Minnesota landlords sue to stop eviction ban, lawmakers say it's moot

Minnesota's biggest landlord group is suing Gov. Tim Walz to force a sudden end to the state's eviction ban.

Minnesota Multi-Housing said the moratorium, which Walz implemented at the start of the COVID-19 pandemic to protect renters who had lost their jobs, was unconstitutional. Landlords said the restriction was costing them significant rental income and preventing them from evicting some problem tenants.

"That's just not fair," Cecil Smith, the group's chief executive, told reporters at the state Capitol. "Every other business has had their restrictions lifted. We need them lifted on our industry."

Within hours of the federal court filing, lawmakers in the divided state Legislature said they had reached a deal to wind down Walz's eviction ban. The phase-out would happen in three stages over 105 days, lawmakers who negotiated the agreement said.

"Once we pass that legislation, the lawsuit should be rendered moot," state Rep. Mike Howard, DFL-Richfield, said in an interview. "It does address the main concern we've heard from Minnesota Multi-Housing and landlords. They want an off-ramp, and we look forward to passing one."

The legislation, which Howard and state Sen. Rich Draheim expected to be voted on this week during a special session, would allow landlords to evict some problem tenants in July for material breaches of their lease.

In September, landlords could start evicting renters who owe back rent and don't qualify for rental assistance programs. People who have active applications for rental assistance would be protected from eviction until June 2022.

Under the legislative proposal, landlords would be required to provide 15 days' notice before starting eviction proceedings. The notice would direct tenants where to apply for rental assistance.

"The important thing is to get it through and get it done and move on," Draheim, R-Madison Lake, said in an interview.

The state's RentHelpMN.org program allows renters who meet income qualifications to get up to 15 months of back rent covered -- or 3 months of future rent.

But the federally funded program has been slow to launch. Over the first eight weeks, $4.9 million of the $375 million available has been paid out, representing 832 of the 24,525 submitted applications, said Jill Mazullo, a spokeswoman for the Minnesota Housing Finance Agency.

Lawmakers have considered the rental assistance as key to ending the eviction moratorium.

"Having a 105-day off ramp, we create the space so that Minnesotans who do owe back rent can go to RentHelpMN.org, get rental assistance, and that rental assistance goes straight to landlords," Howard said. "So that creates a win-win for renters and landlords. That’s what we’ve been after the whole time."