minnesota 55415"

 

Shoemaker's appeal

See attached 2014 Mpls HUD Consolidated Housing Plan – Barriers to affordable housing.

Mpls has a federal obligation to look at the City’s housing related policies to determine if any policy, ordinance, conduct, etc. has an effect of reducing the net return on investment for private landlords or in any other ways acts or could act as a disincentive to providing housing to low and moderate income persons in the City. Also, the City must look as well at City housing and related policies and consider whether any law, policy or practice acts or could act as a barrier to protected class housing in the private market. Policies that cause housing costs to increase are an example. So are: Policies that displace low-income tenants; policies that keep rental units offline longer than normal; policies that frustrate the ability of the private market to turn vacant homes into occupied safe, decent and sanitary homes This required HUD Funding analysis is called the “Analysis of Impediments to Fair Housing Choice” (“AI”).

The City has not conducted an “AI” since 2009, and that AI failed to conduct the required analysis noted immediately above. In fact, Mpls has not looked at its own housing policies, ordnances , and conduct related to low-income landlords and such housing since the 2001 AI.

The City also has a federal funding duty to determine if any of its policies are acting as a “barrier” to affordable housing. 10,000 family units are waiting for affordable and available housing in Mpls, another 8,500 in St. Paul. The City is not building dwellings for large minority families. 3-4 bedroom are hard to find at low rental rates. Yet, the City is continuing its targeting of low-income rental property owners in the inner city, using “code to the max” enforcement of the City’s claimed minimum maintenance standards. The City admits that between 2005 and 2011, it raised its revocation of rental dwelling licenses by 500%. City hearing minutes continue in the fall of 2014 to show large numbers of rental dwellings being targeted by code enforcement and subject to rental license revocations. Some owners are being offered probation conditions with management plans demanded for avoiding the revocation of license. Lose two, lose all licenses and all tenants must leave – are displaced.

JRS

 

William McGaughey's letter in response



October 21, 2014

Matt Bower
Minneapolis Office of Grants and Special Projects,
307M City Hall
Minneapolis, Minnesota 55415

Dear Matt Bower:

As a small-scale landlord in a relatively poor neighborhood, I have been asked whether I think Minneapolis city policies work to suppress the supply of affordable housing in the city, especially as regards racial minorities. I have had a predominately black clientele since I entered this business a quarter-century ago. And, yes, I have had problems with the city, though not so many lately.

I bought a nine-unit apartment building in Minneapolis in August, 1993, that had drugs problems and immediately interviewed the tenants to see what could be done. Two weeks later, I was summoned to a special committee meeting of the neighborhood group, Harrison Neighborhood Association, which included the city council representative. These people told me that I was naive to think the situation could be improved with tenant cooperation; I needed to evict all the tenants immediately and start over again. Ultimately we agreed that I would evict some of the tenants and keep others.

However, animosity between me and the neighborhood association (and the “good” landlords who were cooperating with the neighborhood association) continued to simmer. A year and a half later, in February 1995, the city decided to do a two-pronged attack on my property. First, a city health inspector condemned the apartment building for cockroach infestation (although the building was under the continuous care of a pest-control firm). That emptied the building of tenants. Then, a city housing inspector did a “rental-license inspection”, preparing a long list of repairs that needed to be done before the building could be repopulated with tenants. These cost around $50,000. Representatives of the city council and the police were present at the inspection.

People were expecting that I might not have the money or credit to sustain the inspections attack and therefore would have to sell to one of the “good landlords” at a deep discount. In fact, the owner of the building across Glenwood made a cash offer, ridiculously low, to buy me out. However, I was able to complete the work orders satisfactorily and keep the building under my own control. (I have written this up in greater detail and posted the narrative at http://www.landlordpolitics.com/communitypolicing1.html.

This will give you an idea of some of the political games played back then. My city council representative, Jackie Cherryhomes, who later became president of the Council, was notorious for attacking landlords at the behest of her constituents. The neighborhood organization became a vehicle for organizing the attacks.

