Vince Cornell knows that he could do a lot worse than the basement apartment of his Ashland Avenue home, even after coming home some days to find water seeping in under his front door. Cornell, 34, a journeyman commercial roofer who lived on the streets as a teen, has rented his two-bedroom unit for $875 a month since 2018.
Still, he was taken aback to receive notice that his rent would climb to $1,124, which likely would force him to find a new place. Last week, by the slimmest of margins, the St. Paul City Council voted to side with Cornell and a series of his Ashland Avenue neighbors appealing their rent increases, thereby holding his rent hike to no more than $934.
“I would say it’s definitely a relief,” said Cornell, who hosts his three children every other week. “It’s going to make some things easier for me budget-wise, and I don’t have to move.”
When tenants of the three small apartment buildings along the 900 block of Ashland Avenue learned that city staff approved rent increases of 28.5% despite the city’s rent control ordinance, their reactions ran the gamut.
Some tenants made plans to move out. Another negotiated a 15% increase directly with the landlord.
Appealing rent hike
Others banded together and convinced the Housing Justice Center to represent them in appeals this summer before the city’s legislative hearing officer, and later before the city council.
In their appeals, the Ashland Avenue tenants pointed to deferred maintenance on their seven century-old units, ranging from deteriorating foundations, water leaks and wobbly exterior staircases to open electrical covers, broken window locks, insects, mice and in some areas, mold. The property owner’s family said the rent hikes reflected the cost of repairs.
On Sept. 17, a divided council voted 4-3 to grant the tenants’ appeals, holding rent increases to no more than 3% — the city’s limit under rent control — but only for the seven units in question.
The split votes continued throughout consecutive rounds of voting, with council members repeatedly raising concerns about troubling living conditions they acknowledged did not rise to the level of having each property condemned as they took up each appeal, one by one.
“The greatest that could be imposed on the tenants is 3%,” said Abbie Hanson, an attorney for the Housing Justice Center. “I think that the tenants are really pleased with the outcome. They took a lot of time out of their schedules, and put in a lot of courage to stick up for their rights in this forum.”
Months-long process
The outcome, the culmination of a months-long process of appeals, underscores the complexity for city leaders of balancing the goals of St. Paul’s voter-approved rent control ordinance with the reality of maintaining NOAHs, or “naturally occurring affordable housing” that has remained affordable simply because of its age or lack of upkeep.
When bringing NOAHs up to fire and building codes proves costly, maintenance costs climb much more than 3%. City officials have said that under the ordinance, the city’s appeals process requires tenants of each unit to make their own individual case for why their rents should remain within that cap.
“That’s how the city is interpreting it, yes,” said Hanson on Wednesday.
Council Member Anika Bowie, who represents the neighborhood and voted against the appeals, said she felt empathy for tenants experiencing double-digit rent increases, but “as a council, as a body, I want us to also be fair, and ensure that the very people who are providing the housing … have that wiggle room, financially, and are able to make those improvements. … From the testimony, this landlord is really breaking even.”
Council President Rebecca Noecker, who voted with the majority, noted the property owner could still make building improvements and then come back to seek a larger rent increase after the fact, but any repairs conducted to date seemed rushed and insufficient.
“My vote does not mean that it’s saying that this apartment is uninhabitable,” she said.
Maintaining properties
Approved by voters in 2021, the city’s rent stabilization or “rent control” ordinance caps annual rent increases at 3%, but exceptions can be made — and often are — when a property owner contends property taxes, upkeep and other expenses exceed the limit and would prevent a “reasonable return on investment.”
Scott Day, son of property owner Judith Day, told the council this month that his mother once lived in the properties and even married the maintenance man, but she’s now in her late 80s, suffers from dementia and uses a wheelchair. She’s been unable to keep up with maintenance, he said, but she had long kept monthly rents stable and relatively affordable for the area, ranging from $875 for a two-bedroom basement unit to $1,600 for a three-bedroom apartment.
To add a $23,000 boiler, fix up the properties and expect a fair return on investment, he’d have to hike rents accordingly, he explained to the city’s legislative hearing officer in July, and then to the city council during a Sept. 10 hearing. City staff had examined his rent rolls and other financial documents and informed tenants through letters issued in April and May that the rent increases would be granted.
“It is clear that his family has been empathetic toward its tenants,” Bowie said. “This landlord has not raised rents in years. This is not a property that has requested subsidies. This is not a property that has requested any funding from the city. This is truly purely natural affordable housing.”
Attorneys with the Housing Justice Center argued that exceptions to the rent control ordinance could only be granted if a unit met “minimal maintenance and habitability standards,” and photos and videos showed several of the units in questionable condition. Day noted, in response, that until he alerted tenants of the rent hikes, the city had not previously received any formal complaints of fire code violations, and at the time, there were no open inspections cases involving the properties.
Units No. 1 and 5: Appeal granted, rent increase held to 3%
For units No. 1 and 5, Bowie moved on Sept. 17 to deny the tenants’ appeal of their 28.5% rent increases, noting complaints about light fixtures and paint wear-and-tear did not rise to the level of “habitability” concerns under the city’s rent control ordinance. She also noted the landlord had proven his need for a reasonable return on investment.
“Our ruling has to stand in a court of law, and we’re not that court of law,” Bowie said.
Taking a different tack, Noecker said she felt “disturbed” by the city’s Department of Safety and Inspections failing to abide by a requirement in the ordinance to fully assess deterioration and code violations, even if the unit was still inhabitable.
“It seems that the department did establish a significant rent increase without having established those facts,” said Noecker, who noted that major rent hikes should perhaps trigger a new fire certificate of occupancy inspection. “It should not be on the tenants to complain, or some other jurisdiction to weigh in.”
Bowie’s motion to deny the appeal failed, with Noecker, Vice President HwaJeong Kim, Cheniqua Johnson and Nelsie Yang supporting the tenants’ appeal. Bowie, Molly Coleman and Saura Jost favored denial but were outnumbered. The vote effectively limits the rent increase at the unit to 3%.
“There are so many questions about what our process looks like,” said Coleman, explaining her dissent. She said questions of habitability should be determined through city inspections or in housing court or district court. “This has exposed to my mind a number of flaws in our process. … That said … the question of habitability has some very serious legal implications, if we’re to make that finding as a council.”
Units No. 8, 9, 10, 11, 12: A wobbly staircase
Bowie said a Sept. 7 inspection in the next building showed more troubling maintenance concerns, including a condemned staircase, which justified limiting the rent hike.
Bowie said the maintenance issues merited a more limited rent increase of 20% once improvements had been made, rather than the 28.5% previously approved by city staff, but phased in over time as repairs roll out and a new fire certificate of occupancy is issued.
“We will vote on a 10% increase after the inspection … and after six months they will receive another 10% increase,” Bowie said. “I am definitely aware this is not a question of habitability. My motion is connected to deterioration.”
Her motion was again voted down by Noecker, Johnson, Kim and Yang, who then voted to support the tenants’ appeal and hold rent increases to no more than 3%.
“It’s important for us to be intellectually consistent, and to have consistent benchmarks,” Noecker said. “Right now, we don’t.”
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