INCENTIVIZING RENTAL REPAIRS
In 2015 the City introduced a new model for rental licenses called tiered licensing. Under this model, properties are assigned a designation as Tier 1, 2, or 3 based on the inspections and violations history of that property – with tier 1 having the fewest issues and 3 having the most. Being designated a tier 3 will mean that the rental license for that property will be more expensive, and it will get inspected more frequently.
The i-team partnered with the City’s Regulatory Services department to incentivize landlords to make needed improvements in a short time in order to earn a better tier designation. In this pilot project, we sent out letters to owners of Tier 2 properties informing them of the opportunity to get a Tier 1 status in the next billing cycle by participating in a full rental inspection and addressing any violations found within 30 days. To start, we offered 100 spots on a first-come-first-serve basis.
All 100 spots were filled on the first day that the program was open, and the department opened up another 50 to accommodate some of the additional demand. 75% of properties that ended up participating were able to move up to a Tier 1. The benefits of this pilot project were two-fold. First, households living in these properties experienced a real improvement in the condition of their property. Second, we learned that a public rating, through the tier designation, is motivating to property owners in Minneapolis.