In March 2002, professor Edward Goetz presented survey data that showed minority union tenants paid, on average, more than three times the amount of renting application fees as white tenants with the same income.
This data is now being used by supporters of the new rental application-fee ordinance in Minneapolis, which goes into effect today.
The new ordinance protects tenants from being taken advantage of and discriminated against, said Alan Dale, a Minnesota Tenants Union advocate.
“We think this is a huge step for tenants, because it sets a standard for the use of application fees,” he said.
Landlords typically request applicants to submit an application fee to run credit and background checks.
The ordinance mandates that landlords clearly disclose their application criteria to the applicants. If the landlord rejects the applications for reasons not in the criteria or they do not run the background and credit checks, they must return the fee to the applicants.
The ordinance also sets a system to issue citations and threaten rental licenses to landlords who violate the policy.
Previously, tenants were unaware of how their money was used, Dale said.
Many people who apply for apartments do not know how landlords choose tenants or how they use application fees, Dale said.
“There was no standard use for the money,” he said. “People would apply and have no clue what would happen to their money.”
Kate Suchomel, Minnesota Public Interest Research Group program director, said the group supported the ordinance and the changes will help students when they are looking for housing.
“I think it will make the process easier for students in that they won’t have to worry about large fees when they are applying,” she said. “It will protect students when they go to search for housing, because students are first-time renters who are often taken advantage of.”
In the original version of the ordinance, Gary Schiff, Minneapolis City Council member, Ward 9, proposed a $25 cap on the application fee. It did not make it on the final version.
Paul Zerby, Ward 2, who represents the Minneapolis campus and surrounding areas, said he originally supported the fee cap but saw why renters were concerned.
“There were a couple problems with that because if the fees didn’t cover the landlord’s cost for using an agency, it seems to violate a state statute,” he said.
Gordon Kepner, a Marcy- Holmes area landlord, said the ordinance will not affect him, because he does not charge an application fee.
“Quite a few small landlords don’t use the credit check,” he said.
Kepner said he uses references rather than background checks when picking applicants.
Bill Dane, staff attorney for University Student Legal Service, said many students come in with concerns about housing but not application fees.
“This is not as big a problem, and part of that is due to the fact that we have a surplus of housing, so landlords are less likely to intimidate or turn down potential tenants,” he said.
Zerby said the ordinance will save students money when they are moving in and out of apartments.
“This will allow the students who are applying to know what the deal is,” he said. “It will stop landlords from picking up fees from many students, pocketing it and running the checks on just one applicant.”
