Tenant organizations ask to intervene in lawsuit challenging St. Paul rent control

A group of St. Paul tenants and nonprofits want a say in a federal lawsuit by landlords challenging the city's rent control ordinance, arguing they represent "the interests of the thousands of citizens" who voted to pass the law last year.

In a motion filed Thursday by attorneys from the nonprofit Housing Justice Center, tenants Katherine Banbury and Angela Wilhight, the West Side Community Organization (WSCO), the Alliance for Metropolitan Stability and HOME Line asked the U.S. District Court of Minnesota to let them intervene in a lawsuit that two St. Paul apartment building owners filed against the city.

The lawsuit, which Woodstone Limited Partnership and the Lofts at Farmers Market filed in June, argues that the city's rent control law violates property owners' constitutional due process and contractual rights. The St. Paul City Council, Mayor Melvin Carter and Department of Safety and Inspections Director Angie Wiese also were named as defendants.

In a memorandum, Housing Justice Center attorneys John Cann and Margaret Kaplan argue that "intervention is critical to assure that the voters' interests, and those of tenants otherwise vulnerable to unjustified rent increases, are vigorously represented in District Court."

"But even more important is the assurance that these interests are represented, if necessary, at the appellate level," the attorneys wrote, pointing to St. Paul officials' decision not to appeal a federal judge's 2021 order to stop enforcing a tenant protection ordinance.

In that case, landlords argued similarly that the law — which the council passed passed in 2020 — violated their constitutional rights. After the judge's initial order, the council voted to repeal the tenant protections, despite urging from advocates to continue defending the measure in court.

The Housing Justice Center attorneys also noted that the council recently approved a set of amendments to the rent control ordinance — including an exemption for new housing construction and affordable units — that were partly geared toward addressing concerns expressed by property owners and developers.

"City government therefore cannot be relied upon to defend the initiative's result with the interest of those who voted for the initiative as paramount," the attorneys wrote.

In an interview Monday, Kaplan said a court order allowing intervention would mean the tenants and nonprofits could file motions and participate in hearings and settlement discussions.

"It really gives people a different voice at the table than what they would otherwise have if they were sitting kind of outside the case," she said. "The organizations and the renters in St. Paul have a really different and specific set of interests than the city of St. Paul and the landlords, ... and the outcome of this case profoundly affects those interests."

WSCO and the Alliance were key members of the Housing Equity Now St. Paul coalition, the group that formed in early 2021 to petition and campaign for rent control. Organizers crafted the ordinance that passed with 53% of the vote and capped residential rent increases at 3% annually.

Attorney Philip Kaplan, who represents the property owners, said they plan to file a response opposing the intervention motion later this week.

"From our perspective, the city adequately represents their interests," he said in an interview Monday. "It would be a mess to allow five new parties into the case, especially at this stage."

Kamal Baker, the mayor's press secretary, said in a statement that the city is reviewing the tenants' and nonprofits' motion to intervene and will respond to the court.

"Prior to the intervenors' filing, the city and plaintiffs agreed to file cross motions for summary judgment to provide the court with the facts and law needed to resolve this matter at the earliest opportunity," the statement said.

In an Oct. 17 motion for summary judgment, attorneys for the property owners asked the judge to stop the city from enforcing the ordinance, saying it is burdensome to landlords and disincentivizes developers and investors from building in St. Paul.

"While the ordinance deprives landlords of their contractual and property rights, with draconian penalties for failure to comply, the ordinance fails to advance its stated goals," they wrote. "The ordinance actually leads to less affordable housing and provides no protection at all to the lowest income tenants."

The plaintiffs and the city are scheduled to have a hearing on their motions for summary judgment on Jan. 30.