My only other major encounter with the city came in February and March, 2011, in connection with a divorce. My wife had me arrested for domestic abuse. A judge therefore ordered me to stay away from my house because my wife lived there. During that period, the city did a rental-license inspection on this property. The inspection was conducted by a man associated with the “Problem Property Unit”, which I take to be the political arm of the Minneapolis Inspections department. He, too, compiled a list of needed repairs, assigning a certain number of points to each. The total number of points exceeded a certain number so that my house was condemned. A condemnation notice was posted on the front door.

The situation was this: I could have the condemnation lifted, and therefore keep my home, if I did work to satisfy enough work orders to get the point total below the number triggering condemnation. On the other hand, I was legally unable to set foot on the property because of the domestic-abuse arrest. Ultimately, my friend and maintenance worker did the required work; so it, again, had a relatively happy ending. The domestic-abuse charges were largely bogus - unrelated, I think, to the housing situation - but they made my life miserable for a time. This story has been posted on the web at http://www.billmcgaughey.com/domesticabuse.html.

Now let me speak to the general situation. I think the politics driving much of the city’s housing policy and that politics are this: You have white homeowners in most neighborhoods in Minneapolis, who are the core of the DFL activists in those areas. (They vote.) The areas each have a neighborhood association that is funded by a combination of Neighborhood Revitalization Program (NRP) funds and foundation grants. Most have paid staff. The city council representative works closely with these neighborhood organizations to do his or her politics.

Landlords are unpopular figures in these neighborhood organizations and in the neighborhoods themselves. Why? Part of it is cultural; the stereotypical landlord is a villain in pop culture. Part of it, however, is that the landlord is linked in the eyes of neighbors with tenants living in the landlords’ buildings. If any of those tenants are involved in crime, then this affects the landlord’s reputation. The city encourages this kind of thinking because it takes attention off the police who would normally be responsible for controlling crime. Landlords, rather than police, are blamed for neighborhood crime. The white “neighbors” may also dislike having blacks live in nearby rental properties because it may bring property values down.

The dynamic of the situation is that the largely white neighbors call their city council representative to complain about the landlord’s building or tenants. The city council representative then contacts inspections to look into the complaint. The more calls, the more pressure is put upon the landlord in various ways. The general idea is that, if the building went away, so would the people causing the problems. So, inspections begins targeting particular landlords, making life difficult for those landlords, in response to constituent complaints.

Is it the city’s fault that neighbors complain? No, not if the complaints are spontaneous. However, the neighborhood organizations become incubators of the complaints, as what happened to me. People who have attended certain meetings associated with them tell me that neighborhood residents are sometimes coached on how to make effective complaints. The neighborhood organizations sometimes take an even stronger stand. In my case, the organization organized a hate rally, attended by the city council representative, to denounce me and make nonnegotiable demands. This happened on April 1, 1995, when my building was condemned. And since the city funds the neighborhood organizations, the city must be held at least partly responsible for efforts made by these organizations with paid staff to put pressure on the landlord and perhaps get rid of his buildings and the tenants who live there.

The city of Minneapolis has an ordinance that allows the city to revoke rental licenses on all the properties a person owns in the city if the licenses have been revoked on at least two of the person’s properties. Such license revocations are, of course, a broom to sweep away all the tenants in one fell swoop. So, if you want to get rid of racial minorities in the city, this is the way to do it. The city can claim that it is merely trying to maintain standards in its housing stock. However, the legitimate interest of city housing inspections has to do with standards relating to health and safety. These relate to particular buildings, not to the persons who own them. This ordinance, targeting building owners to get rid of tenants, is a piece of political chicanery worthy of the old segregationist south; it directly suppresses affordable housing stock. A professional inspections department would focus on the condition of particular buildings.

From my perspective, things are not as bad today as a decade or two ago, but it could just reflect my own experience. The main element affecting the fairness of housing inspections is the city council representative. I have had two good ones and two bad ones in recent years in the fifth ward. The bad ones were Jackie Cherryhomes and Don Samuels. The good ones were Natalie Johnson Lee and Blong Yang, the current council member.

I would identify two types of problems affecting the city’s stock of affordable housing that could be immediately addressed. First is that terrible ordinance that allows the city to revoke all a landlord’s rental licenses. Second is city money going into the neighborhood complaint machine so that calls will be made to generate inspections activity.

Sincerely,

William McGaughey

 

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