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18 <br /> <br />one group bars it, and one group of states has not clearly resolved the question. Minnesota falls <br />into this last group.54 Note, however, there are several examples of where local ordinances have <br />created these rights, which to our knowledge, have not been legally challenged to date. <br /> <br />Locally, the City of St. Louis Park has enacted a Tenant Protection Ordinance which <br />provides that when NOAH properties are sold, the new owner must provide 90 days notice of <br />evictions without cause, rescreenings of tenants, or rent increases, or else pay relocation benefits <br />if the owner does not want to wait 90 days.55 NOAH properties are defined as those where at <br />least 18% of the units’ rents are affordable to households at 60% AMI. Relocation payments are <br />set at $2600-4100, depending on the size of the unit. The ordinance is enforceable through a <br />penalty of $500 plus the applicable relocation payment, which is to be passed on to the tenant. 56 <br /> <br />Several other cities in the Metro area are considering ordinances modeled closely on the <br />St Louis Park ordinance. <br /> <br />Maximizing the Effectiveness of Public Use Restrictions <br /> <br />Government agencies providing public funding to housing developments typically <br />require commitments to affordability restrictions, through contracts and often through restrictive <br />covenants filed against the property. The extent of the affordability restrictions (how many units, <br />at what affordability levels) and their duration over time usually depend upon the extent of the <br />public funding; the more funding, the greater the restrictions the public agency will expect. <br />Local governments may be directly involved through funding they have provided, but they <br />should also pay attention to threats to subsidized housing that they are not funding. <br /> <br />At the federal level, private owners of buildings with Section 8 contracts (project-based, <br />as opposed to tenant-based) will have opportunities to “opt out” or non-renew their Section 8 <br />contract. When owners opt out, they are required by federal law to provide a one year notice to <br />the State and to the tenants. During that year Minnesota Housing typically engages the owner in <br />conversation and in some cases, the owner decides to accept assistance from Minnesota Housing <br />and withdraw the opt out. In other cases, the owner proceeds with the opt out. In that event, the <br />tenants receive a type of Tenant Protection Voucher called an Enhanced Voucher, which usually <br />allows the tenant to stay despite the opt out. Over time, however, due to the opt out, the building <br />typically becomes no longer available as a home for the very low income tenants typically <br />supported by the Section 8 program. For that reason, it is important to avoid opt outs wherever <br />possible. <br /> <br />There can be a role for local governments in this process. First, cities and counties <br />should maintain a complete list of developments with affordability restrictions, the type of <br /> <br />54 “The City and the Private Right of Action,” Paul Diller, 64 Stanford Law Review 1109 (2012). <br />55 ST. LOUIS PARK, MINN., Ordinance 2534-18 (Apr. 16, 2018). <br />56 Minnesota statutes 471.9996 prohibits rent control, subject to certain exceptions. The TPO approach does not <br />violate this statute, however, because the landlord is free to raise the rent at any point—as long as he is willing to <br />pay relocation benefits. The argument has also been made that this statute bars limits on the amount of rent that <br />can be charged, but not on the period of time required for a notice of rent increase. We are unaware of this <br />argument having been resolved by a court.