Minnesota state law already makes it difficult for cities to enact rent control ordinances. Councils and mayors can’t pass such rent restrictions on their own; instead, they must await a vote of residents, either by charter amendment or referendum.
Minneapolis and St. Paul did just that in November: Minneapolis by authorizing the council to craft an ordinance and St. Paul by approving a citizen-drafted one.
But on Tuesday, a state Senate committee approved a bill that would not only remove the voter-approved pathway for rent control, but make the change retroactive to Nov. 1 of last year. That would cancel the rent-control approved by voters in both cities. While the bill, Senate File 3414, is unlikely to pass the DFL-controlled House, it speaks to the concern among Senate Republicans that the ordinances could impact housing construction.
After passing through the Senate Housing Committee, the bill was advanced by the Senate Local Government Committee Tuesday. Its next stop would be the Senate floor.
“We all know rent costs too much. We all know buying a house costs too much. That is partially because of supply and demand,” said Sen. Rich Draheim, the Madison Lake Republican and chair of the housing committee who sponsored the bill.
[image_caption]State Sen. Rich Draheim[/image_caption]
Draheim mentioned anecdotal reports of property owners imposing large rent hikes ahead of the implementation of the ordinance, so that future 3 percent hikes — the number codified in the ordinance — will be off of that higher base. Draheim also cited Census Bureau statistics that show requests for housing permits has fallen 80 percent in St. Paul since the passage of the referendum. In Minneapolis, which hasn’t drafted an ordinance yet and where new buildings could be exempt from caps, permits are up 68 percent.
This comes at a time when there is an estimated 50,000 housing unit shortage in the state, and Draheim cited St. Paul Mayor Melvin Carter’s testimony to the housing committee that the city is short 11,000 units from what it needs. Carter has proposed amending the St. Paul ordinance to exempt new construction and buildings and renovations less than 15 years old.
The Senate bill was endorsed by the Minnesota Realtors and Minnesota Multi Housing Association, which represents apartment owners and managers.
Paul Eger, the senior vice president for government affairs for Minnesota Realtors, said there have been numerous announcements of developers pausing or canceling multi-family projects in St. Paul because of the ordinance and its lack of exemption for new construction. Eger said that is evidence of people in the industry “acting rationally.”
But the bill was met with criticism from a dozen residents of the two cities, most of whom were active in the signature gathering and campaigns in favor of the ordinances.
“There were over 30,000 people who voted in this last election. That is no mistake. That is no coincidence and that was not an accident,” said B. Rosas, who worked on the Keep St. Paul Home campaign. “Taking away your right to organize your community is not only irresponsible but it goes against democracy.”
“It is the industry’s job to adapt to market conditions, not to threaten cities with disinvestment in order to pressure elected officials to go against the will of the voters,” said Tram Hoang, director of policy and research at the Housing Justice Center.
Minneapolis city council member Robin Wonsley Worlobah told the committee that renters in the city are “cost-burdened as a result of our profit-driven housing market.”
[image_caption]Council Member Robin Wonsley Worlobah[/image_caption]
North Minneapolis resident Tahiti Robinson told the committee that she worked on the rent control measure in response to difficulties her son had finding affordable housing.
“I was feeling optimistic when I saw that my vote to change the charter to allow rent-stabilization was successful,” Robinson said. “But now I am very concerned that my vote will be nullified.”
DFLers on the local government committee agreed with those testifiers, as well as the state’s city government organizations, that it is bad policy to retroactively cancel votes of residents.
“The problem I have with this bill is it is thwarting the will of the people when so many young people are increasingly cynical toward the democratic process,” said Sen. Steve Cwodzinski, DFL-Eden Prairie, who is a retired government and history teacher.
[image_caption]State Sen. John Jasinski[/image_caption]
Local Government Committee Chair John Jasinski, R-Faribault, said the state needs to act if local government actions affect more than those who live inside their borders.
“If it has an impact on the overall health of our state, then maybe we should step in,” he said.
My God, the hypocrisy of this man is outstanding.
(Local Government Committee Chair John Jasinski, R-Faribault, said the state needs to act if local government actions affect more than those who live inside their borders. “If it has an impact on the overall health of our state, then maybe we should step in,” he said.)
The vote for rent control should not be revoked, the people voted on it and let it run its course. If the unintended consequences (which happens to bills passed by elected folks steady) of policies negatively affects the ability to get financing, a new policy will be crafted. Trying to manipulate markets (favorite pass time of wokesters) always ends up in more problems. Take a look at HUD and you will see where this is heading.
