You Ask, We Answer

Proposed Rental License Program

Read the proposed updated details and provide input before Council votes later this summer. 

The City’s proposed Rental License Program has been in development for more than two years. Its start was delayed due to COVID-19, and now the program is in the final stages of discussion. Below are drafted features of the program, some of which have been revised after ideas came forward through more public input, Council direction, and staff recommendations. The Council has not voted on the formal law and program yet, and segments of the program could change before the Council votes later this summer—most likely in July. You as a member of the public can provide additional feedback now before the Council undergoes its final deliberations and decisions. Read below to learn more about the program and how you can share your opinions with Council members and the mayor. (Please note: For this article, the terms “landlord,” “property owner,” and “owner” are used interchangeably.) 

What is the purpose of the Rental License Program?
The purpose of the program is to ensure that every resident who lives in a rental unit in Red Wing has a safe and healthy place to live. How many rental units are in Red Wing? Statistics from the U.S. Census-2019 American Community Survey show that 34.5% of all occupied housing units in Red Wing are rental units. That equals an estimated 2,500 rental properties total. About 83% of those rental properties consist of one unit or two units. 

What are the basics of the program? 
The main elements as they are currently outlined for consideration look like this:
License fee: Property owners would be charged $40 per unit each year for a rental license. That equals $3.33 per unit each month and would be the same no matter how many units are in a rental property.
License fee deadline: The license period would start January 1 each year. License applications and fees would be due December 1 annually (one month prior to the license expiration date).
Inspections for health and safety issues: Properties would be required to be inspected every three years for basic health and safety issues as part of the license program. Examples of items from the inspection checklist include a roof with no leaks, proper plumbing, and electrical systems, one working toilet, and operable smoke detectors. The full checklist is on the City’s website.
Inspection zones: Properties in the west side of town (Zone 1) would be inspected first in 2022; properties in the middle of town (Zone 2) would be inspected second in 2023; and properties in the east side of town (Zone 3) would be inspected third in 2024. Large, multi-family units (Zone 4) would be in a “floating” category, spread across the three zones and inspected accordingly during the three-year cycle. Zone boundaries have been drawn based on the number of rental properties in each area so the inspection work load would be divided up equally. To see the interactive, online map of specific zones and properties, visit the link on the City’s website page.
Inspection visits: Property owners/managers would be required to attend inspections. Tenants would be welcome to attend an inspection but not required. The inspector would work with the landlord to visit all of an owner’s properties in one day, including those in different zones, if that option is easier for the landlord. Accommodations could be made on special request for a weekend or evening inspection.
Inspection timelines: The City would first inform a landlord of the year the property is planned to be inspected. The City would later give the landlord notification of the specific inspection at least two weeks in advance. The owner would then provide three dates and times he/she is available within a two-week period that starts 14 days after receipt of that notification. The landlord/owner must give tenants at least 72 hours notice of the inspection. The landlord must also demonstrate to the City inspector that a tenant is aware of the upcoming inspection and has consented to it. 

How will the program be paid for and staffed? 
The City would hire a full-time inspector dedicated to the program because it is important that inspections are done consistently using the same methods and standards. The total estimated annual cost for the program is $95,000, which includes staff, equipment, software, and other items. License fees would pay for the full program. No tax dollars would be used. 

What do landlords get out of this program?
Landlords would be provided an inspection of their properties at relatively low cost. These inspections help identify safety issues that may need to be addressed before problems cause harm to tenants or someone else. Landlords would also know that all rental properties in Red Wing are being addressed in the same manner regarding the health and safety items listed on the checklist. 

What happens if a property does not pass an inspection?
If a property does not pass its first inspection, the City would notify the owner in writing, and the owner would have up to 90 days to fix the items and report back to the City that the improvements were made. The inspector would visit the property one more time, free of charge, to ensure the repairs are completed. If the items are still not fixed, an additional inspection would be necessary. Any of these additional follow-up inspections would cost the owner $50 per inspection, based on the current proposal. (Note: Repairs could be mandated to happen immediately if a situation is threatening to someone’s life or property.) 

What should I do if I am a tenant and have a health or safety concern about my unit right now?
You can call the City’s building inspection department now or any time at 651-385-3623 to talk to one of the current building inspectors. Often an inspector can come look at the issue you’re concerned about free of charge and help you work with your landlord to get it fixed. 

If I am a tenant looking for a new rental place to live, how will I know that a property has a license and complies with the City’s health and safety standards?
The City will keep a list of all properties that have passed inspection so you can call the City to check. In addition, all multi-unit properties that have passed inspection must post that information in a conspicuous location. For one- and two-unit properties, the landlord must give a copy of the license information to each tenant. During the first three years of the program, some properties will have a Temporary License from the City until they get inspected. A Temporary License means the license fee has been paid, but the property has not been inspected yet during the start-up phase of the program. 

How will this work be documented?
The City will regularly update its GIS mapping system to show how many units have been inspected and how many units required improvements. 

What if someone is renting without a license?
If someone is renting without a license, that owner would have to pay double the license fee right away to get the required license ($80 if the current proposal is enacted). If after 60 days the owner has still not taken the steps to receive the license, the owner would be fined $500. 

