Two questions around efforts to impose rent control in Minneapolis are currently being considered by the Minneapolis Charter Commission for inclusion on the ballot for the November 2021 municipal election.
Yet the questions themselves would not impose any changes to how rental property is regulated in the city. Rather, they seek the ability for the city to do so — by getting around a Minnesota law that currently prevents cities from implementing rent control.
Council Members Jeremiah Ellison, Cam Gordon and Council President Lisa Bender introduced the amendment proposals in January, and the full City Council voted to forward the proposed ballot measures to the Charter Commission in February.
The commission, which received public comments on rent control in March, now has until July to finalize its recommendations, though it can send its feedback to the council at any time before then.
Here’s a look at what the proposed amendments say, what they would do, and what advocates and opponents say the effects of rent control — if eventually implemented — could be for Minneapolis.
What do the proposed amendments say?
The first proposed charter amendment would change Article I of the Minneapolis charter, which outlines the city’s general provisions and powers: “Powers, to be submitted to the voters at the November 2, 2021, municipal election, pertaining to adding authority for registered voters of the City of Minneapolis to propose, by initiative, a rent stabilization ordinance to regulate rents on private residential property in the City of Minneapolis.”
The second proposed amendment would change the charter’s Article IV, which outlines the city council’s powers: “Function, to be submitted to the voters at the November 2, 2021, municipal election, pertaining to adding authority for the Council to adopt a rent control ordinance or a rent stabilization ordinance to regulate rents on private residential property in the City of Minneapolis and to submit a rent control or rent stabilization ballot question to qualified voters to regulate rents on private residential property in the City of Minneapolis.”
So what would they actually do?
When it comes to implementing rent control: absolutely nothing — at least not initially. Instead, the charter amendments are there to satisfy the exception in Minnesota’s rent control law, which says that charter cities in the state can engage in “controlling rent on private residential property” only if “the ordinance, charter amendment, or law that controls rents is approved in a general election.”
That, in essence, is what the two rent control charter amendments do: They give the city the power to pass rent control measures. The first question would give the city the power to do that through a ballot measure (yes, another one) brought forth by residents through the city’s current petition process, which requires the collection of 5 percent of votes cast in the last state election to force a charter amendment on the ballot.
The second question is a little more straightforward: It would give the City Council the power to implement rent control through its normal legislative process.
Let’s back up: What exactly is rent control, and what has been the experience with it elsewhere?
Rent control is a broad term for rules, laws or ordinances that put limits on a landlord’s ability to charge or increase rent. The specific rules tend to vary by location, and rent control has been implemented in California, New York, and, most recently, Oregon.
Ellison said he does not have an ordinance “in his back pocket, ready to go,” if voters would give the city the ability to implement rent control, but he and other council members are doing their due diligence through learning about the pitfalls of efforts elsewhere. Rent control measures around the country typically cap rent increases between 3 and 10 percent, and many policies factor in inflation.
Yet Eric Myers, director of government affairs for the Minneapolis Area Association of Realtors, said places like New York City offer an example of the unintended consequences of rent control, including buildings that fall into disrepair because landlords aren’t able to charge enough rent for upkeep or the presence of well-off tenants who obtain homes with stabilized rents and never move out.
Erin West, with Minneapolis United For Rent Control, said rent control measures in San Francisco and New York have exceptions that tend to undermine the intention of the policy. In San Francisco, for example, she said new buildings are exempt from rent control, so developers raze buildings in order to erect new ones and jack up rents. New York has vacancy decontrol, which means a unit’s rent is no longer controlled if a tenant moves out. “The landlord is then incentivized to remove long-term tenants and get a new one in so they can set prices at any level,” said West.
West believes the best way to secure a stable rental market is to have rent control measures that make room for little to no exceptions. The one she thinks is reasonable is a carve-out that allows small landlords to raise their rent an extra percent or two in order to pay for repairs to a building. But she would also like the city to create subsidies that landlords could tap to cover housing upkeep.
So is this happening for sure? Where are we in the process?
After the council sent the proposed questions to the Charter Commission, the commission had 150 days to decide whether it supports the proposals, rejects the proposals, or wants to replace the proposed amendments with versions of its own. The commission has yet to weigh in, and has until July to do so.
Once the Charter Commission responds, the matter goes back to the City Council, which could move forward with the ballot measures — with or without the Charter Commission’s blessing. If the council decides to move forward, it would then have to draft and pass the exact ballot language that would go in front of voters.
