LANSING, Mich. (Michigan News Source) — If a rental property is deemed unfit to live in, Lansing landlords will now have to cover the cost of relocating tenants —either by insuring against it or agreeing to pay the city back directly.

Red-tagged reductions.

The new requirement, unanimously approved by City Council on July 28, aims to reduce taxpayer spending on emergency relocations and cut down on the number of unsafe housing units, also known as “red-tagged” properties. The policy takes effect immediately, though it only kicks in when landlords apply for a new or renewed rental license, according to the Lansing State Journal.

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City officials say it’s a choice: Either carry an extra insurance policy that covers emergency tenant moves, or agree in writing to reimburse the city up to $2,550 if a displaced renter needs help finding temporary housing.

Sorting out the details.

Some of the details, however, remain unclear, including what happens when the damage isn’t the landlord’s fault.

Council member Trini Lopez Pehlivanoglu raised that issue, asking what the city would do if a tenant intentionally damages a unit, rather than neglect by the landlord causing unsafe conditions. Council President Ryan Kost said that’s a question for later, trusting code inspectors to make the right call for now.

“There have been conversations about that issue,” Kost said. “We will be addressing it at a later point after passing this.”

Relocation insurance.

If relocation insurance isn’t available—something Pehlivanoglu said may be the case with some providers—landlords will have to sign an agreement with the city instead. In this scenario, payments would only be triggered if a tenant had no other housing options, including family, nonprofits, or other landlord-owned units.

The new ordinance comes in response to last year’s case involving Holmes Apartments, where dozens of units were red-tagged and residents were placed in emergency hotel stays. At the time, the city had no legal means to recoup the relocation costs. Although the city sued the property manager, Simtob Management, the matter ended in a settlement that covered just over $10,000 in hotel bills.