Sunday, May 23, 2010

When Investors Buy Up the Neighborhood - A Policy Link Discussion

Post and photo of a Danna D III Hawthorne property by the Hawthorne Hawkman

Earlier this month, people from all across Minneapolis who work on housing issues got together at the McKnight Foundation to discuss the PolicyLink report "When Investors Buy Up the Neighborhood." On JNS, we covered one potential solution discussed, namely the need to be able to search city websites using the name of a property owner.

The report itself is about 45 pages and for wonks like myself it remains an engaging read. But today I want to focus on the small group discussions where we hashed out some ideas for how to help turn things around. One of the first issues that was raised was...

...the need to change the Non-homestead tax back to the rates used ten years ago or more. These changes made the difference in cost for homesteaded and non-homesteaded property taxes almost minimal. The intention was to drive down costs to landlords so that they could then offer cheaper rent to their tenants. One of the unintended side effects was to facilitate a financial model in which houses that would otherwise have remained owner-occupied were now run by landlords.

Many housing experts present felt that the lower-income renters were not seeing the trickle-down benefits of such a move, and communities like north Minneapolis or east Saint Paul were encountering landlords who were buying up dozens of properties with ease.

We recognized that having a simplistic "pass/fail" system for our landlords and investors results in scenarios where too many people get a D-. And we discussed ways to create incentives that would spur better landlord behavior. Some ideas included:

- a mandatory landlord training class (this by itself, I think, would not be very effective. Combine it with other efforts, and perhaps we could see some results.)

- Increase rental licensing fees significantly, but then create incentives that reduce them over time. For instance, double the fee, but make the second half of it due after a year. If the landlord completes training and has no code violations or other problems (or at least limited and minor issues) with the property, then the fee could be waived or reduced.

- set limits on how many LLC's one person can have as property owning entities within the city. One city employee mentioned a person who has over 80 individual LLC's for the properties he owns.

- While we're on the topic of needing better city databases and websites, we should also try and incorporate apps from iPhones, Droids, Blackberries, and other smart phones into how we track problem properties and share data. (I'm the wrong person to expand more on this, although I love the idea. I had my Blackberry for a year and a half before figuring out that the plus and minus buttons on the side were there to zoom the camera back and forth. My twin brother, on the other hand, has custom-installed several different operating systems on his cell phone simultaneously. Ask him.)

- In Collier County, Florida, housing violations are emailed out, resulting in quicker response times from property owners.

- Atlanta trains its residents to do certain kinds of inspections.

- Minneapolis has an Early Warning System to try and predict when properties will be in need of attention. That data should be expanded and at least the public data contained therein should be available and searchable to the general public.

- And of course, my personal favorite still remains good old Allentown, Pennsylvania, which publishes a landlord hall of shame on their own website.

Have at it, JNS readers. What policies would you like to see in place as a way to prevent slumlords and other unscrupulous investors from buying up the neighborhood?


Dragon Master James said...

How about we make it VERY easy for a landlord to evict a tenant. Currently it takes about 3 weeks for a straight forward non-payment type eviction. For evictions due to behavior, nusciences etc it can take weeks and even then the court tends to give tenants slack. This creates a disincentive for landlords to even bother trying to evict for neighborhood livability reasons. Since many are on assistance the non-payment eviction is not common for tenants who behave badly and know they are on thin ice.

Anonymous said...

I read the entire report and make correlations that don't make sense. It sumizes that the answer is to lower property tax base by creating more vacant lots while looking to give-a-way programs to come to the rescue. In some cases the report cites $25,000 of free monies (or access to). This straw foundation is not something to build a neighborhood. everyone knows there has to be privatized investment to make thing fly. The report is garbage and is self motivated by its authors.

Show Lin Chung said...

How about we have immediate neighbors approve a six month renewal of all Section 8 vouchers. This way if the landlors isn't evicting a trouble tenant the voucher can be pulled if a neighborhod won't approve it.

Anonymous said...

Dragon Master, City inspections needs to cite tenants. In many cases there are instances whereas State law mandates a tenant is cited yet the landlord continues to be the victim.


Subd. 3.Occupant's duties. The occupant of each dwelling unit in a multifamily dwelling in which an approved and operational carbon monoxide alarm has been provided and installed by the owner must:
(1) keep and maintain the device in good repair; and

(2) replace any device that is stolen, removed, missing, or rendered inoperable during the occupancy of the dwelling unit.

In addition to inspectors writing citations to the wrong party, we have people door knocking and convincing people to take out the batteries in CO and Smoke detectors and asking them to call inspections.

