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?