Whose business is housing?

by Tracey Goodrich on 25 September 2013

Created by OnlineMBA.com

OnlineMBA  recently shared this video contrasting how businesses and governments operate and interact with people they serve. Please take a moment to view the video—and return to read how this discussion relates to housing, and in particular, the dynamics of tenant/landlord interactions.

If you look at MHP’s most recent 2 x 4 report, you’ll see that the housing market for consumers is narrowing a lot. Demand is outstripping supply. This drives up the cost of rent, and drives out many cross sections of consumers (renters) who not only need a place to live, but who also need a decent place to call home. So where do these people go if the housing market is not serving them? Some become homeless. Others will find very undesirable and unstable situations to live in.

So how does a landlord in the rental business, whose job it is to make money, meet the demand for decent affordable housing for people who can’t afford the market rent in their community? They don’t. Housing is generally too expensive to maintain for a landlord to be able to charge a low rent. That means that landlord would lose money (not just a profit, but it is usually financially unsustainable) providing a service and product to an ever-growing group of renters who can’t afford much.

Here’s where government’s different goals and mission can help people get and stay on their feet. Government has the opportunity to partner with private landlords and other governments to provide housing at levels that are affordable to people who can’t participate in the mainstream market, but who still need a decent place to live so they can live healthy and independent lives. The rent is not only subsidized for the tenants, but the loans and grants that go to the owners are also subsidized to assist with the costs of maintaining the properties and business. This means that young students have a stable and decent place to focus on homework, parents can go to work at their jobs as nurses, administrative assistants, mechanics, food servers, etc. with the energy and focus they need to perform well.  People who are living with health problems or disabilities can focus on their own health, wellness, and independence. Retired seniors who are on fixed incomes can live with dignity.

Currently, many in Congress are trying to make government function like a business, but with a backwards business model. Rather than increasing revenue, they are looking at decreasing spending. Most businesses prioritize their bottom lines by looking for ways to increase their revenues first (you don’t have a business if you don’t have revenue, right?), then fine tune or balance that income by reducing their costs in order to maximize their profits—not the other way around.  We have a name for landlords who use this “less or no-spending” focused business model—slumlords. Slumlords are the resulting consequence of using such a model in the housing business. If a landlord is focused only on ways to cut their spending, it doesn’t take a genius to see that they are not fixing your backed-up toilet and they are not paying anyone to shovel your snow-covered walkway; they are not ensuring that your building is safe and decent.  They are irresponsible.

So let’s close by looking at one of the places where government and businesses can function similarly: investing for a prosperous future.  Businesses that invest in their futures are wise to know that employees who can afford decent stable homes and have their health and transportation needs met make more productive and reliable staff. Landlords that invest in their housing know that repairing a roof today is going to be far less expensive than waiting until it collapses to fix it. Government that invests in housing and other programs that assist its citizens means that down the road, it will spend less in homelessness services, prisons, and healthcare. It will also produce a smarter and healthier workforce at all levels that will benefit businesses and our overall economy down the road. Stay tuned to learn what important federal housing initiatives could help support a more prosperous future for us all.

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Based on calls from our statewide tenants’ hotline and our organizing efforts, HOME Line has selected nine proposed changes to Minnesota’s landlord/tenant law to push for in the 2014 legislative session.  We believe that these nine bills, each giving greater and clearer rights to Minnesota tenants, will help make our state a more fair and equitable place to live.  As we work to get these changes made in the state legislature, we need your thoughts, stories, and supportCheck out the proposed changes and fill out the survey to tell us which of the bills are most important to you, and to express your support for the Tenants’ Bill of Rights.  If you have a relevant story or experience you had relating to landlord/tenant law in Minnesota, please include it!

Minnesota Tenants’ Bill of Rights

A Legislative Proposal

1. The right to a warm home. During the cold weather period of October 1st to April 30th, your rental unit should be heated to at least 68 degrees Fahrenheit, should you want it that warm. How would this change current law?

