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I fail to see what the big deal is here. While I don't agree with the proposal on the credit score, the parts that would prevent landlords from denying tenants based on what happened 2-5 years ago seems to be a rather reasonable mechanism to make sure that those who have dealt with those issues are not permanently pushed out of the market, while simultaneously giving a enough of a buffer that landlords can be reasonably sure that they will not suffer the same issue.
Credit score is the main thing I worry about, although I am not in Minneapolis. If rents go up in Mpls, they go up where I am at.
Credit score is the number one predictor of tenant quality, bar none. It is ONLY controlled by the tenant, and they have 100% control over it. It is not based on any protected class, income or other subjective criteria.
If Minneapolis goes higher, so do the surrounding areas. I would love to get a few hundred more each month, from each tenant. Most of my tenants can afford it, as I rent to solid people with solid incomes.
So, you would be raising rent because you have the impression that "your tenants can afford it?" Just out of curiosity, how do you know what other expenses or financial obligations these tenants have?
The most important question is whether or not you will be offering any improvements or increased value for the increased rent?
So, you would be raising rent because you have the impression that "your tenants can afford it?" Just out of curiosity, how do you know what other expenses or financial obligations these tenants have?
The most important question is whether or not you will be offering any improvements or increased value for the increased rent?
It is not my job to know what other expenses or financial obligations these tenants have. My job is to price rentals at market prices. By definition, if I get the quality of tenants I want, at the price I have listed, that is market price. The quality of the unit (i.e. value) is reflected in the price.
When a tenant first moves in, I make sure they have the ability to pay rent, as evidenced by them paying no more than 30% of their income in rent.
I also make sure that they have the desire to pay rent, as evidenced by their 625+ credit score.
And just in case, I get a large deposit.
I do not have places in Minneapolis. If the proposed rule becomes law, I will be able to increase my prices. Lower quality tenants will flock to Minneapolis, forcing the better tenants to move where they can be sure their neighbors are screened. That will increase prices. As more and more $15 an hour jobs are available, rents go up as well.
.........Just out of curiosity, how do you know what other expenses or financial obligations these tenants have?.........
Well, for a start, all of those financial obligations are on the credit report. And the landlord has eyes to see brand new cars and brand new 72 inch TV's. Tenants generally tell me if they are getting a divorce or their kid has started college or went into the hospital.
But the tenant's income doesn't have anything to do with it, unless the applicant doesn't have enough income to pay the rent.
I've had tenants who made 10 times the rent. That doesn't mean I can raise their rent. If I raise their rent to what they can afford, they just move to another rental where the landlord is more reasonable.
Rents are set by the market, not by the tenant's income. (except in subsidized housing)
This is not a law in Minneapolis, it is under review. Further, in the other thread, you claimed it to be a Minnesota law, and this is a city/county proposal.
Anyways, it's going to get struck down. There's no way they can force landlords to adhere to this ordinance.
Minneapolis has passed the ordinance.
Quote:
Those include capping security deposits at one month's rent, stopping the use of credit scores, and cutting back on landlords' ability to reject applicants because of criminal history or prior evictions.
c. If a landlord uses a minimum income test requiring an income equal to three (3) times the rent or
higher, the landlord must allow an exception to that test where the applicant can demonstrate a history
of successful rent payment with an income less than three (3) times the rent.
Oh wow, talk about something that seems designed to increase housing opportunities for less-advantaged people but will have the exact opposite effect! If you make it more difficult to be a landlord, it causes two effects: some number of the good ones will get out of the business, and the relative proportion of the shady ones will increase. Housing is pretty much a matter of supply and demand, and when the demand is high, decreasing the supply (as this ordinance seems destined to do) will only make things worse.
Quote:
Originally Posted by Electrician4you
I don’t think you understand how much a drop in supply will affect the demand. Look at California. A few years ago we thought rents couldn’t go much higher. House prices couldn’t go much higher. Yet they did. Quite a bit. Rents in my area have gone up 25-30% in the last three years. My costs have skyrocketed. And I’m still charging about 10% less than going rate. But even I had to raise my prices. I’m not in th3 business of charity or subsidizing.
I had to raise rents on my tenants. A handyman out here charges $30 a hour. And drive time. Basically 2-2.5 hours minimum. So you’re not getting anything fixed for less than $80 plus parts.
Most trades are at 120 a hour. I had to have some painting done in one room and it cost $400.
People think that LL just sit back and rake in the cash.
Yup, I'm also in CA and it is the poster child for demand/supply imbalance in almost every city of any size. The working poor simply cannot afford a place to live and landlords, as Electrician points out, have to charge rents that will cover their expenses. The result is the increase in the number of people, including families, living on the streets or in their cars.
The answer is for local governments to subsidize the building and maintenance of affordable housing (i.e., increase the supply), not to impose unworkable regulations on landlords. I am, thankfully, no longer a landlord. When I was I charged my tenants slightly below-market rent because they were model tenants and I didn't want to lose them. If faced with an ordinance like this, I simply would have sold the property.
The answer is for local governments to subsidize the building and maintenance of affordable housing (i.e., increase the supply), not to impose unworkable regulations on landlords. I am, thankfully, no longer a landlord. When I was I charged my tenants slightly below-market rent because they were model tenants and I didn't want to lose them. If faced with an ordinance like this, I simply would have sold the property.
I think if the Government got OUT of subsidizing rents, the rents would fall.
With this ordinance, property values will fall. Expenses will go up, profits will go down, and that reduces the value of the property.
Rents cannot go up more than the market will pay. Units may go off the market, and that may reduce supply.
I think the largest and fastest change will be the migration of quality renters out of Minneapolis.
There is a group in Idaho that wants these same regulations and even more onerous ones. They are starting with appeals to the City Council for rules that seem reasonable to reasonable people. Their ultimate goal, however, is to create a very landlord hostile environment.
I have screen shots of the conversation and can tell you, they absolutely do not want fairness on both sides.
There is a group in Idaho that wants these same regulations and even more onerous ones. They are starting with appeals to the City Council for rules that seem reasonable to reasonable people. Their ultimate goal, however, is to create a very landlord hostile environment.
I have screen shots of the conversation and can tell you, they absolutely do not want fairness on both sides.
I think the goal is that anyone can live anywhere. That way, neighborhoods are not segregated by income, and crime is evenly distributed across all neighborhoods.
Probably government housing for all is on the plan. Identical housing for all. If you are rich enough to afford a better neighborhood, the government takes that money away.
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I am hoping this doesn't spread to the rest of the midwest.
