Rent control / rent stabilization is on the ballot in both cities this fall. In Minneapolis, they’re seeking permission to write a rent control ordinance. In St. Paul, there’s a specific proposal.
In Minneapolis, it’s City Question 3 and reads as follows:
CITY QUESTION 3 (Minneapolis)
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:
1. Authorize the City Council to regulate rents on private residential property in the City of Minneapolis by ordinance.
2. 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.
In Saint Paul, it’s City Question 1 (it’s the only city question on the ballot) and reads as follows:
CITY QUESTION 1 (St. Paul)
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.
tl;dr — I would vote yes in Minneapolis, but I’m going to vote no in St. Paul.
I grew up hearing the conventional wisdom that rent control causes housing shortages. This turns out, according to a lot of researchers, not to be true — or at least, it’s not necessarily true. There’s a big study that was done by the University of Minnesota Center for Urban and Regional Affairs, aka the CURA study. The landing page is here and and the entire study is available as a PDF.
But part of why it causes fewer problems now than it used to is that implementation has changed over time (which is why you’ll hear people saying “it’s not rent control, it’s rent stabilization” — they’re trying to draw a distinction between the policies of generations past and the newer iterations.)
In seeking out information on the two proposals I read a number of pieces by local writer and urban geographer Bill Lindeke. Bill is generally in favor of rent control but has very serious concerns about the St. Paul plan. He has a number of posts about it but Diving Deep on Rent Control and Housing is probably the most comprehensive, and I highly recommend reading it. (Also, he tracked down exactly what the proposed St. Paul ordinance would say.)
According to Bill, most of the cities that have passed “rent control 2.0,” the newer style of rent control policies, have built in a couple of exceptions to avoid discouraging people from building new housing:
- You normally exempt new buildings from rent control for 15-20 years. While studies have found that newer versions of rent stabilization haven’t decreased housing production, all the cities they’ve looked at had this exemption. (a) Financing for new buildings is complicated and developers are unlikely to even get the loans they need to put up a new building if they won’t be able to adjust the rent as needed for a few years. (b) It takes several years to build. If the economy tanks while you’re building, you may need to charge lower rent for a while but you may really need to make that up later to cover the costs of putting up the building. (c) The people moving into shiny new buildings are generally fine. They can pay the higher rents while everyone else enjoys improved affordability. (d) People moving into new buildings are almost certainly better off getting to choose from 2000 new units without rent control than from 200 new units with rent control, given that landlords can set the initial rent wherever they want.
- Most cities allow “vacancy decontrol.” What that means is, if you stay in a unit, they can only raise your rent a certain amount per year. Once you move out, though, they can raise the rent on the unit to the market rate, whatever that is. The emphasis is on providing stability for tenants rather than price controls on the market overall. (You want to pair this with strong tenant protection so that landlords don’t just evict tenants in order to raise the rent.)
- Most cities tie the allowed increase to inflation.
Saint Paul’s proposal does not provide an exemption for new buildings and doesn’t allow for vacancy decontrol. It also caps increases at 3%, which is a problem because we’re currently seeing inflation that’s higher than that. There’s an appeal process, but wow having a 3% cap in a year when we’re seeing 5% inflation plus a large increase in property taxes sounds like a setup for a bureaucratic nightmare for everyone involved.
It also doesn’t look to me like Saint Paul’s proposal allows for “banked increases,” where maybe you cut someone a break and don’t raise their rent one year, but the following year you’d be allowed to raise it more than 3% — the problem with not allowing for either vacancy decontrol or banked increases is that you strongly incentivize landlords to raise the rent the maximum every year regardless of other conditions.
The landlord lobby has been yelling a lot about the lack of a pass-through provision. A pass-through provision lets the landlord raise the rent to cover certain expenses, like property tax increases, or “capital improvements” if they spend a pile of money on some sort of major improvement. I’ll be honest: the “improvements” one makes me think about all the people I’ve known with landlords who would 100% add a treadmill to some basement corner, call it a “fitness room,” and raise everyone’s rent, whether anyone wanted a “fitness room” or not. Anyway, both capital improvements and property taxes are grounds for appeal under the proposed St. Paul ordinance (again, you can read the whole thing on Bill’s “Diving Deep” post) but seriously, right now everyone would have grounds for appeal due to inflation and the proposed property tax increase.
