New Hope has become the latest city in the metro area to approve an ordinance protecting low-income tenants, but some housing advocates say such ordinances are Band-Aids at best and that cities should instead focus on building more affordable housing.
The ordinances generally ensure that tenants get timely notice of new ownership, rent increases and whether the new owners will require rescreening of tenants. Notice must also include information on the tenant protection period (90 days), relocation assistance and penalties for owners not in compliance.
But the ordinances don’t prevent tenants from being displaced or protect existing housing. And Cecil Smith, president of the nonprofit Minnesota Multi Housing Association (MHA), said they distract from the real issue: the lack of affordable housing.
Passing these ordinances “probably feels good to do, but I’m not sure if there’s any data to support that this actually works,” he said.
Smith added that if one city passes a measure, “then everybody just raises their hand and says, ‘We should probably do that, too.’ ”
New Hope’s ordinance, modeled after measures passed in St. Louis Park and Golden Valley, will apply to four or five apartment complexes in the city, Development Director Jeff Sargent said. Fourteen apartment buildings offer some affordable housing, but city officials don’t have a clear idea of just how many properties will be affected by the ordinance or how many tenants will benefit. It applies to apartments where at least 20% of the units set rent affordable to households at or below 60% of the area median income.
St. Louis Park was the first to pass an ordinance protecting affordable housing tenants, in 2018. It was crafted in response to the “Concierge phenomenon,” Smith said, referring to the name of an upscale apartment complex in Richfield created out of formerly affordable apartments. A lawsuit filed in 2016 by the displaced tenants resulted in a record $650,000 settlement.
Following St. Louis Park, Golden Valley enacted a similar ordinance and Richfield did the same. Last year, Brooklyn Center, Minneapolis, Bloomington and Hopkins enacted tenant protection ordinances as well. They were joined this year by Brooklyn Park and now New Hope.
But Smith said those ordinances wouldn’t have prevented what happened with the Concierge complex in Richfield, though they might slow the process of displacement and offer relocation pay.
A St. Louis Park spokesperson said at least a half-dozen properties have been affected by the ordinance, but none triggered relocation benefits.
Sargent said local churches wanted New Hope to adopt the ordinance. He said city officials had been aware of the issue as far back as 2017, when a few residents said they feared being displaced.
“That helped us understand that yes, this is an issue,” he said. “We wanted to get out ahead of it a little bit. We understood at that point that something should be done.”
To stabilize rent, Smith said, housing production needs to accelerate. But tenant protection ordinances do nothing to incentivize housing production or lower the cost. He said the typical permitting and planning processes that developers must follow also tends to hinder production and development.
Public comment on housing proposals also creates headwinds, he said. “Affordable housing comes into the discussion and people rise up in opposition [and] developers realize we’re not welcome in this market,” he said.
Smith said one solution would be a local factory creating modular affordable housing. Prefabricated apartment units in California and Idaho are bypassing conventional construction sites to tackle the affordable housing crisis, he said.
“Passing an ordinance is nice, but those folks need housing and they need affordable housing for the long term — and we need to build it for them,” he said.