Constitutionality of SAFE Housing law is called into question.

Saint Paul’s new tenant protection ordinance has been put on hold. U.S. District Court Judge Paul Magnuson ordered city officials on April 19 to stop enforcing the SAFE Housing ordinance until a lawsuit filed by a group of landlords has been settled. Magnuson agreed with the landlords that part of the ordinance may be unconstitutional. He thought it likely that their lawsuit will prevail.

The ordinance, which was adopted last July in a unanimous vote of the City Council, limits to one month’s rent the amount that can be charged for a security deposit and includes a “just cause” provision that limits the conditions under which a landlord may terminate a lease.

The ordinance limits the use of credit histories and criminal records in screening prospective tenants, and changes how past evictions are considered when a rental application is reviewed. Tenants cannot be denied a lease if they had a misdemeanor more than three years before or a felony more than seven years before. Tenants could still be turned down if they had been convicted of murder, distributing or manufacturing controlled substances, arson, kidnapping, assault, robbery, manslaughter or criminal sexual conduct, or if they are on the lifetime sexual offender registry.

Judge Magnuson agreed with the landlords’ Fifth Amendment concerns. That amendment prevents the government from taking private property for public use without fair compensation.

The ordinance took effect on March 1 and the landlord group filed suit in mid-February. In addition to their constitutional challenges, the landlords said the ordinance would greatly add to their costs for unpaid rent, property damage and court fees, and through its limits on tenant screening could put their other tenants at risk.

Magnuson agreed with the landlords’ Fifth Amendment concerns. That amendment prevents the government from taking private property for public use without fair compensation. “Undoubtedly this ordinance comes at a heavy cost for owners,” he said. “The screening criteria mandates, for example, that landlords rent to tenants with less stable financial situations, prohibits them from collecting additional upfront funds to mitigate the risk of rent nonpayment, and permits tenants who are repeatedly late with rent payments to renew their lease indefinitely.”

Magnuson also agreed with the landlords’ claim that the ordinance operates as an unfair taking of property “because it singles out landlords to address a perceived, though vaguely identified, societal problem related to housing needs.”

 

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Another constitutional argument the judge supported centered on the 14th Amendment, which allows people to exclude others from their properties without due process. Magnuson wrote that the right to exclude others from one’s property is “fundamental,” and that there is “no compelling governmental interest” to deny them that right. Magnuson criticized the ordinance for lacking clarity in how it will help the city accomplish its housing goals. He said the city also failed to show how criminal records or poor credit scores are preventing Saint Paul residents from being able to find housing.

“While we’re disappointed that this means the status quo will persist as this process plays out, the city will continue our efforts to respond to the many impacts of this enduring housing crisis in our community,” said Saint Paul City Attorney Lyndsey Olson in a statement.

The City Council brought the ordinance forward in early 2020 after a series of public meetings. Housing advocates and elected officials contended the city needed to limit how landlords use a prospective tenant’s criminal record, rental history and credit scores when vetting rental applications. Housing advocates contended that some landlords used the rental application process to keep low-income people and people of color out of their buildings.

“While we’re disappointed that this means the status quo will persist as this process plays out, the city will continue our efforts to respond to the many impacts of this enduring housing crisis in our community,” said Saint Paul City Attorney Lyndsey Olson in a statement.

The plaintiffs include Lamplighter Village Apartments, 1023 Grand Avenue LLC, 1708 and 1712 Grand Avenue LLC, 1947 Grand Avenue LLC, 231 Dayton Avenue LLC, 707 and 711 Grand Avenue LLC, Alton-SHN LLC, Alton-NFLP LLC, Alton-HRG LLC, Highland Ridge LLLP, Lucas Goring, Madison LLC, Minnehaha Avenue Apartments LLC, Oaks Union Depot LLC, Oxford Apartments LLC, Plaza LLLP, Rockwood Place LP, Wellington-NFLP, Wellington-PFP LLC, Wellington-SHN LLC, Woodstone Limited Partnership, and Chue Kue and Yea Thao.

The Minnesota Multi Housing Association, which is not a party to the lawsuit, is following the case closely. It issued this statement: “The shared view of the Minnesota Multi Housing Association and other advocates is that we need more housing. These types of regulations do not solve that problem, but discourage investment in additional housing in our communities. We call on leaders in Saint Paul to work with our members, particularly the plaintiffs, to find effective solutions.”

— Jane McClure

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