You get what you vote for!!
How does this local interference bill comport with the conservative philosophy of local control? And why can’t Min post ever ask these questions?
You’re either for interference from Saint Paul, or you’re agin’ it. I was and continue to be very opposed to this misguided ordinance, but it’s up to the citizens of Saint Paul to fix it, not rural legislators who tell us their constituents “just want to be left alone”.
Hypocrisy in politics is no more surprising than the sun rising in the east, but it still needs to be called out on the left and right.
“While the bill, Senate File 3414, is unlikely to pass the DFL-controlled House, it speaks to the concern among Senate Republicans that the ordinances could impact housing construction.”
What utter nonsense. This bill is nothing more than pure big-city hippy punching. It will look good to some types of voters but does violence to the idea of home rule cities and local democracy.
State law has limited the powers of cities to adopt rent control ordinances since 1984. Thirty-eight years ago, possibly as a response to an unsuccessful rent-control ordinance in Minneapolis a couple of years earlier, the Legislature declined to prohibit all rent control ordinances but made it more difficult to pass them. Everything, it seems, was fine until the cities decided to exercise their powers to submit rent control charter amendments to the voters, and the voters made a free choice to adopt those charter amendments.
Local control always seems like a good idea to Republicans until the locals decide they want to do something they don’t like.
(For the record: I think the St. Paul amendment was a poorly drafted and ill-considered mistake. I voted for the Minneapolis amendment because it avoids the problems inherent in St. Paul’s)
You can’t say that Minneapolis “avoids” the problems with the St. Paul policy, they have simply been deferred. That is because we have not seen the result — the vote just gave Minneapolis the go ahead to draft up a rent control policy.
Let MPLS and St. Paul do what they want to do in housing policy.
Also – let them own the consequences of their irrational actions.
I’m not a fan of the design of the rent control measure in St. Paul but what Republicans are trying to do here just highlights their hypocrisy. They work to leverage local control on school boards and other such places to impose their version of Sharia law and then try to denounce other local measures they don’t like. Maybe it is time to eliminate LGA and the IRRRB and see how they deal with their districts having the actual independence they say they crave. We could also make sure everyone’s license automotive registration fees are proportional to the miles of road per-person in the county they should be supporting.
My guess is that they would suddenly become supporters of “socialism”.
First, I am not in favor of rent control, however, the people voted, and it appears our Republican colleagues don’t like to listen to the vote of the people, they then complain incessantly about governemnt overreach on a range of minuscule issues, and then guess who is doing all the over reach? Sure would be nice to get some rationality from that side of the isle, that is not saying there is an excess of it on the blue side.
There they go again: Small government, lowest level of government believing Republicans deciding that big brother knows better than the actual people who voted for rent control. The hubris is off the charts for these policial ego maniacs.
I’m opposed to rent control and am a lot closer to Minneapolis and St Paul proper than Faribault and Madison Lake. And, even though I disagree with the ordinances passed, I accept that in democracies people get to choose what they want.
Hey Jasinski and Draheim, Putin is looking for foot soldiers: He’s your kind of guy…
Unfortunately, the law passed in St. Paul, written by activists without the thoughtfulness you might hope for from elected officials, is just about the worst policy in effect anywhere in the country. Though Mayor Carter called it “a good start” it actually isn’t – and so the major dysfunction seen in the St. Paul market now – the cessation of new construction, the small landlords selling their units off, removing them from the rental market, the immediate catch-up rent increases to get ahead of the 3% and lack of vacancy decontrol – are results of how bad this policy really is . Had it been more like other municipalities – for example a new construction exemption, a reasonable max annual increase (e.g. 5-7%, with inflation consideration) we probably wouldn’t be seeing such a mess AND it would have protected against egregious increases the activists claim to be their target. Instead it’s caused short term rental hikes, and damaged supply.
In just a few months St. Paul has become a cast study in how not to do rent control, and cities everywhere can take notice.
Republicans in general skew to local control of issues, so it would be more consistent for them to want to see St. Paul fix their mess than remove the local control. They shouldn’t write blanket policy based on this one screw up – what other elected officials would willingly inflict this on their own city or town?
It’s not the small landlords who are the problem. It’s the large corporate landlords, who buy up buildings, either evict the tenants or price them out, and rent the same apartments with minor improvements for 50% more.
