A controversial proposal for immediate inspections and hefty fees when property goes rental or rental buildings change owners is under scrutiny at Minneapolis City Hall.
The proposal by three council members representing the North Side was triggered by the city's explosion of foreclosures and boarded-up properties. But landlords say it's way too broad. The proposal was held up this week for more debate.
Council President Barbara Johnson said she wished she had offered the proposal years ago before foreclosures tripled from 865 in 2005 to at least 2,500 last year. "That has fueled a tremendous turnover from ownership to rental in a number of neighborhoods," Johnson said. She is joined on the proposal by Don Samuels and Diane Hofstede.
Johnson said the city needs to make sure that rental property is safe, and getting into units and performing inspections is the only way to do so.
The proposal would require inspections when a rental building is bought or when a house goes from ownership to rental. Rental property is licensed already, but about 40 percent in the city is licensed provisionally before an inspection.
To pay for immediate inspections, the city would charge a $1,000 fee when a building goes rental or $450 when it changes owners.
"We think that this is overly broad," said Molly Grove, director of municipal affairs for the Minnesota Multi Housing Association. She said state law already gives tenants, neighborhoods or the city remedies by allowing a court to order the withholding of rent or to appoint an administrator to run a building. The city also can impose fines and citations, she said.
But Henry Reimer, the city's inspection services director, said that serial sales of rental property, as sometimes happens in shadier property schemes, mean delays as fix-up orders have to be reissued against new owners.
He said that the city is seeing more owners who are facing foreclosure renting their properties out of desperation to generate income, and that the newly minted landlords often lack property-management skills.
"Foreclosed properties tend to need some work, and we need to make sure they're safe to occupy," he said.
The proposal passed the council's regulatory committee by a 3-2 vote last week, but stalled temporarily in the budget committee Monday. Chairman Paul Ostrow said he thinks the proposal needs to be more targeted.
Representatives of nonprofit and larger, professionally operated rental businesses have told the council they don't think their buildings are the problem and ought to be exempted. Landlord Steve Schachtman urged that the proposal be limited to one- to three-unit buildings.
Steve Brandt • 612-673-4438