Saint Paul voters will be asked on November 2 whether the city should limit private landlords to annual rent increases of no more than 3 percent. Proponents say the measure is needed to keep housing affordable and protect tenants from large increases in rent imposed by “predatory” landlords. Opponents say it will discourage the building of new rental housing and the maintenance of existing rental housing, leading to an even greater shortage of affordable housing.
The Twin Cities have been experiencing a shortage in housing generally and affordable housing particularly in recent years. Tenant advocates contend that rents are rising faster than wages. Some tenants have faced rent hikes topping 30 percent, they said.
“For more and more tenants, housing is becoming out of reach,” said Margaret Kaplan of the Housing Justice Center. “The 3 percent cap is pretty standard for our market. It’s very reasonable, and it gives a level of predictability for tenants and for landlords.”
Rent control ballot question
Should the city adopt the proposed ordinance limiting rent increases? The ordinance limits residential rent increases to no more than 3 percent in a 12-month period, regardless of whether there is a change of occupancy. The ordinance also directs the city to create a process for landlords to request an exception to the 3 percent limit based on the right to a reasonable return on investment. A ‘yes’ vote is a vote in favor of limiting rent increases. A ‘no’ vote is a vote against limiting rent increases.
Andy Anderson has rented in the Midway neighborhood for four years. “I’ve almost lost housing because (rent) is generally over 50 percent of my monthly income,” he said. “A reduction in hours or a job change would make my situation precarious.”
Tom Basgen of Highland Park has lived in five different rental units over the past 11 years. He has been forced to move twice in the face of rent increases he could not afford. “I’m very much in favor of a cap on rent,” he said. A 3 percent cap on annual rent increases would provide stability and predictability for tenants, according to him. “You shouldn’t have to live your life worrying whether or not you can afford housing,” he said.
Landlords are wary, however. Of more than a dozen interviewed, most said the ballot measure could backfire on tenants. Several landlords who own fewer than seven properties said if the ballot measure were approved, they could be forced to sell to large corporations, who may be less inclined to keep their units affordable.
Adam Duininck, director of government affairs for the North Central States Regional Council of Carpenters, said the Saint Paul measure would have a “crippling, chilling effect” on new housing development. “All development will slow down if this is passed,” he said.
Saint Paul’s proposed rent control measure would be the most restrictive in the country, according to some observers. “Rent control in other cities is restricted to certain units or tenants,” according to the Sensible Housing Ballot Committee. “But this measure covers all tenants regardless of income and all rental units regardless of building size. No one knows how much it would cost or how it would be enforced.”
“I agree very much with the goal of the ballot question,” said Jim McCorkell, who with his wife owns five rental properties in Highland Park and Macalester-Groveland, including the duplex they share. “But a hard cap on rent increases wouldn’t have the desired effect.” McCorkell believes that landlords would have to defer maintenance and building improvements because at 3 percent per year rents may not keep up with the rising cost of property taxes, utility bills, building materials and the like.
“It’s not reasonable to be limited to a 3 percent increase per year,” said Merriam Park resident Gisela Peters, who owns and manages half a dozen rental properties. Small landlords operate on thin margins, she said, and have been faced with steep increases in property taxes.
If it is approved by a majority of voters, the ballot measure would take effect in May 2022, giving city officials several months to determine how to enforce the 3 percent limit and when to grant exemptions.
Of the seven members of the City Council, Amy Brendmoen, Jane Prince, Chris Tolbert and Dai Thao are opposed to the measure, Mitra Jalali and Nelsie Yang are in support, and Rebecca Noecker is undecided. Mayor Melvin Carter has not said where he stands. However, even with a majority opposed, the rent cap could not be repealed by the City Council for at least a year.
The majority of Saint Paul’s residents are tenants, said Tram Hoang, an organizer for HENS. The coalition contends that the city is seeing an increasing number of corporate landlords who are imposing large rent increases on tenants. According to HENS, rents have increased in neighborhoods where such new public amenities as better transit have been added.
Housing Equity Now Saint Paul (HENS), a coalition the includes the Housing Justice Center, the Alliance and TakeAction Minnesota, collected more than 9,000 signatures to place the measure on the ballot. The West Seventh/Fort Road Federation, Frogtown Neighborhood Association and West Side Citizens Organization are among the neighborhood groups in support.
The majority of Saint Paul’s residents are tenants, said Tram Hoang, an organizer for HENS. The coalition contends that the city is seeing an increasing number of corporate landlords who are imposing large rent increases on tenants.
According to HENS, rents have increased in neighborhoods where such new public amenities as better transit have been added. Gentrification has been a hot-button issue in neighborhoods along the light-rail Green Line, which opened in 2014.
Leading the charge against the ballot measure in Saint Paul and a similar ballot measure in Minneapolis is the Think Twice About Rent Control campaign organized by the Minnesota Multi-Housing Association (MMHA). That coalition includes the North Central States Regional Council of Carpenters, the International Union of Operating Engineers, Minnesota Realtors, the Saint Paul Area and Minneapolis Area Associations of Realtors, the Minneapolis Downtown Council and the Minneapolis Regional Chamber of Commerce.
MMHA president and CEO Cecil Smith said the ballot measure is “draconian” and “probably the worst solution (advocates) could propose.”
Adam Duininck, director of government affairs for the North Central States Regional Council of Carpenters, said the Saint Paul measure would have a “crippling, chilling effect” on new housing development. “All development will slow down if this is passed,” he said.
Several landlords said they defer or minimize rent increases for longtime tenants, only raising rents when an apartment opens up. The rent control measure would not allow them to do that anymore, they said, since their rent increases would need to be spread among all tenants.
Ramsey Hill resident Will Rolf, who owns and manages more than 70 rental units, believes developers will not build in Saint Paul if rent control passes. “Saint Paul is surrounded by markets where developers can go,” he said. Instead of limiting rent increases, Rolf said, the city should open up more land for multi-family housing construction and add housing of all types while protecting the older buildings that serve as naturally occurring affordable housing.
Ed Conley, co-owner of CCI Properties, said his company has focused on rehabilitating historic properties and keeping their rents affordable. Some of these buildings are in downtown and at the corner of Selby and Snelling avenues. The rent control measure on the ballot would prevent him from making those renovations and holding rents down at the same time. “This would stifle the development I do,” he said.
Dayton’s Bluff landlord Eric Foster supports the ballot measure. “For good landlords, this won’t change things very much,” he said. “It’s really trying to get at the bad actors.”
Several landlords said they defer or minimize rent increases for longtime tenants, only raising rents when an apartment opens up. The rent control measure would not allow them to do that anymore, they said, since their rent increases would need to be spread among all tenants.
Several landlords said their property taxes have more than doubled in the past five years. Joe Hughes of Union Park Management also cited the rising costs of labor, building materials and maintenance supplies. He said the ballot question deserved more discussion with landlords and others before appearing on the ballot. “There are ways to provide more affordable housing,” he said, “but this isn’t one of them.”
— Jane McClure
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