Understanding Residents’ Experience with Investor Owners in North Minneapolis
A publication of the Local Data for Equitable Communities Resource Hub
Investor-owned single-family rentals have increased nationwide since the foreclosure crisis, which has caught the attention of researchers, media outlets, and advocacy organizations. Researchers have developed methods to unveil investors’ portfolios masked with a complexity of LLCs and LPs and have examined the effect of investor-owned rentals on eviction filings and code violations. Family Housing Fund, in partnership with the Center for Urban and Regional Affairs (CURA) at the University of Minnesota, an applied research center with a focus on community partnership and a partner in the National Neighborhood Indicators Partnership, (NNIP), is centering tenants’ experiences to better understand how large-portfolio investor landlords affect residents’ quality of life. Family Housing Fund and CURA surveyed tenants of single-family rentals in Minneapolis’s Northside, neighborhoods with residents who are predominantly people of color and that have a concentration of investor-owned single family rentals, using CURA’s local parcel database on Hennepin and Ramsey counties. This first survey provides a foundation for Family Housing Fund and CURA to expand the survey to obtain more responses in North Minneapolis and in other communities in the region to solidify their understanding of tenants’ experiences and to inform policies.
Partnering with Local Data and Advocacy Organizations
Family Housing Fund, an experienced community convener that has led efforts to address the housing affordability crisis, set out to understand the tenant experience across types of landlords. Family Housing Fund and CURA collaborated with Inquilinxs Unidxs por Justicia (IX), a local organizer, and the City of Minneapolis on the survey design to ensure questions reflected tenants’ experiences and informed potential policy discussions.
CURA used their parcel database to identify owners of single-family properties and connect owners across properties, creating an ownership typology based on portfolio size: micro: 1–2 properties; small: 3–10 properties; medium: 11–50 properties; and large: 51 or more properties. CURA randomly sampled addresses from this dataset and mailed a card with a survey link. IX volunteers followed up with tenants to encourage survey completion. The efforts resulted in 140 useable surveys with a response rate of 17.5 percent, which the report noted as a limitation of its findings but which does allow for comparing tenant experiences across owner types.
Tenants in Properties with Large Investor Owners Have Worse Experiences
Family Housing Fund and CURA found that tenants living in rentals owned by large investors have worse experiences than those living in rentals with micro-owners across three aspects of tenant experience: (1) landlord and property manager interactions, (2) cost of rent, and (3) housing conditions. The research found that Black and Hispanic/Latinx respondents reported higher rates of perceived discrimination and retaliation from landlords than white counterparts.
Rent increases and higher utility costs were more likely in properties with large investor owners than in properties owned by a micro-owner. Seventy-five percent of residents in homes owned by large or medium owners experienced rent increases during their tenancy, compared to 39 percent of residents in homes owned by micro-owners.
Residents in large-owner homes also generally live in worse conditions. Seventy and 67 percent of respondents in micro-owner and small-owner homes, respectively, answered that most needed repairs were finished, while only 32 percent and 37 percent of tenants in large- and medium-owner homes thought repairs were complete. CURA also linked the surveyed properties with City of Minneapolis data on code violations and found that more violations were issued in homes owned by large investor owners.
Expanding Single Family Rentals Survey to Saint Paul and Bloomington
To better understand the tenant experience, Family Housing Fund and CURA have launched an updated survey across Minneapolis, Saint Paul, and Bloomington (the three largest cities in the metro region). They are working with city governments and neighborhood organizations on the survey design, and the survey will add questions on topics like multigenerational housing and the factors related to housing choices. To gauge homeownership pathway programs and opportunity-to-purchase policies, the survey will ask if the renter would be interested in purchasing their home. Family Housing Fund and CURA have partnered with neighborhood organizations to promote the survey to residents to achieve higher response rates. The aim is to gather enough survey responses to provide compelling evidence to policymakers.
Policy and Advocacy Implications
These results offer a glimpse into the experience of residents in North Minneapolis single family rentals across the four investor-owner types. These hyperlocal survey results on tenant experience — alongside other research that uses administrative data to connect investor owners with more code violations and higher eviction filings — point to policy development and advocacy efforts that could improve tenants’ experiences in investor-owned single-family homes.
Based on Urban Institute policy scans, targeted approaches to identify large investor companies and hold them responsible for properties could provide tenants with safer, more affordable homes. For example, the District of Columbia passed a law in 2018 requiring LLCs to disclose the name and address of their owners. Local legislation could also be implemented that caps the number of properties a single real-estate investor can own. A similar bill has been proposed in the Minnesota state legislature, limiting corporations, LLCs, and investors to buying and renting 10 properties. Other, broader policies could benefit all tenants, particularly those who experience worse conditions and higher rent increases. For example, an opportunity-to-purchase policy would provide tenants the opportunity to purchase their home or assign their rights to a nonprofit entity; banning excessive renter fines and fees (e.g., garbage, snow removal, and lawn care fees) would reduce tenant costs; and stronger code enforcement mechanisms would protect renters’ housing quality and health.
Family Housing Fund and CURA’s efforts in North Minneapolis are just one step in unraveling tenants’ experiences in the Twin Cities to better inform stakeholders and policymakers of the effects of large investor owners in communities. As more surveys are collected and analyzed, the sharing the survey results and their implications for the Twin Cities could better inform other localities’ efforts to understand the issue.
