St. Paul task force suggests changes to rent-control ordinance

After months of weekly meetings, a group of St. Paul tenants, landlords, homeowners and housing experts delivered a handful of broad ideas for honing the rent control ordinance voters approved last year.

Now the policy's fate lies in the hands of elected officials, who will decide if and how to amend the law capping annual residential rent increases at 3%.

According to a 36-page report from the University of Minnesota's Center for Urban and Regional Affairs (CURA), which facilitated the task force's conversations, 60% of members support a policy that would exempt new housing construction from the law for 15 years and allow landlords to bank rent increases below 3% for future years. They also said they would like a law that prevents renters from being evicted without just cause.

A majority of group members also supported allowing landlords more flexibility to raise rents in between tenants, though the report did not specify how that would work.

In February, Mayor Melvin Carter appointed members of the 39-person group, which he tasked with suggesting tweaks to St. Paul's rent control ordinance that would balance the city's desire for equity and growth.

Minnesota's capital city became the first in the Midwest to implement rent control when voters passed an ordinance by ballot initiative in November. A 1984 state law prohibits local governments from enacting rent regulations unless approved in a general election.

St. Paul's ordinance is considered among the most stringent policies of its kind because it does not allow landlords to raise rents once a tenant moves out, does not exempt new construction and is not tied to inflation.

Upon passage, the law immediately drew warnings from developers and property owners, who said rent control will exacerbate St. Paul's existing housing shortage. Calls for changes to the ordinance drew backlash from supporters, who have said amendments defy the will of the electorate.

Community divisions were captured in the group's at-times heated conversations. The task force met virtually, and for the first eight weeks learned about different rent control policies in other parts of the country. They also gathered public feedback in a survey and online hearing.

"I doubt that the process created political consensus that will bring anyone together who disagreed about rent control," Bill Lindeke, a member of the task force, wrote on the Twin City Sidewalks blog.

Members expressed some confusion about the process in which they voted on policy recommendations, some of which were handled as package deals while other aspects were considered individually.

"I feel disappointed that we probably did not provide the City Council or the mayor's office with information to help make a good decision around this," said Rich Holst, who owns rental properties in St. Paul and served on the task force.

Tram Hoang, who led the campaign to implement rent control, said she has some concerns about the task force's recommendations — including the proposed exemption for new housing, which she says could incentivize property owners to tear down older buildings, which are generally more affordable.

"Am I happy about every piece of the recommendations? I don't think anyone is. That's what compromise looks like," said Hoang, who called CURA's report an "excellent foundation" for policymakers.

Carter on Wednesday said he had not yet read the full report, but he plans to work with the council on next steps.

"What we said from the beginning is we want to be really open and really hear from the diverse group of stakeholders who came and sat around the table," the mayor said.

Policy changes would likely not take effect until more than a year after the ballot measure's passage to mitigate the risk of legal challenges, though the ordinance is already being tested in court. Earlier this month, a pair of property owners filed a federal lawsuit alleging the law violates their constitutional due process and property rights.

Sanneh Foundation founder Tony Sanneh, who co-chaired the task force, called the process "challenging." But he pointed to the unanimous approval of a 12-point set of rent stabilization objectives — which ranged from providing stability to tenants to encouraging the maintenance of St. Paul's rental housing stock — as a success.

"We all have a goal of what we want the city to look like — and we want everyone to thrive, from tenants to landlords," Sanneh said. "The question is: Is it too utopian to actually do?"