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Groundbreaking Fair Housing Settlement in Crossroads at Penn Class Action Lawsuit

On September 29, 2017 a group of former Richfield, Minnesota residents, from the 698 unit apartment complex called Crossroads at Penn, filed court papers outlining a groundbreaking settlement agreement in the Class Action Fair Housing lawsuit brought before U.S. District Court Judge Ann Montgomery in early 2016 against landlord James Soderberg of Soderberg Apartment Specialists (SAS) and MSP Crossroads Apartments LLC (MSP). The agreement includes a $650,000 payment to the Plaintiffs and important changes to the Defendants’ tenant screening practices.

This announcement comes exactly two years after the landlord acquired the property and notified tenants of significant rent raises, more exclusive screening criteria and immediate, drastic renovations. According to court documents an estimated 2,230 people lived in the complex, and ten months after the acquisition nearly 96% of the households had vacated. The Crossroads “upscaling” has become a notable case in point of local housing market trends and gentrification causing displacement and the loss of affordability. It is the subject of Sold Out: Affordable Housing at Risk, a Twin Cities Public Television documentary. Crossroads has directly influenced Minnesota’s local and regional policymakers’ plans to enact programs and protections to preserve affordable rental housing and prevent displacement.

The class of tenants is represented by the Housing Justice Center, a St. Paul-based public interest law firm, and class action experts Lockridge Grindal Nauen. The plaintiffs argued that SAS and MSP’s business practices had a disparate impact on residents protected by Federal Fair Housing laws (limited to race, disability, familial status, and national origin). Tim Thompson, lead attorney for Plaintiffs, explained “this is a landmark outcome that involved a new application of disparate impact—it has national implications as rental market trends continue to have a disproportionate impact on households of color, families with kids, and individuals with disabilities.” Maria Johnson, a former tenant and Class Representative stated “this legal precedent makes a statement that affordable housing is not a privilege to some but a right for all.”

HOME Line, a statewide nonprofit tenant advocacy group, joined the suit to demonstrate harm to an unknown number of future residents who would have made Crossroads their home had it remained affordable. Class Representative Linda Soderstrom states “with our success in placing people over profits here we hope more Minnesota renters will trust that their voices matter, that they are not alone and we encourage that they can organize when placed in harm’s way by gentrification.”

The settlement payment of $650,000 by Defendants will go to qualified displaced residents and applicants who were denied, Housing Justice Center, Lockridge Grindal Nauen, and HOME Line. The agreement represents, to date, the largest fair housing settlement around disparate impact claims of its kind in the nation. Class Representatives proposed, and it was ordered for a portion of the payment go to Greater Minnesota Housing Fund’s “NOAH Impact Fund” to prioritize the purchase, preservation and affordability of rental complexes in the Twin Cities. “This meaningful contribution to the NOAH Impact Fund will help keep rental homes in the metro affordable and accessible to low-income families, protecting renters who may have faced apartment transitions similar to Crossroads,” said Warren Hanson, President of the Greater Minnesota Housing Fund.

Additionally, the Defendants agreed to a series of important changes to tenant screening practices that will help to expand housing options for some community members. These screening criteria revisions include the removal of minimum income requirements and changes to household occupancy limits, review of rental history and criminal backgrounds, and alternative options to Social Security numbers and photo IDs.  

Class Representative Craig Goodwin, who lived at Crossroads more than 5 years, commented “This case was not just about those who were displaced in Richfield; it is about treating people everywhere equally, no matter their background or their financial situation; it’s about unity.” Charles Nauen of Lockridge Grindal Nauen added, “Class Members in this case will receive reimbursement while making a lasting influence on affordable housing.”  Read More

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