The Minneapolis City Council is considering whether they should move forward on another controversial step to protect tenants: rent control.
Earlier this month, the council directed staff to find consultants to study the effects of rent control in Minneapolis. Advocates say limiting landlords’ ability to raise rents would help keep housing affordable and avoid displacement of residents. Property owners have said rent limits would stymie the market and keep them from being able to invest adequately in the homes they provide.
A 1984 Minnesota statute prohibits local governments from adopting rent control policies unless voters approve it in a general election. It was adopted after a showdown over a proposed rent cap in Minneapolis.
Council Member Jeremiah Ellison, who co-authored the staff direction with Council President Lisa Bender, said they’re looking for someone “to do a competent market analysis to help us understand what a rent control policy would mean for Minneapolis.” He pointed out the council hired consultants when considering policies around the $15 minimum wage and inclusionary zoning.
“Right now, we’re not having the ‘Can we, can’t we’ conversation, we’re just trying to explore the ‘should we, shouldn’t we,’ ” Ellison said. “If we get back policy analysis that says rent control is an awful policy and it wouldn’t solve any problems, then it’s not something that we would be pursuing.”
The council has no draft ordinance or other details about how rent control could work in the city, or had no information on which consultants they would use or how much they would cost. The council’s Housing Policy and Development Committee is expected to receive an update about the consultant search Nov. 13. Staffers must have a contract in place by March 15.
The consultant would be required to report back on various issues, including rental cost trends, vacancies and turnover, the location and age of available housing, among other data. They would also need to study the short- and long-term effects of this policy on the housing market and local economy. They would also be tasked with looking at how tenants and property owners will be affected, including potential return on investment for property owners and stable housing for renters.
Rent control is most often implemented as limited rent increases, said Edward Goetz, director of the University of Minnesota’s Center for Urban and Regional Affairs. The newfound momentum for rent control among city leaders nationwide is part of a larger set of policies to curb displacement. Goetz said those plans often include building more subsidized affordable housing and renter protections.
“I find it remarkable we are actually thinking about it, that we’ve gotten to a point of the housing crisis that policymakers are no longer so immediately dissuaded from thinking about something like rent control,” Goetz said.
Rent control would be another regulation that property owners in the housing market would have to absorb and may have unintended consequences, said Cecil Smith, principal and managing broker with Cornerstone Property Professionals, a Minneapolis property management company. He pointed to the city’s push for changes to the tenant screening process that property owners are still processing. So far, the Minnesota Multi Housing Association, the organization that represents landlords in the state, said it has not heard from council members about the possibility of rent control being on the table.
“We haven’t been invited to a conversation on this,” Smith said. “We hope we are in a normal course of public engagement, community engagement and a full public debate on the subject, we’d be invited.”