Minneapolis voters could decide whether to impose rent controls on landlords

The Minneapolis City Council is reviving a hotly contested idea to address the housing crunch: rent control.

Council Members Jeremiah Ellison and Cam Gordon and Council President Lisa Bender introduced two charter amendments that would ask voters to cap rent hikes in Minneapolis, a move they say will protect tenants in the city from "egregious and unaffordable rent increases."

The council will hold a public hearing at 1:30 p.m. Wednesday about the proposals and could vote as soon as Friday to send the "rent stabilization" amendments to the Minneapolis Charter Commission for review.

While rent control has been around for years in some large American cities, it's gaining traction nationwide as more cities grapple with a tight housing market. In Minneapolis, city leaders have imposed new regulations and boosted spending to combat a shortage of affordable housing, which they say has led to a homelessness crisis that disproportionately affects people of color.

City leaders said the proposed initiatives are critical to protecting vulnerable renters from housing costs that have risen faster than their income. The proposed amendments would give the city the power to impose a rent control ordinance or put a question on a future ballot, or to let Minneapolis residents petition to put a rent control question on the ballot. Meanwhile, the city has offered no specifics on how the proposed ordinances would work.

More than half of the population in Minneapolis rents, according to the city. And more than half of them earn less than 60% of the area median income.

"While a lot of residents in the city have been able to enjoy manageable increases in their rent, the steepest and most unmanageable increases have come to our poorest residents, primarily our black and brown residents," Ellison said.

Opponents of rent control argue the proposed amendments would have unintended consequences, including decreasing the supply of affordable housing in the city.

"We're experiencing supply and demand pressures in the housing market right now," said Todd Walker, president of the Minneapolis Area Realtors (MAR), which represents about 1,000 Minneapolis Realtors. "[The restrictions] would only exacerbate the rental market."

In a statement Tuesday, the Minnesota Multi Housing Association, which represents property owners, called rent control a "proven failed policy" that "leads to disinvestment, higher rents in the uncontrolled market, and loss of rental units."

Capping how much landlords can charge their tenants is not an easy feat. A 1984 Minnesota law prohibits local governments from adopting rent control ordinances unless approved by voters in a general election. At least 51% of voters must vote in favor of it.

Before that, the proposed amendments have to go through several steps, including an approval by the council and then a review by the court-appointed Minneapolis Charter Commission. The commission has 150 days to make a recommendation to the council for final approval — which is expected some time in August — before it appears on the November ballot. The council can accept or reject those recommendations.

The study found that imposing restrictions on landlords provides greater stability for tenants, with little evidence that rent control programs have a negative impact on the production of new housing stock. This is largely because most rent control programs exempt new constructions, the study finds.

But the report also showed that rent control ordinances can lead to a loss of rental units in the local market, either through conversion of units to condos, or through the demolition and reconstruction of new units.

Ed Goetz, a U professor and CURA director, told the council Tuesday that between 2006 and 2019, low-income earners saw an increase in their rents and not their incomes. Those with the highest incomes saw a significant increase in incomes, but not rent.

Goetz said a more detailed version of the report is expected to be released in a week.

Ellison, Gordon and Bender are also pushing an ordinance that would protect renters from unjust evictions. Formal introduction is likely later this spring.