More focus sought from rent control task force.

Frustration with the slow pace of implementing Saint Paul’s new rent control ordinance prompted the City Council on March 23 to adopt a resolution asking the 41-member Rent Stabilization Stakeholder task force to narrow its focus.

The ordinance, which establishes an annual 3 percent cap on residential rent increases, is scheduled to take effect on May 1. The City Council on April 6 is poised to approve the technical and administrative changes needed to implement the ordinance.

The 41-member stakeholder group began meeting in March, and is scheduled to complete its work by the end of May. Ward 3 City Council member Chris Tolbert, who represents the council on the task force, said the group needs to better define what it will include in its final report, which is due by July 1.

The City Council is asking the task force for recommendations on how to ensure stable rents and quality affordable housing now and in the future. The council is seeking a recommendation on a possible exemption from the 3 percent cap for new construction. The council would also like the task force to address vacancy decontrol, an exemption that would allow landlords to raise the rent by more than 3 percent whenever a tenant moves out of a unit.

   

The Rent Stabilization Stakeholder task force will hold its first public hearing from 6-8 p.m. Tuesday, April 12. To access a link to the virtual hearing, visit stpaul.gov/rent-group.

The rent control ordinance was approved by voters in a citywide referendum last November. However, Mayor Melvin Carter’s administration did not bring forward the necessary budget and administrative changes until March.

The City Council in March earmarked $635,000 to cover the administrative costs of implementing and enforcing the new ordinance for the rest of 2022. That includes the cost of six staff positions, including three positions in the city’s Department of Safety and Inspections (DSI).

 

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Tenants urge the city not to delay.

The City Council held a public hearing on the implementation of rent control on March 23. More than a dozen comments were received, mainly from Saint Paul renters and advocates urging the council not to delay in putting the measures in place.

Some speakers said they have faced steep rent increases in advance of the May 1 effective date. Home Line, a statewide tenant advocacy organization, reported 87 calls from Saint Paul tenants who have faced large rent increases in the wake of the November referendum. That is almost three times the number of rent-hike complaints typically received in that time frame, according to Home Line organizer Erin West.

West told the City Council about the additional fees some landlords are charging Saint Paul tenants. For example, some landlords who had included utility costs in the monthly rent are now charging for utilities separately, West said.

“The longer we wait to implement these policies, the more harm is being done,” said Merriam Park renter Ann Schulman, who said she saw her rent increase by 9 percent recently.

Exemptions sought from 3 percent cap on rent increases.

Exeter, a Saint Paul-based developer and property management company, testified in favor of broad exemptions to the rent control cap. In written comments, Exeter described rent control as an “ill-advised ordinance that is proving to be a political and economic mess for the city.” Exeter pointed out that since November, new housing permits in Saint Paul are down 80 percent from the previous year. The construction of more than 3,000 affordable and market-rate apartments have been postponed or canceled, Exeter wrote.

Mayor Carter has asked the City Council to consider amending the ordinance with an exemption for new construction. However, under the City Charter, an ordinance adopted by referendum may not be amended for at least a year, or not before November 2022.

City officials are now developing a strategy for educating tenants and landlords about the new rent control policy. A process is also being drafted in how to evaluate the 3 percent cap and determine if any adjustments are needed. Under the ordinance approved by voters, landlords may apply for an exemption to the annual 3 percent cap if they can show that it is needed to realize a reasonable return on their investment. However, it has yet to be determined what constitutes a reasonable return.

DSI is seeking public comment on proposed rules for the Rent Stabilization Ordinance between April 7 and 22. The rules are meant to clarify how the ordinance will be enforced and how landlords may request an exemption to the 3 percent cap on rent increases.

Comments may be submitted via the city’s website at stpaul.gov/rent-stabilization-rulemaking; emailed to rent-stabilization@ci.stpaul.mn.us; or mailed to DSI-Rent Stabilization, 375 Jackson St., Suite 220, Saint Paul, MN 55101. For more information, visit that city website, email rent-stabilization@ci.stpaul.mn.us or call 651-266-8553.

— Jane McClure

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