St. Paul budgets $635K for rent-control staff

St. Paul city officials on Wednesday unveiled a proposal that would provide five full-time employees and funding to administer the rent-control ordinance passed by voters in November.

But as the policy's May 1 effective date looms, many uncertainties remain for St. Paul tenants, landlords, developers and others who say a lack of clarity has prompted a string of reactions, including pre-emptive rent hikes and the pausing of new housing projects.

The City Council voted 4-1 to spend $635,527 to hire five employees — two administrators for the city's Department of Safety and Inspections, a deputy hearing officer and administrator for the council, and a city attorney — to handle requests for exceptions, appeals, complaints and other work related to the ordinance. Council Member Jane Prince voted against the resolution, saying she has not yet heard a plan that justifies the expenditure, and Council Members Rebecca Noecker and Dai Thao were absent.

That money — which is projected excess tax revenue in the city's general fund, according to St. Paul Finance Director John McCarthy — will cover salaries and overhead through the end of the year. The council will have further conversations later this year about how to budget for the policy in 2023 and beyond.

Next week, the council will hold public hearings on technical ordinances that define various terms and charge the Department of Safety and Inspections with the duty of overseeing the rollout of the policy, which caps rent increases at 3% annually.

The city will determine the specific processes for requesting exceptions, appeals, complaints and investigations in April, said Melanie McMahon, an aide to Mayor Melvin Carter.

Residents for and against rent control, as well as council members, have criticized Carter's administration for being slow to start preparations for the ordinance's rollout. A handful testified at Wednesday's meeting.

Tram Hoang, manager of the campaign that petitioned to put rent control on the ballot, said her Housing Equity Now St. Paul coalition and others have received dozens of calls from tenants facing retaliatory rent increases and seeking help.

"We can't keep doing the city's job," she told council members, applauding the allocation of funds as a much-needed step toward a working policy.

Other cities and states with rent control have taken a variety of approaches to implement and enforce their policies, according to a report from the University of Minnesota's Center for Urban and Regional Affairs. For instance, Oakland, Calif., has a 26-person staff with an $8.2 million two-year budget — funded mostly by fee collections — to handle research, hearings and community outreach. Oregon, on the other hand, requires tenants to turn to the courts to enforce compliance.

Council Member Mitra Jalali, who sponsored the budget resolution, said she anticipates St. Paul will need additional staff to help administer its ordinance in the future. Other tweaks are likely as well.

Last month, Carter convened a 41-person stakeholder group that will meet weekly through June to develop a set of recommended changes or additions to the rent-control ordinance.

The mayor has also proposed an amendment that would exempt new housing from rent control for 15 years after it's built, a move that he says will prevent St. Paul from losing thousands of new units. Some council members have said they would like to hear from the stakeholder group before making any changes to the ordinance.

"This is the beginning. We'll learn, and we'll keep improving it," Jalali said. "There will be many questions because that's what happens when you do something new."