In early 2017 the Minneapolis City Council unanimously passed an ordinance requiring that all rental property owners in Minneapolis accept subsidy vouchers (or better knows as Minneapolis Section 8). This new ordinance goes into effect on May 1, 2018. Going forward you may not advertise “No Section 8” or refuse to accept any subsidy vouchers at the risk of being charged with a civil rights violation. You may still screen these tenants as normal. Here is a good article about the new ordinance.
A large number of landlords have sued the city trying to have this ordinance overturned, claiming that neither state nor federal laws require an owner to participate in the Housing Choice (Section 8) program. It doesn’t appear that this issue will be settled soon.
On a positive note, MPHA has recognized some issues with their program and has announced changes in the right direction to improve the program and encourage new landlords to participate. Here are some of the proposed changes (which we are unsure how some of these are going to be implemented or accessed):
- Extended the time allowed for tenants to find willing landlords from 90 days to 120 days.
- Created in partnership with the city a new Landlord Incentive Fund to take effect the same day as the Section 8 requirement. It will reimburse owners for damages outside of normal wear and tear and that exceed damage deposits.
- Crafted a $250 bonus to landlords who rent to Section 8 tenants for the first time.
- Conducted small-area rent studies with an eye toward better matching voucher reimbursements to what the market is charging. Currently a region-wide average rent is used, but some neighborhoods already exceed that average. Tiered reimbursement schedules could open those neighborhoods to Section 8 tenants.
- Forged a partnership with The Home Depot to offer discounts and rebates to landlords who are participants in the Section 8 program.
- Speeded up Section 8 inspections to shorten the time a unit is vacant.
- Provided immediate payments to landlords on the day a contract is approved and before the inspection is completed.
We will be complying with this new ordinance on May 1, but some of the other aspects will need to be sorted out over time. I recommend that if you have Minneapolis Section 8 properties, you review your advertising and procedures to confirm you are complying. You don’t want to become the subject of a civil rights violation.