Coalition forms to oppose rent control measures proposed for Minneapolis and St. Paul
Proponents dispute coalition's claim that rent control slows creation of affordable housing
A coalition of business groups, real estate professionals and trade unions has launched to oppose rent stabilization ballot questions that voters will weigh in on in both Minneapolis and St. Paul this November.
The coalition members believe that rent control policies could delay building projects at a time when there’s already an affordable housing shortage in the Twin Cities, said Cecil Smith, president of the Minnesota Multi-Housing Association, which represents developers and property management companies.
”Rent control sounds like a solution to the problem of housing affordability,” Smith said. “A closer look at rent control indicates it is the wrong solution. Building more housing that’s affordable is the right solution.”
The St. Paul referendum would institute a 3 percent cap on most rent increases, although it would allow landlords to apply for an exemption. St. Paul’s proposal doesn’t include automatic exemptions for new constructions or for smaller landlords. The Minneapolis ballot question would give the City Council authority to enact rent control policies in the future.
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Smith pointed to rent control policies in cities like New York City and San Francisco as examples of the failure of rent stabilization policies to keep housing affordable. He said he trusts peer-reviewed studies by economists over an analysis of rent stabilization’s effectiveness earlier this year that was released by the University of Minnesota’s Center for Urban and Regional Affairs.
That University study found that the effect of rent stabilization policies depended on both the details in the policies and conditions in the local housing market, but that they’ve been effective at “maintaining below-market rent levels and moderating price appreciation.”
The study’s authors also concluded that there’s little evidence that rent stabilization policies lead to less new construction, but that it has been shown to be related to an overall reduction in rental units.
Advocates for the rent stabilization policies say the policies are needed to keep rental housing affordable and prevent extreme rent increases.
Over 180 cities have forms of rent stabilization, said Tram Hoang, manager of the Keep St. Paul Home pro-rent stabilization campaign. Hoang said the St. Paul proposal is the result of “decades of community organizing” and “deep and collaborative research.”
“This policy is flexible, fair, predictable and essential to maintaining the affordable housing we have,” Hoang said. “It will also protect local ownership and control of our communities from outside speculators and make significant gains toward advancing racial equity by ending egregious rent spikes that disproportionately impact and displace households of color.”
The rent stabilization policies could scare away national developers who’d bring projects and jobs to the region, according to Adam Duininck of the North Central States Regional Council of Carpenters.
”We support the idea of affordable homeownership, but this policy is much too restrictive, not well-thought-out and would have a chilling effect on development and construction in Minneapolis and St. Paul,” Duininck said.
Rent stabilization supporters have a goal to ensure that everyone in the city has a stable place to live, regardless of their wealth or race, said Claire Bergren, manager of the Home To Stay campaign Minneapolis.
"We know the people currently profiting from skyrocketing rents will try to distract and divide us by claiming that stabilizing rent will somehow be bad, but we know their real concern is their profits,” Bergren said.
The election is scheduled for Tuesday, Nov. 2. Voters in Minneapolis will also be weighing in on a ballot question that would reorganize city government to give the mayor more executive power and another that would replace the Minneapolis Police Department with a new Department of Public Safety in the city’s charter.