2. The right to a well-maintained home. If your landlord takes more than 48 hours to respond to the need for an emergency repair, like lack of heat or water, you should be able to make the repairs and deduct the cost from your rent.  How would this change current law?

3. The right to housing regardless of receipt of rental assistance. You should not be discriminated against living in a rental unit due to the fact that part of your rent is paid by a Section 8 voucher or another form of rental assistance. How would this change current law?

4. The right to move in the case of severe illness or disability. If you are sick or disabled and your doctor says you need to move in order to seek medical attention, you should be allowed to break your lease by two month’s notice. How would this change current law?

5. The right to pay unpaid rent before your landlord files an eviction in court. If you are behind on rent, you should be notified and given a seven-day window within which to pay the past-due rent before your landlord files an eviction.  You should also be able to completely move out of the property within that 7-day window instead of facing an eviction. How would this change current law?

6. The right to privacy at home. You should have 24-hour notice before your landlord enters the unit.  Your landlord should also provide a specific date and window of time within which they will enter your unit. You should receive fair compensation for privacy breaches, and be allowed to sue in Conciliation Court for an invasion of your privacy. How would this change current law?

7. The right to be free from costs of normal wear and tear.  Current Minnesota law saws that landlords are responsible for costs of normal wear and tear.  Therefore, a landlord should not be able to include in a lease automatic deductions from your security deposit to be used for normal repairs, such as carpet cleaning. Deductions should be made only for damages that you actually caused. How would this change current law?

8. The right to have proof of cost of security deposit deductions.  Along with an itemized list of deductions from your security deposit, a landlord should have to provide proof that the costs they assigned for repairs to be deducted from your deposit are accurate and appropriate. How would this change current law?

9. The right to fair treatment if the lease is broken.  If you must move out before the end of your lease, your landlord should make a good effort to re-rent the unit before suing you for unpaid rent. How would this change current law?

10. The right to pay a reasonable security deposit.  Tenants should be allowed to rent an apartment, paying no more than 1 month’s rent, and no more than 1 ¼  month’s rent if a pet is added to the lease. How would this change current law?

SURVEY

Your survey will be used by HOME Line to find out which issues are most important to tenants across Minnesota, show state legislators how important fair landlord/tenant law is to residents in their districts, and share tenants’ stories that show the need for better laws.  WE NEED YOUR HELP to inform policymakers about the issues most commonly faced by tenants.

THANK YOU FOR YOUR HELP! Please continue to check the blog for updates on the 2013 Tenants’ Bill of Rights!

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What would change?


1.    The right to a warm home.

What is the current law?

While many cities have citywide heat codes, there is no overarching heat code for the state of Minnesota.  This means that residents in Minnesota cities without rental codes, like Deephaven, New Ulm, and Ham Lake,  may have more difficulty enforcing their right to a warm home.

What would change?

This bill would enforce the same heat code for the whole state, guaranteeing all Minnesota tenants the right to a warm home through the cold season. Landlords and tenants alike would benefit from a clearly defined statewide rule, rather than a patchwork of confusing and different local rules.

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2. The right to a well-maintained home.

What is the current law?

If a landlord does not begin making emergency repairs within 24 hours of notice, a tenant can currently file an Emergency Tenant Remedies Action (ETRA) in court.  The court can then require that the landlord fix the problem or lower rent in exchange for repairs being made by the tenant.

What would change?

The proposed law would give tenants the ability to bypass the ETRA process if landlord is unresponsive for 48 hours.  The law would ensure that the cost of repairs would be deducted from rent without the tenant having to first take the case to court.  This would be good for the tenant, as emergency repairs are very time sensitive, and even ETRA cases can take valuable time.

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3. The right to housing regardless of receipt of rental assistance.

What is the current law?

Right now in Minnesota, landlords cannot discriminate based on race, color, creed, gender, marital status, family status, national origin, sexual orientation, religion, receipt of public assistance or disability. Landlords can deny prospective tenants if they intent to pay a portion of their rent with a rental assistance program such as a Section 8 voucher.

What would change?

