Stephanie Ericsson Hinton, 69, is a renter at a senior housing complex in St. Paul who is on a fixed income. She said her landlord wants to raise her rent by almost eight percent.
”I can’t afford to live there, and I can’t afford to move,” Hinton said. “Last month I had to go to the food shelf for the first time in my life.”
The Twin Cities has one of the worst housing shortages in the country, with vacancy rates in the low single digits.
Rent stabilization measures that cap most rental increases at three percent were approved by St. Paul voters last November.
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But city officials have been concerned by what appears to be a decrease in the number of new residential units in St. Paul, according to a report by the U.S. Department of Housing and Urban Development. The St. Paul Pioneer Press has reported that local numbers may contradict that narrative.
Tony Barranco, president of Ryan Companies north region, told the city council earlier this week that rent control measures have brought new construction in the city of St. Paul to a standstill.
”Rent control has never worked to add supply and bring down costs,” Barranco said. “Over the past 18 months, we have wasted so much time and talent debating and implementing a policy that is doomed to fail.”
The city council is now weighing changes to its rent control ordinance. A proposal from Ward 3 Council Member Chris Tolbert would exempt some federally-subsidized housing and would exempt new construction from rent controls for 20 years. That’s five years longer than a working group convened by the city recommended.
Tolbert said the changes he proposed make sure that there’s enough housing available, while also allowing property owners to invest in their properties.
”Really the goal of it is to make sure that we have housing stability in the city of St. Paul, while still being able to produce and reinvest in housing,” Tolbert said. “We need to protect quality, naturally-occurring affordable housing while ensuring that we’re also building new affordable housing as well.”
Tolbert’s proposal would also allow landlords to “bank” increases in years they require rental increases of less than three percent, and to spread the cost of major renovations over a number of years. He said it’s clear that the city needs new housing to keep up with the population.
”We have to respect the direction the voters give, but I also think the voters expect us to continue to improve and take information to help implement their will,” Tolbert said. “Ultimately, at the end of the day, the goal is to ensure that housing stability happens in St. Paul.”
Renter advocates argue that the changes would undercut the rent stabilization measures passed by voters. Ward 4 Council Member Mitra Jalali said the council needs to take more time and analyze data before they take action.
”If you believed the narratives that some developers are saying and some people who are heavily aligned with them, there’s been a complete shutdown of construction and the city has been left for dead,” Jalali said. “It’s just hysterical, I’m sorry, but it is — we have to have a rational discussion.”
Jalali has introduced four amendments to Tolbert’s proposal. She’s proposing that rent stabilization policies remain in effect for people who live in federally-subsidized housing projects. She also wants to put protections in for tenants who are displaced after rent increases, as well as give more notice to tenants whose landlords have asked for exemptions.
”The market getting to do what it wants in the hopes that it trickles down to everybody who needs it isn’t enough. Rent stabilization is creating a baseline, finally, to address that,” Jalali said. “I understand that it’s creating change and it’s creating conversation and conflict. I also think that before that we had an inequitable housing market and we are trying to address that.”
St. Paul Mayor Melvin Carter supports Tolbert’s proposed changes to the rent stabilization ordinance.
The City Council will meet on Sept. 7 to discuss the issue, including Jalali’s amendments. A final vote on the proposal will likely happen in mid-September.