The Pioneer Press had a story not long ago profiling the small landlords, who are raising rents now to market level before May 1, and some are selling their duplex/4 plex units, a few mentions of selling them as condos, or selling out to large, possibly out of town property owners who can spread the costs of building management across many properties. Lots of frustration with how they (small landlords) are portrayed as predatory when they are looking at not even breaking even going forward under the new rules – so expect to see more of these small operators exit the market and depending how they leave, their units may leave the rental market as well.
So the law has created a large problem for these small landlords, who must now turn to big rent increases, or parsing out fees and utilities separately, or they will sell out. The fact the city has yet to define “what is rent” (what’s actually included in the rent control?) shows you the depth of the hole they are in figuring this out.
https://www.twincities.com/2022/02/13/st-paul-rent-control-amendments-landlords-hike-rents/
Well, whatever those landlords wanted to do, they better have done it because from now on rent is controlled.
Selling them as condos when they feel it is their best interest, is always going to be an option. The market went from condo heavy to rental heavy post-2008 and there isn’t any reason it couldn’t go back the other direction.
Citations Needed podcast did an episode about the vast overrepresentation of small landlords in media reports on rent control measures. They exist, sure, but they are dwarfed by the number of corporate, large-portfolio landlords. And that’s in any U.S. metro, not just the Twin Cities.
Of course, the corporate landlords love it when people think that they’re small landlords, based on media coverage that ignores the near-ubiquity of corporate landlords in the rental market. But how are people who haven’t rented in decades, if ever, going to think any differently if that’s the info they’re presented with?
Rent control would not be so popular were it not for the fact of corporate ubiquity, with its penchant for insensitivity in disputes, taking immediate action to evict in minor infractions, and being more focused on profit that anything else. Hardly anyone (who doesn’t rent) seems to notice these reasons for rent control’s popularity, based on the fact of misleading reports that suggest most landlords are mom and pop landlords, when the reality is so far from that narrative
While I have questions about the rent control implementation, the passing this law will result in court cases that I suspect would ultimately uphold the right of cities to implement rent control, and thereby having the complete opposite effect of the GOP intention; oh, wait– just another day in Dumbville.
Another example of Republican voter suppression tactics.
And conservative cancel culture (that’s definitely, really a thing).
Legislative Republicans apparently need a refresher course on conservative fundamentals.
House Republicans late last year tried to pressure Mayo Clinic to roll back a requirement that members of its workforce be vaccinated. Government should not interfere with an employer’s legal requirements of employees. That’s a management-labor issue, not the business of politicians.
Now Senate Republicans want to undo local voter-approved rent control. The best decisions are those made closest to the voters –remember? If local voters make a bad decision, it is a problem for their cities, not state government.
Two recent efforts to impose overreach by state government. Is there something in the air at the Capitol that numbs Republican minds?
According to the article, this bill is driven by the realtors.
Nothing morenthan government doing the bidding of an interest group.
Nothing new
Part of the Republican plan to appear to be busy without accomplishing anything. Waste of time. Rural Republicans, want to try to control cities? Why don’t I you focus on improving living conditions in your own communities and leave cities alone.
For Pete’s sake rural towns are constantly looking for government handouts because their employers’ can’t hire due to the lack of housing. Maybe fix your own house before you mess with mine.
This strikes me as (more) evidence that the Republican Party has swung from a belief in democratic rule as evidenced by “local control” to a belief that “local control” can only be permitted when the locals reach a conclusion that Republicans approve of. It’s also not much of a stretch to suggest that legislative Republicans are either totally out of touch with the rental market that most Minnesotans are dealing with, or perhaps that they’re simply “in the pocket” of corporate (and even small-time) landlords. I’m ambivalent about rent control, but I have zero sympathy for landlords, small or large, and count myself fortunate to be the owner of a modest house. That said, I’ve also been a renter, and haven’t forgotten what that’s like – and what it’s like when the landlord boosts the rent by an amount that’s simply unsustainable for the renter. Housing might be (I’m not an economist, so not qualified to pass judgment unequivocally) the largest segment of the economy that proves that while supply and demand still works – sort of – as an economic principle in the housing segment, laissez-faire hugely favors the landlord over the tenant, and instead of the “invisible hand” of the market, we get a very visible landlord’s thumb in that same market.
