On January 18, twenty-one (21) tenants of Pretium Partners’ and Ares Management’s HavenBrook Homes/ Front Yard Residential in Columbia Heights, MN, a suburb of Minneapolis, received notices on their doors to vacate the premises in 45 days, or March 4. Tenants received this order because Havenbrook Homes neglected to resolve maintenance issues at multiple properties in Columbia Heights that were reported to the city in July 2021. City inspectors returned to the homes monthly from August to November 2021, reaching out to Havenbrook one last time in December 2021 to verify the status of the repairs. The repairs had not been completed.[i]
In January 2021, Ares Management acquired rental home company Front Yard Residential in a joint venture with Pretium Partners – the country’s second largest owner of single-family rental homes.[ii] Additionally, Ares Management’s Landmark Partners is invested in Pretium Partners’ single-family rental company Front Yard Residential and HavenBrook Homes – companies that directly own and rent multiple single-family homes in Minnesota.[iii] For several months, tenants have alerted Pretium, Ares, and Landmark Partners and their investors to maintenance issues, increasing rents and fees, and a lack of communication with the company when issues arise.
In a statement issued January 20, the City of Columbia Heights said,
“In this particular case, violations that were not corrected in a timely manner included, but were not limited to, missing or broken carbon monoxide detectors and smoke detectors, lack of functioning locks and latches on doors and egress windows, combustible material stored under basement stairs and near the furnace, mold in the kitchen, holes in the walls, illegal bedding in the basement, leaking plumbing, broken windows, and incorrectly installed or poorly maintained electrical wiring. These violations put residents’ lives at risk and shall not be tolerated by the City of Columbia Heights.”[iv]
The City of Columbia Heights revoked Havenbrook’s rental license and as a result all tenants attached to that rental license must remove themselves from their homes within 45 days of the notice – by March 4.
According to the Columbia Heights city website Scott Beck, Havenbrook’s Midwest Director of Operations is now ineligible to hold a rental license in the city for five years: “Rental Property Owners that have had two or more licenses revoked will be ineligible to hold or have an interest in a rental license for five years.”[v]
Havenbrook tenant Korrie Holzer shared her fears with the Minneapolis Star Tribune, “I have had three days of tears under all the stress to begin with. We are terrified we all will be homeless.”[vi]
The Columbia Heights City Council January 10 meeting materials identified two homes with a number of maintenance issues which were conveyed to Havenbrook as its responsibility to repair in July 2021 and that ultimately went unaddressed.[vii]
On January 24, 2022, affected Columbia Heights tenants, their neighbors and homeowners, other Havenbrook tenants, and advocates attended the Columbia Heights City Council meeting to voice concern for this situation. Many tenants told city council members that the first time they were informed of an issue with Havenbrook was when the revocation notice was posted on their doors. Corey, an affected Havenbrook tenant told the council, “45 days to vacate in the dead of winter is a hell of a punishment to pay for a crime that we did not commit.”[viii]
Columbia Heights Mayor explained that the city council did not initially know so many households would be affected by the rental license revocation. Affected tenant Tia said she faced an estimated $4,200+ in possible moving costs including a new security deposit, first month rent, application fees, background checks, uhaul/rental truck, ID/Driver’s license change, etc.[ix]
Alexandra, originally from South Florida, said her entire household is new to Minnesota and she does not know how they will find a new home by March explaining “We have done nothing wrong to the house. We have kept it in pristine condition. I deserve my money back for upholding my side of my rental agreement. Whether the other side upheld their side or not – I still paid my rent every month on time. I don’t know what the next step is.”[x]
Advocates asked the City Council to take action to keep Havenbrook tenants in their homes including taking legal action on behalf of the tenants, including a Tenant Remedies Action.[xi]
In September 2021, Chloe Jackson, Lead Organizer at Renters United for Justice, provided public comment to Alameda County Employees Retirement Association (ACERA) in which she explained that many Havenbrook tenants in Minnesota were dealing with severe unresolved maintenance issues, and asked board to hold off on any new investments with Ares until they address the homes they own.[xii]
In response to Ms. Jackson’s comment, an Ares Management executive told the ACERA board that Ares and Pretium were investigating the situation in Minnesota and were aware of at least 217 maintenance and repair issues, and that they were deploying a number of contractors to address those issues.[xiii] It is unclear why maintenance repairs in Columbia Heights went unaddressed despite Ares’ claim that it was deploying contractors to the state in September.
