Rent control supporters in St. Paul look forward to May 1 rental cap
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New rent control regulations that are among the strictest in the country take effect Sunday in St. Paul.
The measure, which caps rent increases at 3 percent per year, won approval from St. Paul voters in November.
Unlike rent control laws that have been on the books for decades in places including New York, St. Paul’s measure does not include automatic exemptions for new construction. Also, property owners are prohibited from raising the rent on a unit after a tenant moves out.
On Friday, a group of activists and community members called the May 1 implementation of the ordinance a historic moment as they celebrated the policy during a news conference on St. Paul’s east side. They shared personal stories of experiencing steep rent increases while living on tight budgets.
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Debra Howze, a home care worker and member of the Service Employees International Union, said she struggled to find a place she could afford, and even then, her rent has been rising faster than her pay.
“I love my current place, but recently rent went up $100 per month,” she said. “This is hard on my current wages of $14.60 an hour.”
Cisco Cole said he felt the sting of a $700 per month rent hike when he was a tenant — something he hasn’t forgotten since buying rental property and becoming a landlord. Cole supports the 3 percent cap on rent increases.
“When I decided to buy and to be a landlord, I chose to have a close collaborative relationship with my tenants,” he said. “I consider them part of my community and our community.”
Real estate and landlord groups spent more than $4 million to fight the proposal in St. Paul and a separate measure in Minneapolis that allows the city council there to begin discussions of a rent control ordinance.
Opponents say capping rents will scare off developers and squeeze an already tight supply of affordable housing. The Minnesota Multi Family Housing Association said in a statement that building permits are down sharply at a time when St. Paul needs more housing investment.
Jane Prince, a city council member who represents St. Paul’s east side, cited the example of a nonprofit that she said was about to buy a 100-unit building in her ward and keep the rent low. But the group’s investor pulled out after the election, and a private company bought the building to rent out at market rate.
“Throughout the city, when large apartment complexes sell, it is primarily so that they can be upgraded and rents raised, and as investment opportunities. And that’s where we lose out on a lot of our naturally occurring affordable housing,” she said.
There are exemptions to the 3 percent cap.
Under the rules, landlords are entitled to a “reasonable return on investment.” If the 3 percent cap precludes such a return, landlords can ask that the cap be raised.
Those requesting rent increases between 3 and 8 percent only need to self-certify on a web form. Anything above 8 percent — up to 15 percent — requires approval from city staff.
Mayor Melvin Carter has proposed an exemption for new construction. But because the ordinance was approved by voters, not the city council, it’s unclear how much power elected officials have to amend it.
Prince, who is one of several St. Paul City Council members who oppose rent control, said the earliest they can try is in November – a year after the measure passed.
She said she’s concerned that without changes, the ordinance will destabilize the city’s market for rental housing.
“For my whole career, I’ve been an affordable housing advocate. I didn’t support this. I am hearing from tenants and landlords that this is not working. It’s not good for anybody,” she said.
