The St. Paul City Council on Wednesday unanimously approved the wording of a rent control ballot measure residents will consider at the polls in November.
Now, groups for and against the initiative are gearing up to lobby for votes on the proposal to cap rent increases at 3% annually.
A coalition of housing advocates gathered about 5,600 signatures in the spring and early summer, more than enough to place the policy decision in the hands of the electorate.
St. Paul voters will be asked: "Should the city adopt the proposed ordinance limiting rent increases? The ordinance limits residential rent increases to no more than 3% in a 12-month period, regardless of whether there is a change of occupancy. The ordinance also directs the city to create a process for landlords to request an exception to the 3% limit based on the right to a reasonable return on investment."
If enough residents vote "yes," St. Paul will adopt the ordinance. Minnesota state law says cities wishing to institute rent control laws must allow the public to vote on the proposal in a general election.
Minneapolis residents will also be asked to weigh in on rent control in November, though the city's charter does not allow voters to enact ordinances through ballot initiatives. Instead, the ballot question will ask voters to give the City Council power to adopt a rent control ordinance.
The Keep St. Paul Home campaign, borne of the coalition of housing advocates that gathered petition signatures, is holding a kickoff event at 6 p.m. Thursday at Lake Monster Brewing.
"We have to realize that if landlords have the ability to increase rent however they want, that's what allows for the displacement of well-off renters and renters of color in our city," campaign manager Tram Hoang said, referencing a recent report from the Urban Institute that linked the Twin Cities' high racial homeownership gap to large investors snapping up single-family rentals.
Supporters of the ballot measure plan to launch efforts to register voters and educate them on the St. Paul proposal to combat "decades of misinformation from landlord lobbies telling people that rent control is bad," she said.
"What we're doing is rent stabilization," Hoang said. "It acknowledges that fluctuations happen. But the changes have to occur at a pace that is humane and at a pace that people can adapt to."
Advocates who drafted the policy said they agreed on the 3% cap because a University of Minnesota study showed that would cover the median rent increase for the area in recent years. Landlords could also request an exemption if they need to raise rents more to cover a jump in property taxes or capital improvements.
Opponents to the proposal have pointed to economic studies showing that rent control has exacerbated other cities' affordable housing crises by disincentivizing rental ownership — possibly leading to a more competitive rental market and less interest from developers.
Those who continue to own rentals might also be less likely to spend on upkeep if their profits are capped, said Mark Mason, president of the St. Paul Area Association of Realtors.
"We understand the issues. We want to do things to address them," he said. "We just think there's a different path to get there," including increasing the housing supply, density and rental assistance.
Mason said he wouldn't be surprised if the Realtors' association did an ad campaign to tell voters about the potential downsides to rent control. The Minnesota Multi Housing Association, which represents landlords, is also preparing to launch some opposition efforts.
Mayor Melvin Carter has not taken a public stance on the issue. If passed, the ordinance would take effect in May 2022.