Economic pressures threaten waves of change on St. Paul’s West Side
Gensesia Williams felt like she’d found a housing oasis when she came to St. Paul’s West Side in 2016. The neighborhood had long welcomed generations of newcomers to the Twin Cities with a reputation as an affordable refuge for new immigrants and low-income workers.
Williams counts herself lucky to be a West-Sider. These days, she fears that refuge is in peril. Economic pressures are threatening to push out many of her low-income, mostly Latino neighbors.
Layers of crises are stacking up now against those longtime residents: the COVID-19 pandemic, a flagging economy, a hot housing and rental market, and the fears of foreclosures and evictions that have been put off over the past year.
Some veteran West-Siders see the beginnings of a gentrification wave they worry may leave many low-income residents with nowhere to go if the pandemic-related eviction moratorium isn’t extended. It’s currently set to expire May 14, although there are efforts in the Legislature to extend it.
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”I think we’re going to see a lot of folks displaced,” Williams said.
“It shouldn’t need to take small miracles or luck for people to be able to have housing, and so I am worried about my neighbors.”
Hoping to keep people in their homes, community organizations have come together to launch a St. Paul rent stabilization campaign. While the initiative has early support from some landlords and politicians, it remains a controversial strategy, and not everyone is on board.
‘Some people call it gentrification’
Low-income families on the West Side have faced economic challenges before, but recent state and community reports show the magnitude of the current problems and how they’re spread across the region.
A recently published state of Minnesota housing “scorecard” concluded that “families struggling to make rent and mortgage payments face an imminent risk of eviction and foreclosure when state and federal moratoria expire,” describing the current situation as “a tidal wave on the horizon.” Potential fuel to the fire are lease non-renewals.
It also noted “lower-income renters face a shortage of housing that is affordable, despite an overall increase in vacancies.”
An analysis by the Minnesota Compass research project found that 30 percent of homeowners and nearly 70 percent of renters in St. Paul spent more than a third of their income on housing costs between 2015 and 2019.
On the West Side, about half of renters and homeowners are similarly “cost-burdened,” according to the nonprofit West Side Community Organization. Black, Indigenous and households of color are disproportionately renters in the state.
Latino people have been deeply affected by business closures and layoffs, working in the restaurant and hospitality industry, according to the Minnesota Council on Latino Affairs. Those jobs haven’t returned completely, making the economic circumstances more uncertain as eviction moratorium off-ramp discussions start.
Williams, 34, said her neighborhood is historically Latino with many immigrants and people who speak Spanish as their first language, which can make it challenging to speak to landlords about building maintenance or rent.
She counts her college education, communication skills and the fact that English is her first language as privileges that allow her to navigate that terrain. She said she found her home despite a prior eviction on her record in part because she was able to talk through her circumstances with a sympathetic property manager.
She knows for many of her neighbors, that’s not possible: “If I was coming from a different country, I would not be fussing with my landlord, right? Because I want to make sure my family is safe.”
That concern is real, said West Side Community Organization Housing justice organizer Charlotte Colantti.
“I’ve seen buildings where, because of that kind of language barrier and exploitation of that language barrier … the Latinx tenants in the building would be paying on average significantly higher [rent] than their white counterparts in the building, who might have been able to negotiate rental increases with the landlord,” said Colantti, 26.
State Rep. Carlos Mariani, 63, who has lived on the West Side bluffs for more than 30 years, said that the neighborhood has remained culturally diverse in that time, welcoming immigrants from Mexico, Central America, East Africa and Southeast Asia.
In the last few years, Mariani said there’s been an influx of young white people.
“A lot of white folks, from either Minneapolis, or from the suburbs or perhaps other states,” some with young children, he said. “I guess some people call it gentrification. It certainly feels a lot ‘whiter’ if you will, than it has been for many, many years.”
Mariani recalled a recent visit to Cherokee Heights Elementary School in the heart of the West Side, where the fifth and sixth grade students were mostly Black, Indigenous, Asian and Latino while the younger grades, like kindergarten, were predominantly white.
“It kind of blew my mind because that’s not the pattern that one would typically find,” Mariani said. “But I think it just shows that rapid change that’s been happening.
Enrollment data from the St. Paul Public Schools shows the number of white students enrolled at Cherokee Heights has increased from 12 percent in 2011 to 31 percent in 2020. The number of Latino students decreased from 50 percent to 30 percent over the same period.
‘Anything to protect me?’
Local activists have made keeping people in their homes a priority, but building consensus on how to do that has not been easy.
The group Housing Equity Now St. Paul has launched a campaign to put rent stabilization in front of voters this November. The group is working to collect 10,000 signatures by June 15 to put the initiative on the ballot.
