The Saint Paul City Council on July 20 approved the first exemption to the 3 percent cap on annual rent increases as mandated by the city’s new rent control ordinance. Landlords Jim and Matthew Lindquist were granted permission for a 15 percent increase in the rent they charge tenants at their 12-unit apartment building at 1029 Raymond Ave.
The Lindquists requested three exemptions to the rent control ordinance, but only one was recommended for approval by Saint Paul legislative hearing officer Marcia Moermond.
The Lindquists purchased the apartment building this spring from a family who had owned it for many years. They sought the higher rent increase to help pay for a long list of deferred maintenance projects. One apartment had been “trashed,” they said, and they also need to replace the building’s roof and renovate garages. They submitted a detailed list of the work needed and the finances required. The building had 2020 income of $135,000. The desired repairs total more than $144,600.
The Lindquists plan to make the renovations over the next three years. According to Moermond, work on the roof and laundry room is already underway and plans are in place to replace appliances, carpets and other flooring as tenants move out.
The council voted 5-0 (Dai Thao and Nelsie Yang were absent) to grant the Lindquists’ exemption for the 2022-2023 leasing cycle, noting the maintenance issues and the fact that the previous landlord had not increased rents for several years. The increase was allowed with the understanding that utilities will be included in the rent.
The City Council denied the Lindquists’ request for a rent increase of more than 15 percent for one of the apartments, which had already been remodeled. The council laid over a third request by the Lindquists for an exemption to the 3 percent cap for the 2023-2024 leasing cycle. The landlord wanted to increase monthly rents between 2 and 15 percent per unit in order to bring them to an average of $1,300 per unit from their current average of $985. That request will be brought back to a legislative hearing officer sometime before March 1, 2023.
Saint Paul officials are anticipating many requests for exemptions to the rent control ordinance’s 3 percent cap. Landlords can raise rents above 3 percent if they can prove they need the increase to cover expenses or achieve a reasonable rate of return on their investment. Landlords can self-certify increases between 3 and 8 percent by making their case to city staff. For increases above 8 percent, they must submit their request to a legislative hearing officer.
— Jane McClure
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