How a flooded north side apartment is challenging Minneapolis' renter ordinance

CATHY WURZER: A 2020 Minneapolis City ordinance is being put to the test after a flood at a large apartment building on the North Side. The ordinance was intended to protect the health and safety of renters, but months after the flood, the city is still locked in disagreements with the building owner. Kyle Stokes is a reporter for minnpost.com. He's been following the case. Hey, Kyle. Welcome. Hi, Kyle. You with us?

KYLE STOKES: I'm here. How's it going?

CATHY WURZER: Hi. There you go. You seem to be having some tech problems today on this program. Say, for folks who are not familiar with the story, take us back to December 22 if you would. What do we know about the flood at the Bell Lofts?

KYLE STOKES: Yeah, a really heart-wrenching story that took place three days after Christmas last December, and so December '22. This is a 25-unit apartment building in North Minneapolis just off of 21st and Bryant Avenue North. And so a pipe burst. People I talked to said it happened around 9 o'clock at night. And when you think of a building flooding, I sort of picture creeping water trickling down over everything. This was like a creek rushing through the hallways of this building. Displaced, put out on the sidewalk the residents of this 25-unit building.

And so there was this emergency effort to make sure that these families didn't have to spend the night out in the cold. They went out into hotels. And so the building's owner said that he sprung into action to get some of these hotel rooms. Philanthropies stepped up, and then also local charities, including this one in particular, It Takes a Village in North Minneapolis, that got to work to work with these tenants. And they've been tracking them ever since, trying to get them rehoused.

CATHY WURZER: Wow, what a mess. What was the cause of the flood?

KYLE STOKES: Well, so the building's owner contends that it was an act of nature. But I think that the tenants of the building say that there have been a lot of problems with maintenance in the building, bugs and other issues. And city inspectors had also cited the building dozens of times in the past, including in the brief time that the current owner had owned the building, about two dozen times, and then another 100 times in the decade before he owned the building. So this was a building that had a long history of maintenance troubles. And so while there's probably some disagreement about whether this was an act of nature or whether this was the result of lax maintenance, this is a building that the city has had its eye on for some time.

CATHY WURZER: Has the city condemned the building?

KYLE STOKES: The city has condemned the building.

CATHY WURZER: So how does the ordinance fit into this?

KYLE STOKES: Yeah, so in Minneapolis-- and there are other cities that have similar ordinance, including Saint Paul-- if you are a renter in a building that gets condemned or where the landlord loses their rental license or you're supposed to vacate the building because the landlord wasn't supposed to be renting out this unit in the first place, for instance, the city has an ordinance that requires the landlord to pay the renter who's displaced, pay them the equivalent of three month's rent. So the idea is that that's about the cost of moving expenses at a new place-- first month's rent, last month's rent, plus a security deposit.

And what Minneapolis also does is the city has a fund that actually backs this up so that it isn't contingent on just whether the landlord actually pays up. The city can cut a check to the tenants and make sure that they are rehoused as quickly as possible, and then the landlord would pay back the city through-- either pay the tenants directly, or they could-- the city could assess a special assessment on the property owner's taxes to try and recoup this money, the idea being this is a way the city doesn't have to worry about strictly enforcing its codes and hold property owners responsible and also ensure that renters are rehoused as quickly as possible.

CATHY WURZER: OK. So I'm sensing that this has not happened, or at least has not happened to the satisfaction of residents.

KYLE STOKES: Well, so the residents have been paid. So the good news here is that the residents have received their security deposits. They received checks cut directly from the city of Minneapolis. And according to the folks at It Takes a Village, this non-profit I mentioned, most of them are now rehoused. 19 of the 22 families that received this assistance now have permanent housing again.

The problem is that there is a disagreement with the city about whether the landlord actually owed this rental assistance in the first place because, as we just walked through, the property owner believes that this was an act of nature and that the city cannot hold him responsible for the burst pipe in this building that displaced these families. This is just something that happens in buildings. And now, the property owner did not respond to my requests for comment. I'm not sure exactly what his argument is. This is something that I know that he has argued in a statement publicly.

But the city essentially decided we're going to dip into this fund. We're going to pay out to these tenants and settle with the landlord, basically in an effort to ensure that the tenants get something and that the city gets some compensation for that. So the city settled with the landlord not for three month's rent but just for one month's rent plus some other provisions. The landlord appears to have paid out security deposits to all tenants, but he has yet to refill that city fund that can be used to pay tenants. As of last check with the city, he hasn't delivered the payment to the city. So it sort of gets to some of the messiness that's involved with these cases.

CATHY WURZER: Does it sound as if both sides are going to go to court over this?

KYLE STOKES: Well, I'm not sure about that at this point. The idea of the settlement was to try and avoid an appeals process and try and tie off this case quickly. The city now is waiting for this check. And when I asked, they did not respond to questions about whether they're going to try and collect payment from this landlord. Both sides inked a settlement, so what the next steps are in terms of compliance with the settlement are not yet clear.

But the idea was to try and avoid litigation over this. And it seems like this case-- despite the city's attempts to tie it off and come to a speedy conclusion, the case is still open and unresolved, at least in terms of this payment that the city has. And the city's fund is a little bit short of-- the Relocation Assistance Fund is short of money because of this issue.

CATHY WURZER: Sounds like the ordinance has worked to an extent, though.

KYLE STOKES: I think you could say it has. The tenants were paid out quickly. The question, though, is that I-- frankly, I don't know that I still feel like I have a lot of questions left about-- when this happens-- the thing about this particular instance is that it is the largest building that the city has had to invoke this ordinance on, so 25 units, 22 people that applied for this assistance. In the past, it's all been singles and duplex units that have been benefiting from this ordinance requiring relocation assistance.

So when a property owner is hit with a condemnation, does the city have the funds to back up their actions to enforce the city's housing code, displace tenants, and get them rehoused quickly as this ordinance intends them to? The city says even if this landlord has not paid them back yet, they're not concerned about depleting the fund this year. But I still have this question and would be interested to explore this more in terms of, can the city back this up if more than one or two of these buildings is-- there's a similar issue?

CATHY WURZER: We just lost Kyle again.

KYLE STOKES: No, I'm back.

CATHY WURZER: There you are. OK. Say, before you go, what's going to happen to the building since it's been condemned?

KYLE STOKES: I'm not sure. At my visits to the building, I saw workers in there, presumably trying to rehab the building. But that's a good question, Cathy. I'm not sure exactly what happens next to this building. It's a big building with high ceilings, a lot of assets to it. Tenants that moved in were excited to move in there. But obviously, it's not habitable at the moment.

CATHY WURZER: Wow. Kyle, good reporting. Thank you so much.

KYLE STOKES: Thanks, Cathy.

CATHY WURZER: Kyle Stokes is a reporter from minnpost.com.