Landlords are warning that rents will rise in Minneapolis if the City Council requires property owners to consider renting to low-income people with government vouchers, a proposed law they say ignores deep problems in the way the Section 8 program is run.

The Minneapolis City Council will hold a public hearing Wednesday on the ordinance, which would prohibit landlords from denying renters because they have a Section 8 voucher. But the Minnesota Multi Housing Association launched an advertising campaign this week against the ordinance and its sponsors, Council Members Elizabeth Glidden and Abdi Warsame.

"We already have affordable housing problems in the city, and we need to take care not to destabilize the market," said Cecil Smith, a landlord with 80 units, mostly in south Minneapolis. "It's not about the people, it's the program. Functional programs work for the residents as well as the landlord, and this is a dysfunctional, broken program."

City officials say the landlords' campaign is a case of misdirection, and the ordinance is simply a way to forbid discrimination against Section 8 renters.

"If you go on Craigslist right now, you will find multiple listings that very clearly state, 'No Section 8,' " Glidden said. "That lack of looking at the applicant and giving them a fair shot is exactly what the ordinance seeks to prohibit."

The landlords took out a full-page ad in the Star Tribune, saying the ordinance will result in "coastal rents" in Minneapolis. They say the key problem is the bureaucratic burden of the program, which landlords will try to avoid by raising rents.

The landlords say "84 percent of Minneapolis apartments are within $50 per month of being priced outside of participating in the program," implying that if rents rise just a little, more than four out of five apartments in the city will be unavailable to Section 8 vouchers.

But HousingLink data shows that 75 percent of apartments listed in Minneapolis are already unaffordable to Section 8 renters and only 6 percent of apartments in the city are being rented by Section 8 voucher holders.

While Section 8 renters from other cities can bring their vouchers to Minneapolis, only about 200 voucher holders are looking for a place to live in the city in a given month, and the waiting list for new vouchers has been closed since 2008.

"Section 8 is such a small part of the market in any city," Glidden said. "Hard to see that 6 percent of the market has such a large impact on the overall market."

The landlords argue that the cost of handling the vouchers — lost rent due to the way the Minneapolis Public Housing Authority prorates payments, delayed payments, poor customer service for landlords and tenants, and unpredictable timelines for inspections — will disrupt the entire rental market.

A recent report commissioned by the nonprofit Family Housing Fund found much room for improvement at the MPHA, and Glidden said she has secured a commitment from the agency to ease its administrative burden on landlords within 12 months. Landlords are not convinced.

"Hate to be a skeptic, but I'll believe it when I see it," Smith said. "Fix it first before you mandate it."

The Family Housing Fund, in a statement Monday, said any ordinance such as the one before the City Council must be paired with improvements to the Section 8 program.

"A mandate, without significant administrative changes first, is unlikely to establish housing choice for low-income families," the group said. "Once these changes are implemented, the community can codify its value of nondiscrimination by source of income."

Adam Belz • 612-673-4405

Twitter: @adambelz