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Heartless!

The Minneapolis Inspections department goes after Ron Folger and his tenants

 

Ronald Folger used to own 17 rental properties in north Minneapolis. Most buildings were between Lowry and Dowling Avenues and between Irving and Lyndale. On Sunday, December 4, 2011, the Star Tribune reported that the city of Minneapolis was planning to revoke Folger’s rental licenses on all 17 properties because it had already revoked the licenses on two of his properties. That meant that it would be illegal for him to put paying tenants in those buildings for the next five years. Tenants currently renting from him would be forced to vacate their units.

The Minneapolis City Council in the early 1990s decided to hold landlords accountable for their tenants’ behavior by creating a three-step process of revoking rental licenses. Again, property owners needed this license to have paying tenants. The community-policing unit of the Minneapolis Police Department would send a warning letter to the landlord if a violation took place in his building such as prostitution or drug activity. The landlord had ten days to submit a “management plan” to the police that would show how future violations would be avoided. Three such letters in a year would trigger license revocation. The licenses would be revoked for all the buildings a landlord owned if revoked on two of his properties.

Ron Folger's experience with the city of Minneapolis

How did Ron Folger get in trouble? Recognize first that Folger had a full-time job in the circulation department of the Star Tribune where he was also a union steward. He was unable to manage 17 properties while assuming such responsibilities. Folger hired a property manager to help him in that business. The woman he hired was not effective. When the police found drugs on a tenant of the building at 1651 Penn Avenue North, this manager felt sorry for that person and refused to evict. Ron then evicted the tenant himself, but the city said it was too late.

With respect to the management plan, there was confusion as to who would meet that requirement. Ron’s wife handled the paperwork for his rental-property business. The hired manager also did that kind of work. Both thought the other was working on the management plan and, as a result, the plan was not filed on time. It was a big, big problem from the city’s standpoint.

Ron Folger also received a warning letter for failure to meet an inspector at his building at the appointed time. One time, he was unable to leave work. Another time, the city scheduled two inspections at different locations at the same time. Ron obviously could not be at both of them. He received a warning letter about the missed appointment even though he had called the city inspector to ask that one of the inspections take place at a different time. The inspector was not in. A taped message said that he (or she) would return the call within 48 hours. Evidently, this was not enough time to reschedule the appointment. (Ron notes that when city inspectors fail to meet their appointments, landlords are expected to accept a simple apology.)

From Ron’s experience, city inspectors vary greatly. Some are business-like and reasonably sympathetic. Some are incompetent and vindictive. In a recent case, an inspector cited Ron for a faulty radiator on the second floor when the entire building was heated by forced air. An inspector also ordered him to rip up and replace the asphalt driveway to a garage because of cracks in the pavement. The neighbors’ driveways were in much worse shape. Still another time, Ron Folger was written up for failure to complete a TISH report on the building. In court, Ron was able to show a judge that the report had been completed in the previous year. The inspector had argued that he was several weeks too late. And then there was the time that the city claimed that Ron was renting to someone without a rental license. The problem with this was that Ron no longer owned the building. He had already given it to a church.

The district manager for the Minneapolis housing inspections services, Janine Atchinson, had a low opinion of Ron. Privately, she accused him of purchasing substandard properties, putting only a small amount of money into renovating them, and renting only to the most desperate people - poor people, minorities, etc. Accused of hurting them, she was quoted In the Star Tribune article: “We certainly are not heartless and don’t want to make people homeless. But if the alternative is to allow landlords to operate properties in a substandard way, we need to protect the general public, which includes the tenants, and the neighborhood.”

Many residents of Minneapolis do believe that the city and especially its Inspections department are heartless. Because one tenant in one of Ron Folger’s buildings was caught using drugs, all the tenants in all of his rental properties must be evicted in the dead of winter. Does not Ms. Atchinson know that it is difficult for many of those tenants to find replacement housing? Does she even care? Probably not. the Inspections department is filled with bureaucrats enjoying high-paying, public-sector jobs who do as their superiors tell them with nary a thought for the many suffering people in the city.

The Minneapolis inspections department operates in a systematically unprofessional manner. Its core of legitimacy is maintaining the health and safety of city residents insofar as it concerns housing. However, this department goes after building owners rather than buildings. The condition of the buildings is not its sole concern. Instead, Inspections punishes landlords whose buildings are connected with crime problems. It shifts the blame for inadequate policing from the city police to individual property owners. It does this not because it is right but because the city bureaucracy can. However, the main purpose of the Minneapolis Inspections department is increasingly to be a profit generator.

Ron Folger estimates that he paid the city over $20,000 in fines and fees last year. This is in addition to property taxes. The “producers” among city inspectors are likely the ones who get promoted. It’s $100 for a missed appointment and $200 for code violations that were not fixed when reinspected. If this happens again, the fines double; they double again if it happens a third time. The “double your money” casino mentality is present among the city bureaucrats. Some landlords crack under the pressure and some well-connected investor is able to acquire their properties for a song.

Ron Folger has quit his job at the Star Tribune so that he can personally manage his properties. With an impending revocation of his rental licenses, he has sold some of his buildings to other landlords. He is hoping that the city will allow him to own and operate the remaining five.

