Tenants withhold rent from hedge-fund owned HavenBrook Homes to force repairs

By: - May 19, 2022 4:39 pm

Tiki Cross speaks at a news conference in front of his home in north Minneapolis on May 19, 2022. He says his landlord, HavenBrook Homes, has done little to address health and safety issues including a rat infestation. Photo by Max Nesterak/Minnesota Reformer.

Families renting from one of the state’s largest private landlords, HavenBrook Homes, have started putting their rent in escrow in an attempt to force the company to address numerous health and safety issues in their homes in north Minneapolis.

Tenants of HavenBrook, which is owned by New York-based hedge fund Pretium Partners, say the company has failed to address lead paint, mold, flooding and electrical problems, which have led to health problems for them and their children.

Tiki Cross said the conditions at the HavenBrook home he rents are so bad that he moved his children to another relative’s house for their own safety. He said his home floods, the floors sag, and he found live rats in his childrens’ beds.

“I can’t have them here,” Cross said through tears during a news conference in front of his home in north Minneapolis on Thursday.

Cross said he was embarrassed to share his story but hopes it will put pressure on HavenBrook to make repairs.

“I would never have told nobody this,” Cross said. “I just want my kids to come home.”

Cross put his latest rent payment of $1,409 into an escrow account instead of sending it to HavenBrook. While they have made minor repairs, he said they haven’t fixed the major issues, including the pest infestation.

Reached for comment, representatives for a public relations firm hired by HavenBrook Homes said they would look into the allegations but have not yet provided a response.

Earlier this year, Attorney General Keith Ellison filed a lawsuit against HavenBrook for failing to maintain its properties, which include more than 600 single-family homes in the Twin Cities metro area and some 70,000 rental properties nationwide.

Ellison says the lack of maintenance is part of the company’s business model, pointing to claims from Pretium that profits from its single-family rental business rival those of multi-family businesses, which are typically more profitable.

Housing advocates say private equity-backed landlords are a growing scourge in rental housing markets across the country, gobbling up the limited supply of homes for sale only to allow the properties to fall into disrepair.

“They come into low-income community neighborhoods and they buy up and they buy fast,” said Shanika Henderson, a HavenBrook tenant.

A recent study by the Federal Reserve Bank of Minneapolis found that the share of investor-owned properties in the Twin Cities metro has more than doubled over the past 15 years, from 1.8% to 4.1%.

That’s led activists and policymakers to try to limit their expansion. The League of Minnesota Cities proposed a new state tax this year on corporations purchasing owner-occupied single family homes, although it failed to make it into the Legislature’s final negotiations.

The families living in HavenBrook homes, which are mostly concentrated in the city’s low-income Northside, say the company has failed to answer their pleas for repairs for years, all while charging them high rents and fees.

Low-income renters often struggle to find a new place to live given the rock bottom vacancy rate for affordable rental homes in Minneapolis and moving costs.

Tenants have also called on the city of Minneapolis to do more to hold problem landlords accountable.

Cross’s house has a top tier inspection rating from the city, but the last time the city completed an inspection of the inside was in 2015. A representative from the city’s regulatory services department said the property is up for a routine inspection this year. She said an inspector visited the property in March and will be back this week.

All new rental properties begin with a top tier rating from the city pending an inspection from the city, which often doesn’t happen for years.

About a year ago, HavenBrook tenants began organizing for better conditions with the renter advocacy group Inquilinxs Unidxs por Justicia (United Renters for Justice).

Seven families with the help of Inquilinx Unidxs por Justicia used rent escrow to push for repairs, and so far three have won settlements.

They include Arianna Anderson, who said she’s been dealing with mold, lead paint and, at times, a lack of heat in the winter — conditions which sickened her two kids, both under five years old. She won a settlement, which includes a modest monetary award along with the option to move into another HavenBrook home.

But she says the majority of the issues in her home have not yet been addressed.

“I feel like HavenBrook has neglected this community and families like mine,” Anderson said. “HavenBrook, please invest in our community, since you are profiting from our community.”

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Max Nesterak
Max Nesterak

Max Nesterak is the deputy editor of the Reformer and reports on labor and housing. Previously, he was an associate producer for Minnesota Public Radio after a stint at NPR. He also co-founded the Behavioral Scientist and was a Fulbright Scholar to Berlin, Germany.