Poorly maintained properties hurt property values in the neighborhoods they are in.
“It’s absolutely negative,” says local realtor Debra Wagner. “I’m talking about the neighbors, housing values when they are trying to fix up their house or need to borrow money and there is not enough value because the properties around them pulling down the value because they are so ill-kept.”
Wagner cited one example – a house put on the market two years ago was sold almost $11,000 less than its original asking price almost solely because of the house next to it. “I was trying to sell this house,” she remembers. “To begin with it was fairly reasonable priced because we knew the impact of the house next door would have. It was a house that was damaged by the tornado and never fixed.”
According to Hennepin County property data, the single family home Wagner was selling, now valued at $70,000 but was first listed for $54,900, then later sold for $44,000. “In my feedback with realtors that showed the house, they specifically talked about the negative effect of that property as the reason why their buyers didn’t want to move forward,” she continues.
The vacant house damaged by the May, 2011 tornado still needs major repairs a month short of the storm’s three-year anniversary. It is currently owned by Mahmood Khan, who Wagner calls a “notorious landlord” who owns many North Minneapolis properties.
By Charles Hallman
Based on the number of comments received after our reporting of alleged bad landlords in North Minneapolis, apparently the two-part series originally published in the Minnesota Spokesman-Recorder and reposted in the Daily Planet struck a nerve among many readers.
The tragic house fire that killed five children in a house in February reportedly caused due to poor heat, and a later appearance by former Minneapolis councilman Don Samuels on a local radio show, prompted my editors to assign me to contact Samuels to further speak on the subject of bad landlords.
During our lengthy conversation, Samuels brought up the name of Mahmood Khan and accused him of being a bad landlord. Upon further investigation, we found several Northside properties Khan owned, and personally checked them out. Some were occupied, but no one was home when we knocked on the front door. Others looked abandoned. We also contacted the City, and a housing inspections official told us that Khan was on top on their list to seek having his rental licenses revoked.
We located a phone number for Khan, contacted him and left a message for him to comment on the charges. He eventually returned our call, and after a brief comment, Khan asked us to tour his properties, which we did.
Throughout the 90-minute tour, Khan was repeatedly asked about his properties – not at any time did we expect him to show us any bad properties that were not in good shape, although he did take us to a vacant apartment building damaged by the May 2011 tornado, which he claims the city won’t allow him to repair.
My job as a responsible journalist is to investigate facts, report them and offer an individual the opportunity to offer rebuttal or corroborating evidence when accused. We try to avoid at all costs being judge, jury and executioner. Rather we objectively published Khan’s responses and allowed the readers to judge for themselves.
However, some readers, based on their comments, saw otherwise, and didn’t appreciate our approach. Some accused me of propaganda coverage on behalf of Khan, seemingly preferring that we instead did ‘echo chamber’ reporting — just repeating one side of the story without asking or allowing a response — because they don’t like him. Finally whether someone is bad, as many community residents believe Khan is, or good, we don’t do ‘echo chamber’ reporting.
Khan is one of 103 property owners since 2010 in Minneapolis who have had their rental license revoked.
“The best result is to turn bad landlords into good ones,” says local resident Jeff Skrenes. “If you can’t turn them around, then you need to start taking their licenses away. You got to take some sort of action.”
“People don’t like me. I don’t know why. I’m part of the community,” says Khan.
“He [Khan] is dragging down the values in our community,” responds Wagner. “I actually have toured properties of his, and he was trying to show me the work he had done. It was horrendous.”
Bad landlords “eat up the heart of the community,” adds former Minneapolis councilman Don Samuels. He believes that the Northside became ripe for “investment buying” ever since the housing foreclosure crisis hit in 2005. “You have these older homes that need a great amount of upkeep being bought for a song and not being kept up,” the former councilman points out.
“Most of the houses he buys dirt cheap,” notes Wagner of Khan. “But would you think that would allow him room for him to add quality improvements to that property to actually provide a decent place for people to live.”
When asked if there’s more concern over declining property values than for the renters of Khan’s properties, many perhaps are low-income, “He is not providing decent housing,” notes Wagner. “He is putting as little as possible into that housing. He is about maximizing his profit. He is not about providing anything quality – he is not about serving people.”
Minneapolis Fifth Ward Councilman Blong Yang points out, “I think there is substandard housing out there that folk have to live in because of their criminal histories, bad credit history or those sorts of things. Those things should not prevent people from living in decent housing. Is that OK? It is not OK. I think that becomes a reflection on all of us, not the folk who are stuck in those situations.”
Yang believes that because of the demolition of the housing projects near I-94 years ago and not replacing them with affordable rental housing, “A lot of people suffered because of that.”
Samuels believes that the Northside became ripe for “investment buying” ever since the housing foreclosure crisis hit in 2005. “You have these older homes that need a great amount of upkeep being bought for a song and not being kept up,” the former councilman points out. He calls for a limit on rental housing on any one block: “If you have 10-15 houses on the block that are rentals, chances are that in any given time, one or two of those houses will have a problem tenant,” surmises Samuels.
“As people who live in North Minneapolis, and are active in the neighborhood, we are working to make sure that decent rental housing are here for people,” pledges Wagner. “There are [other] entities that are providing affordable housing.”
The City Council since 2008 have ruled 19 owners ineligible to hold a Minneapolis rental license – all but 11 owns or owned Northside properties. Some residents wouldn’t mind if Khan was added to the list. Wagner reiterates that he “is one of the most egregious” landlords in the area.
“You say I am not a good landlord . . . but I take care of my properties,” argues Khan.
“Hopefully at some point, we can get the slumlords out because they aren’t doing anything but for themselves,” concludes Wagner.
- Small group of slumlords have big effect on Minneapolis, by Charles Hallman (Minnesota Spokesman-Recorder, March 2014)
- North Minneapolis rental property owners refute slumlord label, place responsibility for code violations on problem renters, by Charles Hallman (Minnesota Spokesman-Recorder, April 2014)