Finally, the ballot questions then go to Mayor Jacob Frey, who could veto the measures based on either the underlying policy issues — or the language council proposes to put before voters. If the mayor does reject either or both measures, the council could still put it on the ballot by overriding Frey’s veto with at least a two-thirds majority, or nine votes.
Why is this happening now?
Rent control has been a hot-button issue for residents and atop the list of priorities for city officials for years, and getting rent control-related ballot questions in front of voters has long been a goal for several council members.
“It’s part of the reason I ran for office,” said Bender, who was first elected to council in 2014. “I really saw this threat coming. … We had just very little policy in place either to provide for the needed housing in a city that was growing — and then also really lacking renter protections and other policies that help keep people in their homes.”
According to a 2018 study by the Minnesota Housing Partnership, more than half of Minneapolis residents rent, and more than half of those renters earn less than 60% of the area median income, which translates to a little more than $51,000 for a family of four.
In 2020, the city also engaged the University of Minnesota to conduct a study to gauge the impact of rent control policy on the city. In 2019, the school’s Center for Urban and Regional Affairs (CURA) found that Twin Cities rents increased by an average of 3 percent since the market began bouncing back from the recession in 2009.
“But the biggest jump was over 9 percent,” Bender noted. “A lot of landlords are not raising rent by significant amounts. But some are, and they are doing it at an amount that is too much for a family to pay.”
CURA researchers also found that those experiencing the largest rent hikes are renters of color generally, and Black households in particular.
“Rent control has been one of those ideas that have been consistently asked for in my community,” said Ellison, whose Ward 5 includes the Harrison, Hawthorne, Near North, and Sumner-Glenwood neighborhoods, along with parts of Jordan, Willard-Hay and the North Loop. “Rent increases for middle-incomes or higher-incomes aren’t the rents that are exploding out of control; it’s rent for lower-income folks that have a tendency to see rents rise really rapidly over a short period of time.”
What do landlords say about the proposed amendments — and the possibility of implementing rent control in Minneapolis?
Though the current charter amendments in question wouldn’t implement rent control on their own, the possibility that they would give the city the power to do so has drawn criticism from property owners, many of whom say rent control is the wrong policy to fix the city’s housing issues.
“When we start to take a deeper look at it here in Minneapolis, we feel that it’s the wrong prescription for the wrong ailment,” said Myers, of the Minneapolis Area Association of Realtors. Myers referenced research from the CoStar Group, which found that rents have only risen by 2.4 percent in the city between 2010 and 2017, as well as the findings by CURA regarding Twin Cities rents increasing an average of 3 percent over the last decade and change. “From our perspective, 2.4 percent is very healthy rent growth,” said Myers. “It’s not overboard.”
He believes housing issues in the city stem from a lack of supply, and that the right solution is to build more residential capacity. If rent control becomes an option in Minneapolis, he said, it may dampen the incentive for developers to build in the city. And though Myers said he’s amenable to learning more about specific policies that might help the city address its housing problems, he doesn’t think rent control proponents have detailed plans in hand.
Cotty Lowry, who owns apartment buildings in the city, echoed Myers’ belief that regulating the rental market isn’t the best way to help those experiencing housing insecurity or homelessness. “I think the people in the most inexpensive apartments are vulnerable because their incomes are vulnerable,” said Lowry. “I think this all boils down to 15 bucks an hour or 20 bucks an hour, a living wage.”
Opponents of rent control have also argued that it could inject more uncertainty at a time when the city is grappling with other issues — including the future of its police department and a rise in crime — that have already affected the city’s rental market.
“Nine out of 10 apartment owners have seen a significant uptick in vacancy,” said Twin Cities commercial real estate broker Abe Roberts. “And the numbers are only rising.”
Roberts said he hears from landlords, tenants and investors fleeing Minneapolis for the suburbs over perceptions of the city around policing and crime, and that rent control would be another massive blow to the city’s desirability.
Aren’t there a bunch of charter amendments on the Minneapolis ballot this November?
Yes, so far there are four proposed amendments before the Charter Commission that could potentially be on the ballot during the Minneapolis city election in November, when both the mayor and city council will be up for election: the two rent control questions; a city-council led proposal to create a new public safety system; and a proposal to shift more city power from the council to the mayor.
And another one could be coming: Last week, the group Yes 4 Minneapolis submitted a petition for another charter amendment, this one also to replace Minneapolis police with a new public safety system.