Mayor Melvin Carter seeks to exempt new housing from rent control in St. Paul

St. Paul Mayor Melvin Carter said he will ask the City Council to exempt newly constructed housing from the city's rent control ordinance, adding to the flurry of questions surrounding the policy passed by voters last week.

Housing advocates successfully campaigned for the 3% cap on annual rent increases, which has been described as one of the most stringent rent control policies in the nation. Opponents have warned the policy could exacerbate the city's housing shortage by discouraging new development and prompting landlords to convert rental units to condos.

After last week's vote spurred some developers to say they're pausing St. Paul projects, Deputy Mayor Jaime Tincher sent an e-mail to the City Council on Monday saying Carter would approve an amendment specifying that new housing construction isn't subject to rent control.

"The ordinance language as written is silent on new construction and specifically establishes an exemption for a reasonable return on investment," Tincher wrote. "Allowing for a reasonable return on investment is why virtually every other rent control ordinance in effect today exempts new construction."

Carter has not indicated what such an amendment might look like, nor has he responded to concerns that changing the ordinance could expose the city to lawsuits. Last month, the City Attorney's Office said the council likely cannot make any "substantive" changes to the rent control ordinance in its first year, and changes after that increase the risk of litigation.

Council President Amy Brendmoen said she was surprised to hear Carter suggest amending the ordinance.

"If he's got a real plan and a real legal path, the council will take it up. But until then, we've been told our hands are tied," Brendmoen said.

Carter declined a request for an interview Monday. His spokesman, Peter Leggett, said in a statement: "The mayor looks forward to engaging with stakeholders from across our community, as well as an amendment to exempt new housing construction, which he will sign once it reaches his desk."

Council Member Chris Tolbert, who with Brendmoen opposed the ballot measure, said "the mayor would need to come talk to us about what he is proposing" before he could approve any sort of amendment.

"We have to respect the will of the voters," Tolbert said.

The council expressed frustration with Carter's administration Wednesday about the uncertainties surrounding the ordinance and its rollout. Conflicting language about whether the ordinance goes into effect immediately or in May makes it unclear whether tenants could challenge landlords who try to impose large rent hikes before the spring.

After refusing to take a stance on the ballot measure for months, Carter announced his support for rent control three weeks before Election Day in a statement saying the ordinance needed to be made better quickly. Some suggested the mayor's endorsement helped tip the vote toward passage.

"I think a lot of people took him at his word that he could change it," said Shannon Watson, spokeswoman for the St. Paul Area Chamber of Commerce, which opposed the measure. "I don't know how far down that path they're legally able to go."