Minneapolis Mayor Jacob Frey says he opposes rent control ballot measure

City Council members who want rent control in Minneapolis will have to overcome the opposition of Mayor Jacob Frey, who says capping a landlord's ability to raise rents won't solve the housing crisis.

To protect tenants, particularly people of color from being priced out of the city, the council is pushing two charter amendments that would ask voters to cap rent hikes. A proposed charter amendment would allow the city to either impose a rent control ordinance if approved by voters or put the issue on a future ballot.

A separate measure would allow Minneapolis residents to petition to put a rent control question on the ballot.

Frey opposes the latter, saying it would open the city to a continuous stream of flawed policies that "negates the policymaking process and reduces the issue to a simple yes or no."

"I do not support policymaking, especially for complex initiatives like this one, through initiative and referendum," Frey said. "It's critical right now that we rely on a data-driven process to evaluate policy options and that includes any form of rent control."

The mayor did not want to comment on the proposed amendment that would give the city the power to impose a rent control ordinance. He said he hasn't seen any language on how it would work. Council members said they want to first allow voters to approve the proposals before deciding the specifics of a rent control program.

Frey said that he does not support rent control "in its classic form" because it disadvantages future renters and does not help make housing affordable beyond those individual units.

"[Rent control] has been pretty widely shown by economists to not work," Frey said, referring to New York City's model. "We know what works. We have put in record amounts of funding to both produce and preserve affordable housing units and we in return saw record amounts of production and preservation of those affordable housing units."

The mayor said he favors giving landlords up to a 40% break on their property taxes if they keep at least a fifth of their units affordable to people whose household income is less than 60% of the area median. That program, which was crafted by city and state housing experts, he said, has been successful at supplying and preserving affordable housing units.

The two rent-control proposals are being reviewed by the Minneapolis Charter Commission before it goes to the council for a final approval. If the council passes the proposed amendments, the mayor has the power to approve or veto them. The 13-member council would then need nine votes to override that veto.

The long-running debate over rent control in Minneapolis became more urgent in 2010 when the number of renters surpassed homeowners. The growing mismatch between housing supply and demand and an increase in overall rent costs have led to a housing crisis.

Housing advocates say a cap on rent will help avoid displacement and keep housing affordable.

"I'm really excited about the conversation," said Brit Anbacht, a volunteer with Neighbors for More Neighbors, a group that advocates for a more densely populated Minneapolis. "It's important that we have a more secure housing in the Twin Cities."

In a statement Wednesday, the Minnesota Multi Housing Association, which represents property owners, said more regulation means less investment in affordable housing in the city, displacement of renters and property taxes shifting onto homeowners. And that "[city leaders] should all reject [rent control] and focus on producing more housing, lowering the costs and taxes on rental property in the city."

In recent years, the city has enacted policies to encourage the construction of more affordable housing and limit rent hikes in Minneapolis. They include the Stable Homes, Stable Schools program, which gives housing subsidies to homeless elementary students' families, and subsidizing landlords who provide affordable units.

Council Member Cam Gordon, who introduced the two charter amendments with Council Member Jeremiah Ellison and Council President Lisa Bender, said conversations about capping rent hikes would be meaningless if they don't put it on the ballot first. A 1984 Minnesota law prohibits local governments from adopting rent control ordinances unless approved by 51% of voters in a general election.

Gordon agrees that a ballot initiative can be "cumbersome" and "laborious," but he said in this instance the framing will be specific and would be focused on rent control. Allowing residents to come forward with an initiative, he said, is a great option because the council often fails to address critical issues.

He urged the mayor to look at a recent preliminary report from the University of Minnesota Center for Urban and Regional Affairs, which found that tenants of color bear the brunt of steep rent increases and that rent-control programs can curb displacement.

"In a way, not doing something is probably perpetuating some injustices even longer than we want to, and I think than [the mayor] wants to," Gordon said.

Bender once opposed rent control because she didn't think Minnesota law would allow it. Now she sees a possibility to create a rent stabilization program with charter amendments that give the city authority, and laying out the policy later.

Offering several different options for how to pass a future rent stabilization policy also puts the city in a better position for legal challenges, she said.

"Given all of the other things that we have in place for housing policies now I think the rent stabilization policy makes a lot of sense as part of that whole package of policies," Bender said.

Faiza Mahamud • 612-673-4203