St. Paul Residents Launch Rent Stabilization Campaign To Cap Increases At 3%

By Max Nesterak, Minnesota Reformer

March 30, 2021

Renter advocates in St. Paul announced a campaign on Tuesday to put rent control on the 2021 ballot, which if approved by voters in November would limit rent increases to 3% over a 12-month period for all rental units across the city.

The move follows a similar effort underway in the city of Minneapolis and comes on the heels of both cities passing a slew of rent regulations in recent years, as they seek to protect low-income households amid an ongoing affordable housing shortage and appease an increasingly powerful political base.

“Now that St. Paul has one of the strongest tenant protections in the state, we need rent stabilization to make sure our neighbors aren’t pushed out of their communities,” said Danielle Swift, an organizer with the Frogtown Neighborhood Association, during a news conference announcing the campaign.

Activists with Housing Equity Now Saint Paul aim to collect 10,000 signatures from voters in the city to put their proposal on the ballot in November.

In both cities, advocates for rent stabilization policies connect their efforts to a larger movement for racial justice in a state with among the largest disparities in wealth, homeownership and education in the country.

“We know that housing stability is a racial justice issue,” Swift said, noting that in St. Paul 39% of white residents are renters compared to 84% of Black residents, 64% of Native residents, 62% of Latino residents and 58% of Asian residents. Homeownership helps people build wealth and also acts as a form of rent control, holding people’s monthly housing costs consistent for the duration of the loan.

“As a homeowner, I’m benefiting from a tool that keeps monthly housing payments consistent for homeowners — my mortgage,” said Tram Hoang with The Alliance, a nonprofit that advocates for racial equity in economic development. “That’s a huge privilege and a sense of security and safety that I want for all of my neighbors, regardless of whether they rent or own.”

Danielle Swift, anti-displacement organizer for the Frogtown Neighborhood Association, speaks at a zoom news conference announcing an effort to put rent stabilization in St. Paul on the 2021 ballot.

Opponents of rent stabilization argue regulating rents may backfire by preventing landlords from being able to afford upkeep, discouraging developers from building much-needed units and forcing up prices elsewhere in the market. Opponents also criticize rent stabilization for being an imprecise way to help low-income residents, who would be better served through rental assistance programs and greater investments in affordable housing construction.

Rents on average have begun to decrease in the Twin Cities for the first time in years amid a surge of new construction, although prices continue to rise in low-income areas of the city.

Recent research by the University of Minnesota’s Center for Urban and Regional Affairs commissioned by the city of Minneapolis found that white incomes have generally increased more rapidly than rents in Minneapolis over the past 15 years. The reverse is true for Black and Native households, with incomes falling as rents have risen.

While advocates of rent stabilization argue the 3% limit would not affect most landlords, the proposals are drawing pushback from many landlords and state lawmakers.

Following news of Minneapolis’ effort to put rent stabilization on the ballot, Senate Republicans introduced a bill to prohibit local governments from adopting any form of rent control. Currently under state law, cities may only enact rent control policies if approved by a majority of voters in a general election.

The Minneapolis proposal, which is opposed by Mayor Jacob Frey, is currently being reviewed by the city’s Charter Commission. They must issue a recommendation before the City Council decides whether to put it before voters on the 2021 ballot.

Unlike St. Paul’s clear proposal of a 3% cap on rent increases, the details of a Minneapolis policy would be worked out later. If it makes it to the ballot in November, voters would simply be authorizing the City Council to come up with a policy.

St. Paul’s 3% limit is also lower than rents allowed in places like California and Oregon after they passed their own rent stabilization laws. In California, landlords may increase rent up to 5% plus the local rate of inflation. In Oregon, landlords are limited to raising rent no more than 7% per year plus the rate of inflation.

Unlike many jurisdictions that have adopted rent stabilization, the St. Paul proposal doesn’t exclude new construction or allow landlords to raise rents to market rate once a tenant moves out.

“The reason why is because we don’t want to see people being pushed out of their housing so that the landlord can increase the rent in the future,” said Margaret Kaplan, president of the Housing Justice Center, who helped craft the policy. “That’s something that we hear about in other parts of the country.”

The Minnesota Reformer is an independent, nonprofit news organization dedicated to keeping Minnesotans informed and unearthing stories other outlets can’t or won’t tell..