Now, because of Havenbrook Homes and its private equity owners’ inaction in addressing the maintenance issues of its properties, at least 21 families have been provided notices to vacate their homes in the depths of winter in Minnesota.
[i] City of Columbia Heights City Council Agenda & Minutes, “Agenda Packet – City Council Meeting, January 10, 2022” pp. 150 – 155. https://meetings.municode.com/PublishPage/index?cid=COLUMBHTMN&ppid=be4a8e87-41cb-4972-b3e6-eea514f3f8e2&p=1.
[ii] Kalinoski, Gail. “Pretium, Ares Close $2.5B Acquisition of Front Yard Residential.” Multifamily Real Estate News (blog), January 13, 2021. https://www.multihousingnews.com/pretium-ares-close-2-5b-acquisition-of-front-yard-residential/.
[iii] Du, Susan, and Jeff Hargarten. “North Minneapolis Renters Wage a Fight with Private Equity Landlords.” Star Tribune, May 29, 2021. https://www.startribune.com/north-minneapolis-renters-wage-a-fight-with-private-equity-landlords/600062754/.
[iv] City of Columbia Heights. “City Statement Regarding HavenBrook Rental License Revocation,” January 20, 2022. https://www.columbiaheightsmn.gov/news_detail_T17_R581.php.
[v] City of Columbia Heights MN. “Renewing a Rental License.” Accessed January 26, 2022. https://www.columbiaheightsmn.gov/departments/fire_department/renewing_a_rental_license.php.
[vi] Harlow, Tim. “Columbia Heights Revokes Licenses of Corporate Landlord, Evicting Renters of 21 Properties.” Star Tribune, January 24, 2022. https://www.startribune.com/columbia-heights-revokes-licenses-of-corporate-landlord-evicting-renters-of-21-properties/600139143/.
[vii] City of Columbia Heights City Council Agenda & Minutes, “Agenda Packet – City Council Meeting, January 10, 2022” pp. 150 – 155 https://meetings.municode.com/PublishPage/index?cid=COLUMBHTMN&ppid=be4a8e87-41cb-4972-b3e6-eea514f3f8e2&p=1.
[viii] “Video – Jan 24, 2022 City Council – Columbia Heights, MN.” Time marker 1:00:21 https://columbiaheightsmn.new.swagit.com/videos/153336.
[ix] “Video – Jan 24, 2022 City Council – Columbia Heights, MN.” Time marker 1:10:00 https://columbiaheightsmn.new.swagit.com/videos/153336.
[x] “Video – Jan 24, 2022 City Council – Columbia Heights, MN.” Time marker 1:27:26 https://columbiaheightsmn.new.swagit.com/videos/153336.
[xi] The Office of Attorney General Keith Ellison. “Landlords & Tenants | Tenant Remedies Action.” Accessed January 26, 2022. https://www.ag.state.mn.us/consumer/handbooks/lt/CH2.asp.
[xii] Volante, Alisha. “Evictions and Tenant Concerns Spur Robust Discussion with Ares Management at the Alameda County Employees’ Retirement Association (ACERA) Meeting – Private Equity Stakeholder Project,” December 3, 2022. https://pestakeholder.org/evictions-and-tenant-concerns-spur-robust-discussion-with-ares-management-at-the-alameda-county-employees-retirement-association-acera-meeting/.