Stakeholders agree to exemptions to 3% cap on annual rent hikes.

Following a sometimes acrimonious meeting, Saint Paul’s 41-member Rent Stabilization Stakeholders Group wrapped up more than two months of research and negotiation on June 7 with a package of recommended changes to the city’s new rent control ordinance.

The ordinance, which was approved by voters in a citywide referendum last November, caps increases in the rent charged for residences at 3 percent per year. Among the recommended changes is an exemption for new construction and a provision that would allow landlords who do not raise rents for several years to bank those 3 percent increases and use several of them when they do raise the rent.

The process of developing the recommendations was “difficult and contentious,” according to Ed Goetz, director of the University of Minnesota’s Center for Urban and Regional Affairs. CURA provided support for the stakeholders group. It is now drafting the recommended changes to the ordinance and will present them to the City Council by June 24.

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“I don’t know if anyone is completely happy with the recommendations,” said Tony Sannah, who cochaired the stakeholders group.

“There was a lot of compromising by the renters in this group,” said B. Rosas, who represented renters on the task force. Rosas and others expressed frustration that they could not get more done.

The task force was made up of renters, landlords, developers, bankers, nonprofit leaders and others. The group reviewed the history of rent control in the United States, the various forms it has taken, and the effects it has had on the local economy.

Saint Paul’s rent control ordinance took effect on May 1. By city charter, the ordinance cannot be amended before this coming November.

The 41-member Stakeholders Group split into four smaller groups in late spring and used a consensus process to bring the recommendations forward for a vote. 

The group agreed to landlords’ right to a reasonable return on their investment and to allowing them to prove their need for a higher rent increase to realize that return according to criteria established by the City Council.

The group also agreed to the language for just-cause evictions. Just-cause eviction provisions prevent discriminatory or retaliatory evictions by establishing that landlords can only evict renters for specific reasons, such as failure to pay rent.

One of the most contentious issues was vacancy decontrol, a provision that would allow landlords to raise the rent by any amount whenever a unit becomes vacant. After much back and forth, the group recommended that the City Council consider that provision.

A public hearing on the recommended changes to the rent control ordinance is expected in July. For more information, visit stpaul.gov/departments/mayors-office/rent-stabilization-stakeholder-group.

— Jane McClure

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