This bill would extend anti-discrimination protection to people receiving rental assistance through programs such as Section 8 vouchers.

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4. The right to move in the case of severe illness or disability.

What is the current law?

There are no specific laws regarding infirm tenants, and it is up to the landlord’s discretion whether the lease can be broken or not.

What would change?

This bill would require landlords to allow sick tenants to break their lease with two month’s notice. The tenant still has an obligation to pay rent during the notice period.

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5. The right to pay unpaid rent before your landlord files an eviction in court.

What is the current law?

Unlike 80% of the states, Minnesota allows a landlord to file an eviction without first giving the tenant a written demand for unpaid rent and an opportunity to remedy it. A “cure period,” or a window in which to pay unpaid rent, does not currently exist in Minnesota state law.

What would change?

This law would require landlords provide a 7-day notice giving tenants a window of opportunity to pay unpaid rent before having an eviction action filed against them.  It would also give tenants an opportunity to vacate the property within the 7 day window instead of facing an eviction.  It would then be up to the landlord, the tenants, and the court to figure out how unpaid rent will be remedied.

Additionally, this 7-day notice could be used for purposes of obtaining emergency financial assistance from a county government before the eviction has been filed. This would reduce government costs and needless eviction actions.

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6. The right to privacy at home.

What is the current law?

Current Minnesota law says that a landlord must give “reasonable” notice to enter a unit, and allows tenants to sue via a rent escrow action for up to $100 per violation.

What would change?

This bill would clarify that a minimum of 24-hour notice is required. This bill would also increase the penalty for landlord breaches of tenant privacy from $100 to $500 in order to account for inflation since the statute was originally enacted.  This law would also allow a tenant to sue for damages in small claims (conciliation) court after moving out.

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7. The right to be free from costs of normal wear and tear.

What is the current law?

While Minnesota law says that landlords are responsible for addressing the costs of repair from normal wear and tear, many landlords put clauses in the lease indicating that a certain amount of money will be automatically deducted from a security deposit to cover the costs of carpet cleaning, pets and administrative fees, etc.  These landlords know that most tenants are unaware of the law mandating landlord responsibility for normal wear and tear.

What would change?

This bill would explicitly make these mandatory deductions illegal, closing loopholes for landlords to get around their obligation to pay for normal wear and tear. Landlords would continue to be required to prove a tenant caused damage beyond ordinary wear and tear.

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8. The right to have proof of cost of security deposit deductions.

What is the current law?

Minnesota state law currently requires landlords to provide “specific reasons” why deductions are made from a security deposit.  The law does not require that the list have proof of costs (receipts, time sheets, or estimates).  Some landlords use this as an opportunity to charge tenants too much for repairs at the end of their tenancy, knowing the tenant has to sue to even have a chance to see if the charges are legitimate.

What would change?

Within 21 days of the end of tenancy, landlords would be required to provide proof of costs in order to show that the amount deducted from the security deposit is appropriate.  If the tenant still feels the charges are incorrect, they can sue.

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9. The right to fair treatment if the lease is broken.

What is the current law?

As it stands right now, a landlord does not have an obligation to try and re-rent a unit if the tenant vacates early.  While this new bill would not allow tenants to break a lease without any repercussions, it would ensure that landlords at least put in an effort to re-rent the unit before charging the tenant rent for the remaining months of the lease or suing for unpaid rent.  Minnesota is one of only a handful of remaining states that hasn’t changed this rule, requiring a landlord to attempt to mitigate their damages.

What would change?

If a tenant vacates early, the landlord would be required to put in a good-faith effort to re-rent the property before continuing to charge the former tenant for rent or suing the tenant for unpaid rent.

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9. The right to pay a reasonable security deposit.

What is the current law?

There is currently no limit or cap on security deposits in Minnesota. Some affordable housing programs limit security deposits, but for the majority of Minnesota rental housing, a landlord is free to charge whatever amount they deem necessary.

What would change?

Security deposits would be capped at no more than 1 month’s rent or 1 & 1/4 month if a pet is included on the lease.

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