Frey: I'll veto 3% rent cap; 'it's not happening'

A day after a task force recommended a plan with a 3% cap on yearly residential rent hikes, Minneapolis Mayor Jacob Frey said he'd veto that idea if it advances to him.

"It's not happening," Frey said Wednesday. "If it moves forward to my desk, I will veto it."

Frey's clear opposition, given in response to reporters' questions, underscores the uncertainty facing the prospect of rent control in Minneapolis as the idea enters its next phase on a potential path to voters.

The issue is heading to the City Council, where a majority of the members would be needed to put a specific policy on the November 2023 ballot. A supermajority of nine would be needed to override a mayoral veto.

On Wednesday, a majority of the 25-member Housing/Rent Stabilization Work Group recommended the City Council adopt a plan that would put Minneapolis among the cities with the strictest rent control policies in the nation. The plan is backed by a coalition of renter advocates and activists who see rising rents as a social and racial justice issue in need of transformative changes.

That plan — the one Frey said he would veto — seeks to cap rents at 3% annually, with exceptions only for freshly updated apartments.

That's similar to a measure approved by St. Paul voters in 2021. Facing a backlash from developers and falling residential construction permits, St. Paul has since scaled back its plan.

In 2021, Minneapolis voters approved a ballot question that said the City Council could come up with a rent control plan, but the ballot question didn't prescribe any specifics.

The work group is also poised to send to the City Council a less stringent plan that was supported by 11 of its members, including landlords and developers. That plan would cap rent hikes at between 5% and 7% annually, plus a cushion for inflation, and contains a number of exemptions and exceptions to allow landlords flexibility.

It remained unclear Wednesday where many council members stand on specific rent control ideas.

Frey has not yet weighed the less stringent plan. On Wednesday he said that he hasn't "narrowed in on any specific number," but he restated his general skepticism of rent control.

It's unclear what type of plan might be palatable to him. He said he's "open-minded" and emphasized his desire — in line with the city's long-term vision — to increase its supply of affordable housing.

"The overarching goal is to have beautiful diversity in housing options and beautiful diversity in people in our city," he said.

When it came to the specifics of the 3% plan, he was heavily critical.

"We've got to be listening to data and we've got to be listening to experts. And experts from the far left to the far right have nearly universally stated that policies like the one that was put forward do not work and are actually counterproductive to the state of things."

Supporters of the 3% plan know they have their work cut out for them.

Following Tuesday's work group vote, those supporting the plan echoed a refrain that their task is now to pressure city leaders for support.

Abdifatah Abdi, a renter in Minneapolis and leader with the Muslim Coalition of ISAIAH, said Tuesday that he and other advocates need to "make sure that our City Council members are actually doing the work that we need them to do to deliver that change for our community."

Still, Frey's comments Wednesday drew a rebuke from Jennifer Arnold, co-director of Inquilinxs Unidxs Por Justicia, one of the groups leading the push for rent control and championing the 3% plan.

"We're disappointed," Arnold, a member of the work group, said Wednesday evening. "There's a rental crisis, and the city created a work group, and there's a bunch of stakeholders who rolled up their sleeves and did the work. It doesn't feel like just saying 'no' does anything to stop the crisis. ... He needs to engage. He needs to roll up his sleeves."