What happens if a landlord or tenant refuses an inspection entirely?
If a landlord and/or tenant continues to refuse an inspection, the City could seek an administrative warrant through the county court system that would ask a judge to allow the City inspector to conduct the inspection. 

What if a property owner wants to appeal an order to comply with the City code?
An owner would have 10 days to appeal in writing and state the specific grounds for the appeal. The City Council would hold a hearing on the appeal in a timely manner and make the final decision. 

What happens if a property owner fails to comply at all with a compliance order?
If a landlord fails to comply with a compliance order within the set timeline, that person would be guilty of a misdemeanor and subject to a fine. (Under extreme circumstances, state law prescribes imprisonment but most likely that would not be needed.) Each day a landlord fails to comply would constitute a separate offense. Licenses may be suspended for up to 90 days, and licenses may be reinstated after the property owner makes the necessary fixes to the unit. 

If I recently purchased a rental property or am turning a current residential unit into a rental unit, how soon do I need to contact the City to apply for a license?
You would need to contact the City’s building inspections department and apply for a license within 10 days after acquiring the property or converting the property. 

Will I get my license fee back if I transfer ownership of my property to someone else during the year, or if my license is revoked?
No, you will not receive the license fee back. 

What if I am a property owner that lives far away from Red Wing?
If you are an owner who lives outside of Goodhue, Dakota, Rice, Wabasha, Hennepin, Washington, Ramsey, Olmsted, Pierce, or St. Croix county, you must designate someone in writing who will be responsible for the maintenance and upkeep of your property and who is legally empowered to receive notice of any violations and receive orders pursuant to a violation. 

What if I own a multi-family unit that is already inspected by a state or federal agency every few years?
The City would still inspect these units to make sure they meet the City’s code. The City also inspects every unit in a building, whereas other agencies often inspect only a percentage of units in a building. (See below for information specific to HRA-owned properties.) 

Are there any exceptions to the proposed $40 annual fee?
Yes. The program proposes two exceptions:
-- The license fee would be 50% for HRA-owned properties. The local Housing and Redevelopment Authority (HRA) owns various properties such as Jordan Tower I and II downtown and already inspects those properties. The HRA would work in partnership with the City to continue inspecting all HRA-owned properties following City code. HRA staff would provide documentation to the City of all inspections and improvements. The HRA, in turn, would pay 50% of the annual license fee for each unit.
-- The license fee would be 50% for newly constructed properties during each property’s first three years. All newly built rental properties will already have passed an inspection, so during the first three years, those property owners would pay only 50% of the license fee. 

Is this Rental License Program already set in stone? 
The Council is still taking community input on elements of the program. You may email your feedback to all the Council members and mayor at citycouncil@ci.red-wing.mn.us. You are also welcome to attend the June 14 Council meeting at City Hall to speak to the Council directly, either virtually or in person. See the timeline below. 

What is the timeline until the program is voted on?
*June 14 Council Meeting: You are invited to join this meeting, either virtually or in person, at City Hall to give your feedback to the Council. Council will not be making a decision at this meeting. You may also email the Council anytime with your opinions: citycouncil@ci.redwing.mn.us.
*Mid-June to mid-July: Staff will work to make any final revisions to the documents and ordinance, based on community and Council input.
*July 12 Council Meeting: Council may review the final drafted ordinance (city law) and may vote to consider adopting the first reading of the ordinance. The public can also provide their viewpoints at this meeting.
*July 26: Council Meeting: Council may decide to consider the second reading of the ordinance. All ordinances need a first and second reading in order to be enacted.
*July 30: If the program is approved, materials would start being mailed to rental property owners and tenants. Mailings will review details about the program and include the checklist and other resources about landlord and tenant rights and responsibilities. This timeframe would provide several months for owners to prepare and also give everyone time to get questions answered.
January 1, 2022: The program would potentially start. Inspections would begin in January or possibly February. 

How has the City reached out to the public about this program? 
The City has connected in the following ways.
-- Public meetings occurred on May 20, 2021 (virtual) and March 12, 2020 (in person).
-- Informational flyers and surveys in English and Spanish were sent to every tenant in Red Wing in October 2020.
-- Multiple articles and requests for feedback went out in the City’s free online newsletter, City Beat.
-- Articles and a video went out on the City’s social media platforms and on Channel 6.
-- City Council Workshops happened on November 10, 2020, and March 24, 2021, plus multiple Council meetings and reports provided discussion or updates over the last 18 months.
-- Articles were printed in the Republican Eagle.
-- Individual interviews happened with local landlords, tenants, and organizations, as well as conversations with officials from multiple surrounding towns and cities with similar programs.
-- Updates on all meeting recordings, notes, and documents are on the City’s Rental License Program page.

How do I learn more about my rights and responsibilities as a landlord or tenant?
You can read the Minnesota Attorney General’s booklet “Landlords and Tenants: Rights and Responsibilities" on the Rental License Program page. English and Spanish versions of the information are available.

Previous City Q and A Articles