The ordinance, branded as the S.A.F.E. Housing Tenant Protections, limits the ability of landlords to consider evictions, credit histories and criminal histories when screening applicants for housing.
It also limits how much money they can require of new tenants and forces landlords to give a written explanation when they decide not to renew a lease.
Two weeks before the ordinance went into effect March 1, a group of landlords sued the city in federal court and asked for a preliminary injunction to stop its enforcement.
The landlords argue the rules force them to consider applicants they would have rejected and prevent them from removing tenants from their properties.
U.S. District Judge Paul Magnuson granted the injunction on Monday, writing that it’s likely the landlords ultimately will win the case. The ordinance likely is unconstitutional in two ways, the judge wrote.
First, the landlords argued that it violates the Fifth Amendment, which prohibits government from taking private property for public use without fair compensation.
“Plaintiffs claim that the ordinance operates as a per se taking because it singles out private landlords to ‘address a perceived, though vaguely identified, societal problem’ related to housing needs. The Court agrees,” Magnuson wrote.
Second, the landlords said the ordinance violates their 14th Amendment right to exclude people from their properties without due process.
Finding that “the right to exclude others from one’s property is fundamental,” Magnuson wrote that the ordinance fails to show that their criminal records or poor credit scores are preventing St. Paul residents from accessing housing they otherwise could have afforded.
The ordinance, approved by the City Council in July on a 7-0 vote, says there’s a lack of affordable housing in the city and cites income and incarceration statistics that suggest it’s especially difficult for African-American residents to find and keep a place to rent.
However, the ordinance fails to show that the new rules will accomplish the city’s housing objectives, Magnuson wrote.
Expounding on the Fifth Amendment argument, Magnuson wrote that the ordinance also puts landlords at significant financial risk.
“Undoubtedly this ordinance comes at a heavy cost for owners because the screening criteria mandates, for example, that they rent to tenants with less stable financial situations, prohibits owners from collecting additional upfront funds to mitigate risk of rent nonpayment, and permits tenants who are repeatedly late with rent payments to renew their lease indefinitely,” he wrote.
“The ordinance forces Plaintiffs to bear society’s burden related to housing needs.”
The Minnesota Multi Housing Association, which is not a party to the lawsuit, said the ruling affirms many of the objections it’s raised both in St. Paul and in Minneapolis, which has similar renter protections.
“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 St. Paul to work with our members, particularly the plaintiffs, to find effective solutions,” it said in a statement.
St. Paul City Attorney Lyndsey Olson called the judge’s ruling disappointing.
“The City will abide by the Court’s preliminary injunction while the legal claims are addressed by the courts,” she said by email. “While we are 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.”