Lawmakers discuss state oversight of rental housing following MPR News investigation

Some lawmakers and lobbyists in Minnesota say state intervention is needed after an MPR News investigation found inspection processes and local political pressures leave low income renters vulnerable in Greater Minnesota. 

According to the U.S. Commission on Civil Rights, Minnesota needs more than 100,000 units of housing to meet current demand. MPR News found some cities have become lenient with landlords whose buildings fail inspections because of a shortage of alternative housing options. Other cities don’t have rental inspections at all.

“There should be some sort of statewide oversight of licensing of rental properties,” said Sen. Lindsey Port, DFL-Burnsville, chair of the Housing and Homelessness Prevention Committee. She said the state could help with rental inspections, enforcement and create a database of landlords and rental housing. 

“It would likely require funding from the state because small municipalities across Minnesota can’t necessarily just take that on,” she said.

Legal aid attorneys from around the state say many low-income rental buildings have serious problems that go unrepaired for long periods of time. And because of severe housing shortages in many areas of the state, city leaders are hesitant to hold these landlords accountable. 

The investigation highlighted what happened at an affordable housing building in Bemidji that was condemned in 2023 because of structural problems that the city’s inspection system was not designed to catch.

“Losing units at this point is catastrophic in Minnesota,” said Port. “Affordable units are not built without state funding. So that is in some ways a state asset, and to know that we’re potentially losing them to disrepair feels like a real betrayal of people’s tax dollars.”

Advocates for both developers and city government warned that state regulation could be costly.

“Cities, even if they have rental housing in their communities, just do not have the resources or the property tax base to generate enough revenue to run programs” like Port proposes, said Daniel Lightfoot, a lobbyist for the League of Minnesota Cities. 

“What we’ve been thinking about in terms of our policies is, how could the state continue to be partners with communities to help with the provision of those resources, especially for those smaller communities that may not have ability to support that program on their own?” Lightfoot said.

The Minnesota Multi Housing Association advocates on behalf of developers and landlords. 

“I don’t think that there’s an inspection problem here, I do think it points to a supply problem,” said Cecil Smith, the association’s president and CEO. “We really believe competition is really good because housing providers in a competitive marketplace have to provide a great product,” he said.

Earlier this session, the Minnesota Multi Housing Association testified in support of a bipartisan package of bills designed to loosen zoning restrictions statewide, known as “Yes to Home” legislation.

Rep. Mike Howard, DFL-Richfield, the chair of the House Housing and Finance Policy Committee, supports that effort. 

He said a state and local partnership could help cities hold landlords accountable, but “it is frustrating to me that while the cities across the state are dropping the ball, they are fighting tooth and nail at the Legislature to kill legislation that would address the problem, to help us build more housing,” referencing the Yes to Home bills. 

Thosebills would make it easier to construct multi-family homes and would allow single-family homes to be built on smaller lots. Supporters say this would encourage construction of more affordable housing. But the zoning bills received pushback from suburban lawmakers, local governments and the League of Minnesota Cities, citing a preference for local control. 

Despite pushback, Rep. Spencer Igo, R-Wabana Township, said he hasn’t given up on zoning reform. In fact, he said MPR News’ investigation into the dynamic between cities and landlords has strengthened his resolve. 

“Minnesota is in a crisis and the way we fix that is by diversifying our housing stock and making it affordable again,” said Igo, the Republican chair of the House Housing Finance and Policy Committee and the co-author of a zoning reform bill. “The way to do that is to unleash our greater Minnesota communities, our metro communities, our city communities to be able to build the housing stock that people want. And by removing barriers in land use and zoning, that’s how we open the door to make that happen.”

In the coming months, lawmakers say they will consider both zoning reform and statewide oversight of rental housing to help protect low income renters in greater Minnesota. 

MPR News senior politics reporter Dana Ferguson contributed to this report.

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