Friday, January 29, 2010

Let's Put Some Limits on Provisional Rental Licenses

Guest commentary and stock photos (of a property that may or may not be owned by a slumlord) by the Hawthorne Hawkman.

I'd been kicking around an idea in my head for a while now about how to go about the problem of landlords who buy up large swaths of properties and then fail to take care of them or even avoid a cascade of foreclosures. I'm referring to Danna D III, Mahmoud Khan, Gregge Johnson, and Paul Koenig, among others.

At the Dessert with Don event this past week (where the Hillside Chronicle blog was generous enough to say that I was worthy of consideration for One Man Minneapolis), I tossed this idea out to a few people. This proposal centered around a pattern I saw when I researched and put live links to these slumlords' properties and noticed...

...a significant number of provisional rental licenses granted for many of these owners of multiple properties. Since city inspectors are too busy to do full inspections on every single rental property before it is rented/occupied, they often grant provisional licenses instead. JNS readers are encouraged to fill in more details, but the gist of it is that a provisional license involves a much less rigorous inspection, with the promise by the landlord that the property will be brought into full compliance within an agreed-upon time frame (usually a year).

In many instances, I'd see maybe ten or more provisional licenses all granted on the same day to the same landlord. Many months after the provisional license was in place, the properties that had them appeared to have little or no work done to be brought into compliance. Even if that did happen as agreed, it was clear that at least the bad apples were taking advantage of the system to avoid maintenance on their properties for as long as possible. Doing so almost certainly allowed them to spend money on even more acquisitions - with perhaps even more provisional licenses.

As you can see from this picture, I was deep in thought about this particular problem. Whoops! Wrong link. I was deep in thought...well, you're just going to have to take my word that I was thinking about serious things.

Like what to do about all these provisional rental licenses. Here's what we DON'T want: we don't want a system so cumbersome that landlords opt to just fly under the radar and rent without getting licenses; there's enough of that already. And we don't want a system that causes delays that are so long that very few people actually want to be landlords in Minneapolis. But yet by granting huge numbers of provisional licenses, it gives slumlords a tool they can and will use to buy even more properties without making repairs.

So what if we put a cap on how many outstanding provisional rental licenses a landlord could have? Let's just say ten at a time, although I'd like to see it close to five if possible. Once a landlord gets a total of ten provisionals, he or she has to bring ALL properties up to full compliance before any additional provisional rental licenses can be granted. Or at least the oldest provisional license must be brought into compliance before a new one is granted.

I believe that if such a policy were implemented correctly, we'd see two things: properties would be brought into full compliance faster, and at least some slumlords would acquire properties more slowly.

So what do JNS readers think? Does this idea bear looking into? Are there other ways we can approach dealing with slumlords?


MeganG. said...

Hawkman, you should email your thoughts and proposals around this subject to the councilmembers on the regulatory services committee.

It's too important to just let this sit here for them to find on their own.

Don is on the committee still, althought not chair anymore.

I forget who is chair now. Diane?

Kevin said...

Slightly off topic....

Our block club's problems were not centered around multiple licenses to one owner, but nevertheless, they caused us a lot of grief. It may be the case where the flaws we saw with the system were fixed, but since you brought this topic up, here are a couple of other considerations you may want to take into account.

First, there needs to be a better system for identifying rental properties with no provisional license in the first place and there needs to be meaningful penalties when these properties are identified. Rental properties are businesses and I find it difficult to believe the owners of these properties do not realize they have to have a license to operate a business in the City of Mpls.

All four of the properties I identified had outstanding inspection orders, had been operating as rental properties for over a year to several years and yet no one at the city seemed aware they were rental properties in need of a rental license in the first place. Once I reported them as such, it appeared the owners simply paid the license fee and were granted their provisional license. The licensing fee may have been doubled (I was unclear about that), but that still seems like an insignificant slap on the wrist for operating a business with no license.

All of these properties were ongoing problem properties and had generated a significant number of 911 calls while operating without a rental license. It would seem to make sense to take into account the documented history of a property before a provisional license is
granted. In other words, why grant a rental license to a property you already know is a problem property? I realize it's more work up-front for inspections, but think of how much work it takes to get a rental license revoked.

Anonymous said...

I think the chair is CM Elizabeth Glidden of the 8th ward.

Anonymous said...

If you want the gremlins in your head to start dancing, take a look at the city's rental license application and then randomly look up any other license application, such as a grocery store license, a liquor license or (this is great) a juke box license. Seriously. The amount of inforation required to obtain a juke box license in this city is more rigorous than the rental license application.

We need more push from residents on this one than just writing up a proposal. What I have been told by my neighborhood association is that the city ordinance needs to be changed if anything relating to rental licenses is going to get changed. So, people, start agitating for changes in the ordinances pertaining to rental licenses. This is one issue that is about 10 years overdue.