Neighbor News
St. Paul City Council Unanimously Denies Tenant's Rent Control Appeal
City Council sides with landlord seeking reasonable return on investment over tenant who raised concerns about maintenance
In a meeting that lasted under 13 minutes, on Wednesday the St. Paul City Council allowed a landlord to increase rent by up to 8%, despite a tenant’s assertion that the complex neglects basic maintenance.
Without discussion, the council voted 6-0 (Council Member Anika Bowie was absent) as part of its consent agenda to accept a legislative hearing officer’s recommendation on the matter. In January, the hearing officer recommended denying the tenant’s appeal of a November Rent Stabilization Workgroup decision.
In November, the workgroup determined that Davern Park Realty Company should receive an exception to the city’s 3% cap on rent increases because the complex had experienced increased operating expenses, including double-digit insurance increases and greater payroll and benefits costs.
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The city’s rent control ordinance stipulates that landlords are entitled to a reasonable return on investment. This is calculated by adjusting the property owner’s 2019 net operating income for inflation.
Davern Park’s net operating income, defined as income minus operating expenses, decreased from $899,724.90 in 2019 to $679,187.27 in 2022. According to the formula in the city’s rent stabilization worksheet, based on these numbers Davern Park would have been entitled to ask for a 15% rent increase. However, in order to receive approval to increase rent over 8% landlords are required to obtain a staff determination of their request rather than self-certifying their financial information.
Find out what's happening in Saint Paulfor free with the latest updates from Patch.
While rent control was approved by a voter referendum in 2021, the City Council passed an amended ordinance in September 2022 that created several exemptions, including for new development and for existing properties based on inflation. Of the current council members, Rebecca Noecker voted in favor of the ordinance while Mitra Jalali and Nelsie Yang voted against it.
According to the ordinance, “The city will not grant an exception to the limitation on rent increases for any unit where the landlord has failed to bring the rental unit into compliance with the implied warranty of habitability.”
In his appeal, the tenant included photos of crumbling front steps, evidence of insect infestations, and a video showing a slow-draining shower.
