Spiros Zorbalas update: Are notorious properties getting cleaned up?

Minneapolis slumlord still reigning over ramshackle homes

At first Anna couldn't see where the vermin were coming from. It was just the second day in her new apartment at 1820 Stevens Ave. when she spotted the first cockroach scurrying across the floor of her ramshackle one-bedroom spread. The Minneapolis Community and Technical College student opened the fridge to find dozens of roaches, some the size of thumbtacks, others as long as business cards, a few motionless with legs in the air, most very much alive.

For most renters this would be a harrowing anomaly. For Anna it was a harbinger and an accurate summation of her new home.

"It was clear that the management had no interest in maintaining the place," she says. "It took three weeks for the fridge to be replaced. I had to throw out all my food. You can imagine the cost of having to eat out every single meal."

To her disgust and surprise, the next fridge, too, contained roaches. Unable to foot another security deposit, Anna, who asked that her last name be withheld, reluctantly rented at a different apartment building owned by the same company—UPI Property Management.

UPI's owner is Spiros Zorbalas, titleholder to more than 40 rental properties in south Minneapolis and whose very name elicits nose-crinkling from tenants-rights groups and city inspectors. The subject of a City Pages exposé two years ago ("The Slumlord of South Minneapolis," January 29, 2008), the 46-year-old is far and away the most notorious landlord in the metro. Taken together, the problems described by Anna—a leaky ceiling, a light fixture with fetid rainwater, a perpetually broken dishwasher, unreliable heaters, rodent infestations, and, most exasperating, a perverse unwillingness on the part of management to do anything about it—make up a common thread that runs through the stories UPI tenants.

At the time of the initial City Pages article, Zorbalas sounded a defiant tone.

"There'll be a little hoopla for a week," he told CP staff writer Jonathan Kaminsky. "Big deal. We're going to keep running our business. I have nothing to hide."

Zorbalas had long been on city officials' radar—"[he] has lowered the bar for slumlords," as one councilmember bluntly put it—but the City Pages story and then-looming foreclosure crisis pushed housing issues to the top of the Minneapolis City Council's agenda.

"It's one of the top things we've been looking at," says Councilmember Elizabeth Glidden. "The foreclosure crisis has resulted in a lot of investor purchases. It's a big generality, but some of these investors want to spend a lot of money on purchasing properties, and then spend not so much on maintaining them." (See this week's feature story, p. 14).

To stave off a potential glut of slumlords, the city enacted a rental conversion fee in March 2008, requiring owners to pay $1,000 to convert single-family units to rental properties. The fee not only covers the cost of bringing in inspectors but theoretically provides a modest disincentive against gobbling up foreclosed houses and packing them with perpetual renters.

Two other measures were directly inspired by Zorbalas. First, the city made it easier for renters to contest baseless or excessive penalties (a staple of UPI, which was known for charging $100 for "non-emergency" maintenance requests and fining renters $80 a day for late rent payments). Administrative law judges were assigned to hear tenant appeals, thus streamlining the process. Rather than having renters appeal citations through the Hennepin County court system, aggrieved tenants can schedule a hearing in City Hall.

Second was the so-called cold-weather rule, which addressed another common complaint against Zorbalas and UPI. The cold-weather rule set clearer, more stringent guidelines for landlords when it comes to providing heat in their buildings. Landlords are now required to keep their heaters turned on between October 15 and April 15.

"These steps we've taken were done literally because of Spiros," says Councilmember Gary Schiff, whose south Minneapolis ward is home to the bulk of Zorbalas's properties. "When he first entered the market, he produced more complaints than any other landlord we had seen. His buildings still produce slightly more complaints per year, but we've made progress since enacting those measures."

The extent to which progress has been made depends on whom you talk to. Anna and her neighbors haven't noticed much improvement. That said, the City Council's claims are backed by data kept by the Minneapolis Fire Prevention Bureau, the city agency charged with inspecting rental properties.

In a memo sent to city officials last month, the bureau trumpeted "significant progress" it had made in combating Zorbalas's slumpire. The memo, which mentioned the 2008 City Pages story in its introduction, compared complaints and violations in 2008 and 2009. The report counted 105 complaints against UPI in 2009—down from 215 in 2008. The bureau issued 156 violations to UPI in 2009 from both complaint and rental license inspections, compared to 315 in 2008. In short, both complaints and violations have been halved.

Bryan Tyner, a gruff Minneapolis fire marshal tasked with inspecting UPI properties, admits there is still room for improvement.

"By putting together an aggressive inspection process, we were able to reduce the number of complaints we received," he says. "But they [UPI] are still one of the ones that require a good amount of our attention. So we're not quite where we want to be, but I would say we're moving in the right direction."

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