Three members of the St. Paul City Council plan to introduce a major amendment to the city’s voter-approved rent control ordinance that will entirely exempt new construction, a concession to developers who have argued that the 3% cap on annual rent increases has stifled financing for their projects and undermined the goal of creating new housing.
The proposal is expected to be introduced next week by Council President Rebecca Noecker, Anika Bowie and Saura Jost and voted upon in early April, but it’s unclear if it has the votes to pass. An amendment requires four votes of the seven-member council, and one of the seven seats is currently vacant and will be filled next month by an appointee who has yet to be chosen.
Jost said Council Member Cheniqua Johnson, who chairs the city’s Housing and Redevelopment Authority, also is working on a series of tenant protections that likely will be proposed at the same time.
“We want to show we can build housing for people and we can support our renters,” Jost said. “We can do both.”
The proposed amendment will permanently exempt buildings constructed after 2004 from the rent cap, a goal first proposed by St. Paul Mayor Melvin Carter during his budget address last August but that gained no traction at the time with council members.
Making existing exemption permanent
Jost on Wednesday pointed to the Highland Bridge development, where Weidner Apartment Homes of Seattle and other developers have chosen not to move forward with market-rate housing construction, citing the city’s rent control ordinance. She noted that the city council in 2022 approved a 20-year exemption for new construction, so her proposal effectively makes the existing exemption permanent.
“The urgency around it is related to housing production, and additionally, we have a lot of large development sites around our city,” Jost said. “We have downtown, the Heights, we have United Village, and of course, in my ward Highland Bridge, and every development in between. As the mayor mentioned in his address last year, about 95% of renters would still be covered under this exemption.”
Interviewed at the time of the mayor’s budget address, Noecker, who at the time chaired the city’s Housing and Redevelopment Authority, said while it was no “secret that rent stabilization has had problems,” she wanted to see more hard data that specifically links a slowdown in residential real estate development to the city’s rent control policy.
Opposition on the council
While her thinking has since evolved, at least one member of the council plans to fight the proposal.
“I’m still a hard no,” said Council Member HwaJeong Kim on Wednesday, noting that interest rates and construction costs also play a role in stalling housing construction. “We’re seeing that trend not just in St. Paul, but across the region. The slowing of the housing market is not just an issue exclusive to St. Paul. There’s so many other market factors.”
Kim acknowledged that rent control had given developers some hesitancy to start projects in the capital city, but it’s also had its benefits. “Rent stabilization has always been about how do we equalize the balance of power between the big developers and everyday St. Paulites,” she said. “We need to look at data across the board. How is rent control working for renters?”
Council Member Nelsie Yang, who voted against previous rent control amendments approved by the council in September 2022, said Wednesday she was “still talking to community members, city staff and officials” about the proposal and would not be making further comment.
Timing on the amendment
The timing of the rent control amendment could be decisive.
There are currently six voting members of the council, and an amendment requires four votes. On Wednesday, the council interviewed four finalists to fill the seventh position — the Ward 4 seat vacated by former Council President Mitra Jalali — who had been a vocal advocate for rent control and also voted against amendments in 2022.
The new council member likely will be selected March 26 and sworn in this April, possibly in time to vote on both the rent control and tenant protections proposals, which would each require public readings across three weeks. Jost noted that the council could stagger public hearings on the proposals on different weeks, which would lengthen the timeframe.
St. Paul voters in 2021 approved one of the strictest rent control measures in the nation, though the council softened it the next year, exempting new construction for 20 years, with a 20-year lookback period.
They also approved “vacancy decontrol,” allowing landlords to raise rents by 8% plus inflation once a unit is vacant, and created a “just cause” provision that emphasizes landlords cannot empty an apartment just to raise rents.
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