What started as organizing around tenant protections became a ballot effort that would cap annual rent increases at 3 percent for all rental units in the St. Paul, even if a unit is vacated, said Tram Hoang, 28, a former St. Paul renter and a policy advocate with the Alliance, one of the organizations that make up Housing Equity Now St. Paul.
Hoang said activists heard from tenants who applauded the tenant protection and then asked, “‘Is there anything that’s stopping me from getting priced out of my home? Because my rent is increasing like $100, $200 a time. I’m on a fixed income. Is there anything to protect me from that?’ And there isn’t anything.”
Rent stabilization is different from rent control. According to a 2019 research brief published by the Urban Institute, rent control generally means a landlord can’t raise the rent at all until a person moves out of their home. Rent stabilization allows for rent increases while a tenant is living in their home. However, the authors acknowledge that “exact definitions vary.”
The St. Paul proposal stipulates that the cost to rent a unit may not increase beyond an annual 3 percent cap even if a tenant moves out. The regulation would apply to all rental properties in St. Paul. The language, if voters approved it, would make it one of the more comprehensive regulations in the country.
The results of rent control and stabilization measures elsewhere have been mixed.
A 2019 research paper published by the Urban Institute found “some evidence that rent control negatively affects maintenance,” meaning landlords are less likely to keep their properties in good shape, but “its effects on new construction remains speculative.”
A 2019 paper published by the American Economic Review found that a 1994 rent stabilization expansion in San Francisco was beneficial to people living in regulated units but also drove up prices in unregulated units. In part because of loopholes, including applying regulations to certain types of housing based on when they were built.
‘We need good places to live’
The state organization representing landlords opposes the St. Paul proposal, saying it will worsen the situation.
“We need to produce the housing for future renters for the growth of our population. And rent control dissuades investors from doing that,” said Cecil Smith, 52, CEO of the Minnesota Multi Housing Association. “The concerns that we have about rent control are very real in terms of having a market that's going to be able to work well and produce more housing.”
“Rent control does not make housing more affordable. It does for those who are in the rent-controlled units,” said Smith, a landlord and rental property manager in Minneapolis. “I’ll concede that those who get to have a rent-controlled unit, sure. But for the next generation of renters, it’s terrible, it’s a disaster for them.”
Smith doesn’t support rent control or stabilization.
“We need a housing production revolution. We need to produce housing,” he said, adding that he believes greater access to cheaper land held by the government and less regulation are answers to Minnesota’s affordable housing issues.
Community organizers and developers have shown some success working together.
The West Side Community Organization spent two years working with neighborhood residents to create a scorecard that would help real estate developers and West Side residents work together to create housing. This includes, among other goals, ensuring affordable units are part of a project and that West Side businesses are given priority when seeking a lease in a development.
When Sherman Associates redrew their plans for an expansion to their West Side project, they developed the project using the scorecard’s goals and objectives.
The West Side Flats expansion projects being built by Sherman Associates will create 171 market-rate units that will be available in spring 2022 and 82 affordable units, which are set to be completed and open in fall 2021.
Mariani supports the St. Paul rent stabilization initiative.
“If we care about a combination of opportunity and the incredible diversity of our society, then we have to accept and understand that different income levels is what makes that possible,” he said.
Mariani adds that rent stabilization shouldn’t be viewed as a fixed situation for renters but rather as a way to establish stability and reach greater opportunity, like home ownership, although he does recognize it is becoming harder to buy a home on the West Side.
Asked about property owners who might feel that rent stabilization will curtail their ability to maintain their units or even make a profit, Mariani, who is not a landlord, said: “Making a profit isn’t easy. A good effective business owner, which is what a property owner is, is one that can adjust and adapt their model, their business model, their profit model.”
Maureen Hark is a West Side landlord who’s also active with community groups. During a signature drive on a recent warm day at the Icy Cup restaurant, she signed the petition to put the measure on the November ballot.
“I really like what they’re doing here and I do think it should be capped,” she said. “I mean, I don’t raise rent every year at all. I raise rent every four years or something.” Hark sympathizes with the struggles that increasing rent poses because, she says, “I was a renter. We were all renters at one point.”
She supports the stabilization effort because “we need good places to live, we need safe places to live and we need affordable places to live,” she said.
Hark loves the neighborhood and worries about the accessibility of new housing projects being built on the riverfront.
“That’s prime real estate,” she said. “It’d be a beautiful place to live. Who’s really going to get to live there?”
To get help paying your overdue rent, you can apply through RentHelpMN. If you have questions about eligibility, bills or documents you can dial 2-1-1 for assistance.
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