Ray says, “laissez-faire hugely favors the landlord”. That is mostly true when The supply of rental units is far short of demand, as it is now. If you increase the supply, then renters have more choice and can avoid renting from bad landlords, or when the price is too high. Unfortunately, rent control invariably leads to reduced supply which gives existing landlords even more power in the market place to reduce maintenance and increase rents. In the longer run, local communities need to encourage and facilitate the production of more rental units, rather than enact rent control measures.
Follow the future money as these rural politicians accept political donations from big bad (because they live in demon-infested cities) developers and corporate landlords.
Interesting that so many Republicans from out state districts whose residents are suffering from our current housing emergency are so concerned about the wishes of non-resident landlords looking to maximize their investment returns.
They call us “cit-iodts”, paternalisticly lecture us on how we should run our cities, then wonder out loud, “How come they won’t vote Republican!?!
Gee, I wonder why.
Do Rural Minnesotans flock to city council or county commissioner meetings in the Twin cities metro area because wealthy Twin cities residents sure love to to show up at our meetings in out-state MN and tell us how much they are being over-taxed and over-regulated. Their overwhelming sense of entitlement and aggrievement is quite breathtaking.
Not a fan of the rent control ordinance that was passed because I think it’s short-sighted, but people voted for it and it’s their city.
That being said, if St. Paul wants 11,000 below-market housing units – instead of asking private citizens to shoulder the burden of below-market rents for “the good of the many,” why doesn’t the city build 11,000 units, run them at a loss and then just raise taxes to cover it? I don’t like privatizing profit and socializing risk, but neither does socializing profit and privatizing risk make any sense. If the city wants it, let the city build and maintain it. Mr. Carter seems like he’s a bright person, I’m sure he could figure it out how to make it happen.
I can’t really add much to this discussion, but I’ll just say that in this instance, and others such as attempts to control local property taxes, and dictate prosecutions etc. etc., we see the undeniable disdain for democracy being challenged by “small govment” impulses towards dictatorship. I keep calling it Fascism but from overturning elections to nullifying local voters the pattern is clear. Freedom is great so long as people use it to refuse vaccines and masks, and taxes, but the minute people use their freedom to do something Fascists do like… it’s time to stamp it out and take over.
No Paul, freedom is deciding what is best for you personally. Telling everyone else what they need to do socialism.
Joe, nullifying votes IS telling other people what they can or cannot do. You’re working with an incoherent concept of society. “You’re not the boss of me!” is a perfectly good teen age rant but it can’t possibly be a model for responsible governance. And sure, you guys will suggest that chaos is all fun and games… until there’s a riot and you’re afraid to set foot inside MPLS because people don’t do what the police tell them to do.
Apparently the GOP I s working hard to ensure they never get my vote again. Zero principles.
Why is a guy from Madison Lake not working on the priorities of his local areas? Please explain.
My hometown is Appleton. We have a closed private prison. Has the local Republican representative done anything to get the state to buy it? No, he wants an out of state company to reopen and profit from it, without. Union to get good wages and benefits for those who work there. His idea hasn’t and won’t happen. I believe he focuses on denying women access to abortions.
Dear Senator Draheim,
I am writing as a resident of Minneapolis to complain about Paddlefish Days in Madison Lake. I know I don’t live there, but I feel as a citizen of Minneapolis I have a right to comment on policies and decisions enacted by the citizens and residents of Madison Lake.
I don’t think it matters if the voters of Madison Lake have overwhelmingly voiced support for Paddlefish Days. Obviously the residents do not know what is best for their community, and it is up to representatives from the Minneapolis-St. Paul metro area to fix this problem.
I feel that it is insulting and dangerous to Paddlefish. Free children’s games will instill in our youth a sense of entitlement and a lack of appreciation for hard work. The Grand Parade is likely to cause damage to the streets, resulting in higher transportation costs for the entire state of Minnesota. I won’t even go into the dangers of driving golf carts around the city.
I know you will appreciate the willingness of a Minneapolis resident to step in and put things right.
I would propose cancelling not only the 2022 Paddlefish Days event, but also the 2020 and 2019 events. Just to be safe.
The law of unintended consequences from good intentions are on full display in St. Paul with their ill informed rent control vote. Rent control of 3% in a time of 10% inflation without any control on property taxes, energy costs, maintenance etc costs is idiotic. It will result in small rental property owners exiting by sale to large corporations or through condominium conversations. In the meantime, no new rental properties will be built at precisely the time we need more rental properties. Forest Gump was smarter than the St. Paul voters.