When the landlord attempts to kick them out, they cannot because the tenants cry retaliation.

The inspectors need to get their heads on straight and start using some common sense. Additionally, people should stop calling the City and creating issues rather than reporting them.

Patrick said...

We should force all rental properties to be managed by a property management company. This would ensure that all rental properties in Minneapolis are actively managed. No more do it yourself landlording.

Patrick said...

How about making the rental license fee equal to 25% of the purchase price of the home. Then the landlord would be forced to recoup that through higher rents which should bring in a higher quality tenant to the neighborhood.

Hans said...

How about making it illegal to convert a porch to a bedroom.... or slice and dice a single family home into a 2 unit.

When I was shopping for houses I was disappointed at the number of beautiful homes that have been destroyed by converting them into duplexes. I know affordable rentals are necessary but with all the vacant duplexes in Nomi I don't see why any more single family homes should be converted.

Anonymous said...

Another idea is to educate renters on how to care for a house. I believe many are used to apartment living but living in, and caring for a house is quite different.

Like the sofa and trash can don't belong in the front yard, don't leave the windows open in the winter time, and don't put toys down the toilet. Cut the grass every week. Pick up the litter in front of your house. Those sorts of things that my renter neighbors apparently were never taught or had modeled for them by parents, like I did.

Anonymous said...

Why don't we just make most of North Minneapolis zoned for owner occupied use only? Push the slumlords out to the suburbs.

Anonymous said...

Do away with provisional rental licenses. Landlords are given provisional rental licenses before a full inspection takes place (supposedly with a minimal inspection). I know of properties where the provisional licence was granted without any inspection at all. I think this was more widespread than the inspections department wants to admit. The inspections department must catch up and keep caught up.

Require more information on the rental license application. If a property is held by a company, then every owner of the company must be identifed by name, address and telephone number. If the company ownership changes, then an amendment to the license must be filed with updated information. No hiding behind a management company, although if a management company is invovled, that should be on the application as well.

Stay in touch with the community. If the city makes it more expensive/difficult to get a rental license the result will initially be more unlicesed rental. The first time I audited the properties in my area (4 blocks around my house), I was surprised how many properties were being rented without any kind of license. This can and likely will happen again if care is not taken.


Anonymous said...

How about we license tenants as well. Have the city inspectors review the "performance" of the tenant. Make the landlord provide payment history and have the neighbors submit a satisfaction survey. If the tenant fails the city inspection they must move.

Megan G said...

Require all landlords to watch the Joe Pecci movie "The Super".

Anonymous said...

Require that all neighborhood associations approve every sale of property and determine it's post-sale purpose. This would allow landlords to come before the association and state their case, provide credentials and financials before beign approved to purchase a property.

Janice simpson said...

Donkeys may not be kept in bathtubs.
Gang signs are required to be written in English.
All citizens must own a rake.
If you want to read your favorite book in public to your friends, do it before 2:45 AM.
It is illegal to sell two beers are once for a single price. For example, a bar can’t run a 2 Bud Lights for $5 special.
Persons under the age of 16 may not play pinball after 11:00 PM.
On Mondays, it is illegal for one to whistle very loud after 11:00 PM.

The Hawthorne Hawkman said...

Anon 11:48, that's a preposterous idea.

Anonymous said...

How about we have the same rules for owner occupied properties and require owner occupied properties to be licensed and take classes


We let the free market (supply vs. Demand take care of it like the rest of the world.

There are no short cuts to letting the market eventually win out no matter what you try to do.

BTW - provisional licenses are not starter licenses. They are a trick to keep the cities foot in the door so they can come back and harass the tenant and owner at any time. A few years ago, you could not even get a real license without it being an extreme case.

Anonymous said...

How about we have the neighbors approve what type and color car is parked in the drive to?

Let start a committee up for that one right away.

I'm not Patrick said...

It's hard to tell who is trolling this blog, since so many of the revitalizers hold opinions that are just about as crazy as the trolls.

MeganG. said...

I'm so flattered someone wants to be me.

I can't thank my fans enough for the ego-boost they have all given me lately.

I'm truly, truly glad you all think I'm such an important and influential person! Especially now to impersonate me!

Kisses to you all!

(ps, if you really want to impersonate me you will notice I NEVER put a space between Megan and G)

Ranty said...

I disagree with the idea of increasing rental licensing fees because I believe that it will only serve to encourage unlicensed rental.

However, incentives such as lowering the fee over time for "good behavior" as it were, might work.

