What’s Next for Saint Paul’s Rent Control Ordinance?

How this plays out is important for everyone who calls Saint Paul home.

On November 3, 2021, Saint Paul residents voted 53% to 47% to allow landlords to raise their rents by no more than 3% per year beginning May 1, 2022. This May 1 date is coming up fast and there are still many, many details to work out.

Mayor Melvin Carter has appointed 41 members to an advisory group to make recommendations on how to implement the new ordinance. Obvious questions for the group include:

  1. Will there be a carve-out for newly constructed apartment buildings?
  2. If so, should the same carve-out include a major renovation of dilapidated structures or updating current structures?
  3. Should there be an exemption if a landlord’s property taxes and / or utility bills exceed 3%?
  4. How should the ordinance be enforced?
  5. If there are to be exemptions, what’s the process for getting one?

These questions are critically important for all Saint Paul residents, because the implementation costs of the ordinance will increase the tax burden or put pressure on other areas of the city budget. (Some have estimated the cost to administer the ordinance to be as much as $6 million per year!) We are all in need of clarity, as well as an efficient process for exceptions / exemptions / appeals / administration, etc.

The Mayor’s advisory group will also discuss whether there should be amendments to change the ordinance effective November 3, 2022. Because the ordinance was voted-in by voter referendum, rather than by the City Council, the City Council cannot make any changes effective until after one year i.e. November 3, 2022.

Many of these questions were discussed in detail in our Rent control / stabilization panel held on February 8. You can watch the full discussion on YouTube.

What will the advisory group do?

Beyond considering the questions above, will this group be charged with monitoring implementation? We can learn a lot between May 1 and November 3, e.g.:

  • Will the County Assessor tell us that the number of appeals has gone up based on property values going down while taxes stayed the same or went up?
  • Did the 3% cap actually help solve the problem for low-income tenants?
  • Does the 3% cap actually work to drive-out the institutional landlords?
  • Are landlords actually deferring maintenance?
  • How much revenue is the City losing in development fees/property taxes because of delayed developments?
  • What is the actual cost to administer? What’s the cost/benefit for all this – i.e., maybe a better way to spend $6M a year for affordable housing?

What this group does is critically important to all of us in Saint Paul and critically important for the future of our city. We all need to pay attention.

St. Paul STRONG is championing an advisory group process that’s 100% transparent: Who are these 41 members? How and why were they chosen? Are they representative of all the diverse interests at stake? How often will they meet? Will their meetings be open to the public? Live-streamed? Will minutes be kept and archived? Will the public be allowed to testify – to bring concerns and ideas forward? Will experts be called to testify about the experience of other cities with rent control? Will decisions be made by majority vote? Will contact info for the 41 members be provided?

Transparency and public engagement key to success

Most important for St. Paul STRONG is total transparency: If this process is truly transparent – truly representative of the City as a whole, and gets the public involved – perhaps a consensus can be reached that is better for everyone. A consensus that landlords and property developers can live with, that delivers on the aims of the ordinance for tenants, and that reduces the ambiguity we would all otherwise pay for through lawsuits and case by case exemption requests. Those things are a win for everyone who lives in Saint Paul.

To that end, Saint Paul STRONG will continue to follow developments and encourages the public to weigh in with ideas about what’s next for rent control.

We will be paying close attention to how this issue moves forward. Please follow us on Twitter or Facebook for the latest from Saint Paul STRONG.