I saw an indignant post to my neighborhood Facebook group from a landlord saying that if they couldn’t make as much money as they wanted on the single-family homes they were renting out, they would just sell them. I know that plenty of people out there would rather rent than own, but there could be a lot more affordable houses for first-time buyers than there are, so honestly, a bunch of people who own modest houses in affordable neighborhoods put them up for sale, that sounds okay?
Bill has a post discussing Mayor Carter’s endorsement of the plan, which implies that he thinks they can fix it through the City Council. That’s only a little bit reassuring; I think it would be better to vote the St. Paul proposal down and let them try again with something a little less pre-broken.
Anyway: I think the St. Paul rent stabilization proposal is a recipe for a future study on how to screw up rent stabilization.
In Minneapolis, there isn’t a specific proposal. I think it’s very unlikely that next year’s Minneapolis City Council will write an ordinance that doesn’t at least cap it at 3% or the current rate of inflation. There are a lot of reasonable ways to do this, it turns out! I think voting yes in Minneapolis makes sense.
Did you know that I had a book released this April? Chaos on CatNet is a sequel to Catfishing on CatNet and takes place in a future Minneapolis. Signed copies are usually available from Dreamhaven and from the current mail-order-only incarnation of Uncle Hugo’s. Books make great holiday gifts, but should be ordered early this year — Tubby & Coo’s bookstore explains why.
I do not have a Patreon or Ko-Fi, but you can make a donation to encourage my work! I get a lot of satisfaction watching fundraisers I highlight getting funded. My readers have now helped buy a refrigerator for the school nurse at Olson Middle School, outfitted 8th grade Algebra students at Olson Middle School with binders to stay organized, bought a 3-D printer for students at Humboldt high school in St. Paul, equipped a classroom at Whittier with an air purifier, bought a pug mill (a clay mixer that allows you to reuse dried-out clay) for art students at Andersen United, bought copies of We Are Not From Here for North High students to read in 9th grade English class, provided a book/curriculum set to students at Green Elementary that would thoroughly upset a lot of pearl-clutching Republicans, and funded snacks for kids at Jefferson and Lucy Laney. Here are some other worthwhile fundraisers for high-poverty Minneapolis and Saint Paul schools.
A first-year teacher at Bryn Mawr would like a variety of classroom supplies, including individual dry-erase boards, a big easel, a classroom rug, a selection of books, and some educational games.
In Saint Paul:
Two science teachers at Washington Technology high school in St. Paul would like learning materials for their chemistry classes: glassware and microscopes, and equipment that will allow students to “see how adding nanoparticles to a conductive solution affects voltage.”
Crossroads Elementary needs a large stock of disposable face masks. (This doesn’t seem like something you should have to fundraise for, does it? but apparently it is.)
And a Head Start teacher would like snowpants, mittens, and hats for her students to wear to play outside in the winter!
And a different kind of school fundraiser (again, in Minneapolis):
Kaytie Kamphoff is a special education resource teacher at Patrick Henry High School and the co-director/producer of Henry Drama Club. (Christopher Michael is her co-director and their full-time theater and dance teacher.) She initially asked for funds on Twitter just so the Henry Drama Club could stage a couple of plays this year. Ms. Kamphoff has now set her sights higher: she’s hoping to raise enough to run a summer theater program for Northside kids, free for participants, paid for the recent grads/Drama Club alums who work. You can donate to her by Venmo or Paypal: Venmo is Henry_DC and PayPal is Kaytie.Kamphoff@gmail.com. Note “Henry Drama Club” in the memo and if Paypal insists you need the last four digits of her phone number, it’s 5548.
Her Twitter thread is solidly worth reading if you’d like some heartwarming stories of the transformational power of theater in the lives of high school students.