It’s now illegal in St. Paul for residential landlords to raise their rent by more than 3 percent a year, after voters on Tuesday approved a rent control measure that’s among the strictest in the country.
The law applies to both new and existing homes and bars landlords from making dramatic rent hikes between tenants.
Supporters of the measure gathered more than 9,000 petition signatures to put it to voters, 53 percent of whom voted yes.
Tram Hoang managed the Keep St. Paul Home campaign. Hoang said the passage of rent stabilization is a game-changer, particularly for those living on tight budgets.
“We had talked to so many people across the city, specifically low-wealth renters and renters of color who have experienced displacement, who have fears of having to move their kids into a new school district for the fifth time this year, just because their rent went up.”
The new regulations in St. Paul are unlike the rent control measures that have been in effect for decades in other cities, Hoang said. There’s no dollar amount cap on rent increases, nor are there automatic exemptions for new construction.
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And landlords are still bound by the 3 percent limit on annual rent increases even after tenants move out. Hoang says this is meant to stop property owners from evicting someone just to hike up the rent on the next tenant. The new policy does allow landlords to apply for exemptions in order to maintain a “reasonable return on investment.”
Margaret Kaplan with the Housing Justice Center predicts the measure will have little effect on owners of small apartment buildings and duplexes, most of whom, she says, keep rent increases to a minimum. Kaplan said the new law is aimed at big property owners that have bought up rental homes across the country.
“This is a disruption of a really harmful business model that has taken ownership and control out of communities and into some of these national real estate investment trusts,” Kaplan said.
Activists succeeded in passing the ordinance even though their opponents had far more resources. A coalition of property owners, investors and national real estate lobbying groups spent $4.3 million to fight the measure in St. Paul and a similar one in Minneapolis that voters there approved by the same margin.
The Sensible Housing Ballot Committee, an anti-rent control group, said in a statement that the passage of both questions is disappointing.
The North Central States Regional Council of Carpenters was part of the opposition. The group’s government affairs director Adam Duininck said the new regulation may push developers out of St. Paul. He says this could hurt people who work in the construction trades and squeeze the already limited supply of homes.
“We don’t want a hollowed-out city, where we have people that do not want to spend resources in Minneapolis and St. Paul, but they’re OK looking at projects elsewhere,” Duininck said. “And that’s the concern about putting up a policy wall saying, ‘We’re going to do things one way in Minneapolis and St. Paul and not another way in the rest of the region.’”
St. Paul Mayor Melvin Carter said before the election that he would vote in favor of rent control, but that the proposal as written needs to be made “better, quickly.” Because the measure won approval from voters, it’s unclear whether city leaders have the power to change it.
Council members have yet to set up an enforcement mechanism, but the measure gives tenants the right to sue their landlords if they violate the new law.
By contrast, the ballot question that Minneapolis voters approved on Tuesday is just a starting point. It merely authorizes the City Council to pass a rent control ordinance in the future.
Advocates for renters say they’ll push Minneapolis City Council members to approve a measure similar to St. Paul’s. Rent control opponents are also turning their attention across the river, where they have an ally in the mayor’s office. Mayor Jacob Frey, who won re-election, says he’s opposed to putting caps on rent.