Twin Cities landlords and property managers are urging Minneapolis and St. Paul voters to reject rent control proposals on the ballot this fall, saying the measures would decimate an already tight housing market.
While supporters of the distinct proposals in the two cities say rent control would bring stability for low-income renters — who may see sharp year-to-year rent increases that force them to find a new place to live — opponents say housing supply is the biggest barrier to affordability and that rent control would limit or discourage new construction and investments in existing properties.
"Rent control has been proven in cities across the world to reduce availability of housing, and the quality of housing," said Cecil Smith, Minnesota Multi Housing Association (MMHA) president, at a news conference Tuesday. "This has only deepened the challenge for low-income residents in those cities to afford a place to call home."
Representatives from eight housing organizations, including MMHA, gathered outside the North Central States Regional Council of Carpenters building in St. Paul to announce the formation of the Sensible Housing Ballot Committee Coalition and to urge voters to vote "no" on the ballot initiatives.
The local construction economy will suffer if rent control is enacted, said Adam Duininck, director of government affairs for North Central States Carpenters, which represents more than 1,500 Minnesota carpenters.
"When you think about St. Paul, right now we're on the cusp of a lot of opportunity: opportunity at the Highland Bridge, opportunity at Midway, opportunity at Hillcrest," said Duininck, a former Metropolitan Council chairman. "All this potential development can slow down, stop or come to a halt."
Coalition members — including the MMHA, the St. Paul Area Association of Realtors and Minneapolis Area Association of Realtors, the Minneapolis Downtown Council and Minneapolis Regional Chamber — said they aren't aware of any definitive plans for property developers to pull out of St. Paul or Minneapolis.
But some have put purchase agreements on hold until Election Day, Smith said, or have written clauses into purchase agreements that could change depending on the election results.
Though both cities have rent control initiatives on the ballot, they would do different things if approved. The Minneapolis proposal would allow the City Council to enact a rent control policy — the details of which have not been established — while the St. Paul proposal would limit rent increases in the capital city to 3% a year.
About 200 municipalities in the U.S. have some form of rent control. St. Paul's proposed policy is unique in its lack of exemptions for new construction or inflation.
Tram Hoang, campaign manager for Housing Equity Now St. Paul (HENS), which wrote the St. Paul proposal, said voters won't fall for fear mongering from groups that have benefited from low housing stock and rising prices. The coalition's formation less than a month before the election shows that there's momentum in support of rent control, she said.
"Research shows that rent stabilization works to stabilize housing for low-wealth renters and renters of color across the country, which is why cities continue to pass it and why we're certainly not the first," Hoang said.
Smith pointed to cities like New York and Mumbai as examples of where rent control may have worked for the generation that enacted it but did not benefit future generations who found apartments still occupied when it came time for them to find a place to live. Hoang countered that long-term occupancy — to raise a family, for example — could be seen as a good thing.
Most of New York's housing stock is subject to a modernized rent control policy less stringent than what was put in place in the 1970s, said Ed Goetz, director of the Center for Urban and Regional Affairs (CURA) at the University of Minnesota, which released a study on the potential effects of rent control in Minneapolis earlier this year.
"One of our findings is that there is evidence from studies that show that at some level there is a decline in quality of the housing, but it's mostly a cosmetic and amenity-level decline," Goetz said.
Minneapolis City Council Member Jeremiah Ellison, who wrote the Minneapolis proposal along with Council President Lisa Bender and Council Member Cam Gordon, said it's impossible to say definitively how a rent control policy that has yet to be conceived would affect the city. Should the ballot measure pass, the council would craft and enact a policy using input from community members and research such as the CURA report, he said.
"If you pass a bad rent control policy, then you're going to have bad results," Ellison said. "And if you pass a good policy, you're going to stabilize people in their homes, and you're going to provide more affordable housing and more stable housing for thousands and thousands of people in your city."
St. Paul Council Member Jane Prince, who spoke at the news conference, said in an interview that she is not against Minneapolis' policy, which she said will allow for more community involvement. But St. Paul's policy as written would be "devastating," she said.
"We can't afford to have new construction stop," Prince said. "I've talked to developers who say this is a very worrisome ordinance."
Rent control proposals
City of St. Paul
City Ballot Question 1
Whether to adopt a Residential Rent Stabilization Ordinance
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. A "yes" vote is a vote in favor of limiting rent increases. A "no" vote is a vote against limiting rent increases.
City of Minneapolis
City Ballot Question 3
Authorizing City Council To Enact Rent Control Ordinance
Shall the Minneapolis City Charter be amended to authorize the City Council to regulate rents on private residential property in the City of Minneapolis, with the general nature of the amendments being indicated in the explanatory note below, which is made a part of this ballot?
This amendment would:
Authorize the City Council to regulate rents on private residential property in the City of Minneapolis by ordinance.
Provide that an ordinance regulating rents on private residential property could be enacted in two different and independent ways:
a. The City Council may enact the ordinance
b. The City Council may refer the ordinance as a ballot question to be decided by the voters for approval at an election. If more than half of the votes cast on the ballot question are in favor of its adoption, the ordinance would take effect 30 days after the election, or at such other time as provided in the ordinance.