Audio Report (8:16) (RealAudio 14.4)

Fourth in a Series

(SFX: Newspaper crunching)

Just open the newspaper and look at all the pages of rental ads. It's hard to believe that a decent apartment might be difficult to find. What's not obvious in these ads is that you're looking at essentially TWO local housing markets; one for the stable, middle-class renter, one for the working poor and families on welfare. You can't simply tell one market from the other by the price. The differences are in how the rental systems operate and in the quality of apartments offered.

(SFX: apartment, kids)

Audrey Evans, a single mother living on federal Aid to Families with Dependent Children, has a lot of experience perusing rental ads. Each of the past seven years she's had to move. The first apartment she found was too small for her three kids.

((EVANS: The second one was a very nice place, but the landlord sold the building. and then after that, the next one, me and the landlord had a problem about things getting fixed and I had to move.))

It happened like that, year after year. The rental market in the Twin Cities is unusually tight. Low income housing gets scarcer all the time. Sometimes Audrey was so desperate for a place she'd take whatever she could find, regardless of condition.

((EVANS: I was living in an apartment in Maplewood and they were paying for the heating and it wasn't enough for the house. My daughter at the time, she was about six or seven, and she got real sick from the house being so cold and she went into a seizure and stuff because of her fever. I stopped paying the rent because they weren't coming in to get the things fixed for me; before I decided I was gonna move they had already filed a U-D on me.))

A U-D, or unlawful detainer, is the scarlet letter marking a bad tenant. The U-D is a court-ordered eviction, usually for failure to pay rent. Most landlords in the low-income market check a prospective tenants' criminal, credit and rental histories. The U-D on Audrey's record made it harder to get accepted by new landlords, even though she might argue that the eviction was unfair.

(SFX: entry way of Mary's Place. Kids yelling, doors opening and closing)

At a shelter for homeless people in Minneapolis, Dionne, her husband and their five children are living in two rooms while they search for a permanent place to live. They don't have a car, so Dionne takes the bus to look at vacant apartments, often with the kids in tow. She's looked at more than 30 places so far. Dionne's discovered it's tough to find an affordable apartment or house for two adults and five kids, except, perhaps, in some of the suburbs.

((DIONNE: I guess if you're willing to move out there with no transportation that's fine, but I've got small children. If they get sick, I don't have anyone to call to come get us and take us all back in the city. So I've been looking mainly in the city, I've looked in Saint Paul and Minneapolis and I can't find nuthin.))

Finding a big enough place isn't the only problem. Like Audrey, Dionne has a U-D eviction on her record. Every time she signs up for an apartment, Dionne has to pay a non-refundable application fee, usually from 15 to 35 dollars. That's about what the landlord pays a screening company for the background check. Because of the U-D, she's been turned down every time.

((DIONNE: The money I've shelled out I really can't afford to shell out paying these application fees just to have them tell me, 'no,' that I can't have the place. It's like I just walked up to you on the street just to be giving it to you. I don't have money like that.))

Dionne says she's spent so much money looking for an apartment, that if she does get accepted at one, she's not sure she'll have enough left for the security deposit.

(sfx: of the kids leaving the shelter to get on the school bus)

Across town in St. Paul, homeless moms load their kids onto a school bus at their temporary lodgings in a homeless shelter. Yvette supports her three kids on AFDC, and one of her chief complaints about low-income housing is what she actually gets for her money. Her last place was a two bedroom apartment that cost 700 dollars a month, and it was a dump.

((YVETTE: Rats and mice. And sometimes no lights and sometimes no water. And sometimes I'd have to sit up at night because there wasn't an adequate lock on my back door. We had to get a slab of wood, a piece of lumber to prop up against the door just so nobody would open it. The yard's off the back alley. That wasn't worth it.))

How can landlords get away with charging so much for so little? John Powell, director of the Institute on Race and Poverty at the University of Minnesota Law School, says low income tenants are in a captive market.

((POWELL: Many of the people who are homeless or in shelters will not have the credit history. And if you don't have the credit history, the landlord or prospective owner jacks up the price. Anytime you have difficulty finding housing, it means you're likely to pay more for it, because you're in a much tighter market.))

Housing advocates say that some landlords intentionally take advantage of poor people; charging too much in rent, demanding excessive application fees, pocketing damage deposits without justification. But Brian Miller says these genuine slumlords are actually a minority.

((MILLER: Renting property to low-income people, particluarly smaller rental properties is not something you're going to make money at.))

Brian Miller heads the Neighborhood Development Alliance, a non-profit organization that builds and refurbishes low-income housing on St. Paul's west side. He also privately owns a few small rental properties. Miller contends that many landlords in low-income neighborhoods get into the business expecting to make a modest amount of money. He says they wrongly assume that a small landlord's most valuable skills are handiness with a paint brush and a plumber's wrench.

((MILLER: They're not prepared to deal with the tenant problems. They feel ripped off and cheated when they get a tenant that trashes their apartment, has parties or walks out and doesn't pay the rent. To me, what I see, is well intentioned people who expected to make, not big money, but some money, getting disheartened and not maintaining their properties over time and they get rundown.))

It's an unending cycle, Miller says, with properties changing hands time and again. On St. Paul's east side, landlord Ward Schleppi recalls the damage left behind by an angry tenant in a low-income apartment building he recently bought.

"You can still see some…well there was a shotgun blast through the floor here, so we had to patch the subfloor and then go on underneath the ceiling. The guy below decided to move, well becausehe got woke up. The thing missed his head by about this much."

Ward Schlaeppi owns three buildings on the east side. When he bought this place, he started evicting the most troublesome tenants-the kind that don't pay their rent or prompt frequent police visits. All new tenants must pass a background screening and a minimum income requirement.

"Well, I'd like to see that they are working. I mean, I don't say that they have to be working. But we do have income requirements that would make it so that someone who doesn't work at all to qualify. "

ss. So for this apartment for example, what would be the income requirement?

WS. Double the rent at least. And usually I like to go three times what the rent is as a gross wage.

ss. And the rent here is?

WS. This is a one bedroom so the rent's for about $400. And the twos go all the way up to $495.

That means a family must get at least 800 dollars a month in wages or welfare to pass Schelppi's threshold. None of the women we met earlier in this story would qualify. Schlaeppi has essentially bought 18 low-income apartments, fixed them up, priced them for the working poor and out of the range of many disadvantaged renters.

(SFX: Gospel music from Audrey's apartment.)

Audrey Evans is lucky. She found refuge from the low-income rental market. New Foundations, a non-profit service that helps house poor women, gave Audrey furniture and found her a pleasant three bedroom apartment in the suburbs.

"I like being away from the hustle and bustle of the city. The things that are going on. I feel more comfortable out here."

Meanwhile, Dionne and Yvette are still looking, still paying the application fees, hoping to find a place they can both afford and feel safe in. Housing advocates say one small way to make life easier for low-income renters is to create notarized credit reports they could give to prospective landlords, instead of paying for a new background check at each apartment. But housing experts say what's really needed is a substantial number of new, affordable three and four bedroom places for families in the Twin Cities. No one expects that to occur anytime soon. For MPR this is Stephen Smith.

Our report on low-income housing was produced by Stephanie Curtis.

High Cost of Poverty Series - Fringe Banking - Minnesota Pawn - Rent-To-Own