Rent control question lands at Minneapolis City Hall, as council members take up issue

Rent control formally landed in the lap of the Minneapolis City Council on Tuesday, as leaders began grappling with a 67-page staff report that recommends against the city adopting either of two rent control policies forwarded by a council-created panel in December.

The report was presented to the council's Business, Inspections, Housing and Zoning Committee, which took no formal action. The issue is before council members because voters in 2021 told them to take it up. But that ballot question didn't prescribe any specific policy.

In order for voters to have a say on any specific policy in November's municipal election, city leaders must approve a ballot question by Aug. 25. Meanwhile, rent control advocates are negotiating with council members in search of a compromise.

Here's what could happen between now and then:

City Council

It's unclear exactly how the City Council will proceed with the issue, but it likely will be a spirited debate. The 13-member council is divided on how much the city should limit rent increases, if at all.

A progressive contingent of council members supports a plan featuring a 3% annual rent cap, similar to one approved by St. Paul voters in 2021 in what at the time was one of the most restrictive plans in the nation. That plan was approved by a majority of the members on the Minneapolis council's working group, which was charged with hashing out the issue among landlords, renters and advocates.

But that contingent doesn't appear to have enough votes for the entire council to pass it along to the voters.

A minority on the working group pushed a less-restrictive plan, arguing it had better chances of passing the council. It's unclear how much support that plan might have.

Mayor Frey

If a majority of the council approves a plan to be forwarded to voters, it first has to get past Mayor Jacob Frey. He already has said he would veto the 3% plan and is generally skeptical of rent control. He hasn't weighed in on the less-restrictive plan.

It's possible that a game of political ping-pong could emerge in the coming weeks or months, with a slim majority of council members approving plans that Frey would then veto.

It's also possible that a supermajority of council members — at least nine of the 13 — could override a mayoral veto. And it's possible Frey and a majority of council members could agree on something.

Barring such an agreement, intense lobbying could break out, including public demonstrations over an issue that has become a major cause for social justice advocates in a city where most residents are renters.

Pros and cons

The arguments for and against rent control, or rent stabilization, are well established.

Broadly speaking, supporters see limiting rent increases as a way to protect working-class and poor people from getting priced out of their homes, a dynamic that exacerbates the city's homelessness problem. Rising rents disproportionately burden people of color.

Meanwhile, opponents argue that artificially capping rents stifles the quality of rental housing, as well as the quantity. They say rent control would result in a paucity of units and only drive rents up, disproportionately burdening people of color. The staff report presented Tuesday to the City Council's Business, Inspections, Housing and Zoning Committee essentially supported this argument.

Some who were open to rent control got spooked when they saw what happened after rent control was enacted in St. Paul, which witnessed a sudden drop in rental housing construction amid backlash from developers and landlords. St. Paul leaders then loosened their policy, including making exceptions to the 3% cap.

Compromise?

Advocates for rent control said Tuesday they're optimistic they can find support among a majority of council members for a plan that falls somewhere between the two positions that emerged from the working group.

"We are working hard at building a compromise that we hope to announce soon," said Jennifer Arnold, co-director of Inquilinxs Unidxs por Justicia (Renters United for Justice), a Minneapolis coalition pushing for rent control.