The Minneapolis City Council’s regulatory, energy, and environmental committee is scheduled to meet to consider Ron Folger’s appeal in room 317 at City Hall on Monday, December 12, starting at 1:30 p.m. If the decision to revoke is sustained, this matter goes before the full Council on December 16th. Waiting in the wings is a contingent from Minneapolis Property Rights Action Committee, along with some of Ron’s tenants and other interested persons.

On the appointed day

The contingent from Minneapolis Property Rights Action Committee included Frank Trisko, Bill McGaughey, and Dave Sundberg, who recorded the scene with a videocamera. Ron Folger and his wife were, of course, on hand, as was Bill’s former wife, Sheila Gorman. Joining them were Peter Brown, head of the Minnesota Tenant’s Union, and six to eight persons from that organization. Randy Furst and a young female reporter covered the story for the Star Tribune. After 1:30 p.m. they waited in the hall outside the Council chambers for ten minutes or so. The chair of the council subcommittee, Elizabeth Glidden, talked with some of the Tenants Union people.

Bill McGaughey’s objective was to cause a commotion without being arrested. Since none but Folger would be allowed to speak, the most effective way to communicate would be with signs. Bill had prepared five signs in large lettering that said “Heartless!”, on colored stock paper. The Tenant’s Union protesters had their own signs. When the Council meeting started, Bill sat with Ron Folger and his wife in the front row a short distance from the bench where the committee members sat.

First to testify was Janine Atchinson, area director for the Minneapolis Inspections department. Peter Brown tried briefly to make a statement but the committee would not allow it. Ms. Atchinson recited the legal case for revoking Folger’s licenses for ten to fifteen minutes.

While she was speaking, Bill McGaughey noticed a row of empty seats behind her in the video monitor that was recording the committee hearing. He left the front row and took one of those seats. Bill now held up one of those orange-bordered signs so that the word “Heartless!” appeared behind Ms. Atchinson’s head at the podium. He made sure that the complete word was visible at all times. Also, when Ron Folger made his statement from the podium, the word “Heartless!” was visible. Viewers of the city’s cable production would make the connection between the City Council proceedings and its heartlessness. No other speakers were allowed.

As expected, the Council consisting of Elizabeth Glidden, Lisa Goodman, Cam Gordon, Don Samuels, and Diane Hofstede did not take long to finish its deliberation, voting unanimously to recommend that all 16 of Ron Folger’s rental licenses be revoked. Glidden had arranged, as a sop to the tenants, that they be given 90 days to vacate the premises. This, too, passed by unanimous vote. Glidden then announced that the committee had finished its business and was adjourned.

Heartless!

Just as this announcement was made, Bill McGaughey murmured, first in a soft voice and then a louder voice, “Heartless, heartless, heartless”. Others joined in. The Council members at the podium looked stunned as the word “heartless” reverberated in the chambers. Most committee members beat a hasty retreat. Don Samuels sat alone at the podium answering questions posed by reporter Randy Furst.

During a lull in that conversation, Bill McGaughey approached Samuels. “Why are you doing this, Don?” he asked. Samuels said he did not want to talk with McGaughey because, knowing he belonged to Minneapolis Property Rights Action Committee, he was someone with an agenda. Samuels would talk with tenants affected by this move, but not McGaughey. McGaughey said he was Samuels’ constituent and had every right to talk with his own Council member.

With the Star Tribune reporters listening to their conversation, McGaughey and Samuels had a heated argument about the city’s policy toward landlords. Samuels said he was sick and tired of bad landlords such as those in his own neighborhood (on Hillside avenue, north of Broadway) who offered a shoddy product and attracted crime.

McGaughey argued that, from a consumer standpoint, the quality of the housing product was none of the city’s business. Under the free-market system, tenants could always move to a better situation - if there were housing units available in the city after the city had demolished so many. Samuels was enraged. He called this attitude “callous”. He saw his role as protecting tenants and neighbors from “slumlords” such as Folger. (See Samuels conversation.)

Eventually, landlords Frank Trisko and Dave Sundberg had their own conversations with Don Samuels, somewhat less heated. McGaughey abruptly shook hands with Samuels and left the Council chambers.

That evening, McGaughey received a telephone call from Trisko and another landlord that the verbal eruption (“heartless”) had been recorded by Channel 9 news. It was one of the lead-off stories on the 9 p.m. broadcast. The 10 p.m. broadcast also covered the story while omitting the raucous exchange. Then, in Tuesday’s Star Tribune (December 13), Randy Furst’s article on the committee hearing occupied the main position in the Metro section. There was a large picture of Samuels arguing with McGaughey.

Dave Sundberg went on to produce a video which included an interview with one of Folger’s tenants who had not been at the hearing. Most tenants spoke highly of their landlord. Later in the week, McGaughey was interviewed by a reporter for Minnesota Public Radio.

Then, on December 20, a week after the news story, the Star Tribune published an Opinion article by McGaughey concerning the proper role of Inspections. It was hoped that Samuels or another apologist for the city would offer a rebuttal.

 

MPLS. SET TO REVOKE
LANDLORD’S LICENSES

Minneapolis City Council member Don Samuels got into a heated debate with landlord Bill McGaughey, left, of Minneapolis Property Rights Action Committee, after a council committee voted Monday in favor of revoking landlord Ron Folger’s 16 rental licenses. 

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