I want to be clear that I believe there is a place for rental in every community, and also that there are many, many good (and some GREAT) landlords.

The problem we have in NoMi (and in some parts of SoMi as well) is -in my view- totally related to the stigma of the area. There is a real sense by many people that this is the place you come to do whatever the hell you want, including buying up shitty properties and renting them out to whoever happens to possess a section 8 voucher, without bothering to care for the property.

I have heard this not only from long-term investors but also from friends and associates who live out in the suburbs. (Of course I scold the latter roundly and explain why this is not okay, but still people say these things to me...)

This is why the re-branding of our community is so important to me. It is not about kicking landlords out or forcing people to put signs in their yards and plant flowers while eating granola.

It is about changing the perception of our community, both inside and out, so that the name is no longer synonymous with dumping-ground.

Patrick said...


I know just how you feel. Have you noticed that there are "Patrick's" showing up all over. I can't count how many times people have impersonated me on this blog and on other sites which relate to NoMi.

I guess it's just a sign of how influential we are ;-)

Anonymous said...

It would help everybody if the commonly spoofed authors would use google identities. It's really annoying to not know whether a comment by Patrick is sarcastic or serious. It almost makes reading your comments pointless.

NoMi Passenger said...

@Anon 1015pm - the comments from Patrick are ALWAYS made up. Patrick is a made up voice along with lots of other "personalities" that have appeared on JNS in the past few months.

See, the deal is there are a handful of people who would like to see JNS gone, but since they can't manage that they figure they will just do what they can to change it, alter it, influence it, counteract it, etc.

These are folks who can't use their real name because around the northside and around the city they have a bad reputation for something, whatever their thing might be: mortgage fraud, mishandling grant money, filing frivolous law suits and restraining orders, being a nasty slumlord and a parasitic real estate mogul, suing people illegally, being a koo-koo-klock koolaid kult member, etc - they can't use their real name so they make up fake names and leave ridiculous comments.

It's actually pretty interesting to watch them fight and resist so hard against everything they don't want to happen meaning revitalization, a public forum to air out issues, a gathering spot for revitalizers to discuss and plan and coordinate and share, etc.

The Hawthorne Hawkman said...

Comments believed to be coming from a troll have been consistently rejected. Essentially, this person is claiming that Megan is criticizing anonymous commenters for getting in our business when "getting in other people's business is what this blog is all about."

First, Megan criticized people for co-opting her identity, and then for hiding behind anonymous identities because such people have no credibility if their real identities were used.

Furthermore, this blog is all about the efforts of people who are doing everything they can to make NoMi a better place. Based on the inaccuracy of what the rejected anonymous commenter alleges and the tone and language used, further comments of that nature will not be approved.

Here's where Megan and I disagree, though. If slumlord A were to read a JNS post and honestly think, "I disagree and I think that my housing in the condition shown on this post serves an actual need for poor people," that would be a substantive (although I think wrong) view.

Slumlord A might further think, "I want to refute this point of view, but if I use my real name then JNS readers may immediately discredit what I'm articulating." That might lead this person to post a comment under a pseudonym - like Shamika, Dontrelle, Patrick, etc.

I think such a tactic is substantive, as long as the commenter sticks to the issue at hand. What we're seeing quite a bit of is both knee-jerk comments that oppose almost anything that gets posted, comments that make personal attacks towards anyone associated with JNS, and comments with language and/or information included that make it clear they are coming from known trolls.

I actually would like to approve comments under the first scenario, if they're substantive. Under the second, such comments will be rejected.

la_vie_en_rose said...

koo-koo-klock koolaid kult member

Usually the "Kool-Aid drinking" statements are saved by Republicans/conservatives for the Democratic/liberal crowd. Are you referring to them or are you poking fun at actual cults? Just out of curiosity because I'm somewhat of a liberal.

So Called Troll said...

I have had comments rejected in the past and I am not anyone you know or even care about for that matter.

Jeff, it is nice that you open to posting comments with counter points,it appears however, that you are not the one who always gets the last say so for approving comments. The others running the site appear to reject anything and everything with a counter point and are cited as trolls (if at all).

While following along and reading other comments, I am deducing that being a troll sounds like a good thing.

On a side note - who cares if there are personal attacks, the previously posted stories over the last 2 years attack people on a regular basis. What is good for the goose is good for the gander.

Why don't you all knock it off and talk about real issues like youth violence problems. Summer is coming round and we are on record pace for homicides. But I suppose phone books are a more important issue to bicker over.