Neither side happy with rent control changes

Changes to St. Paul’s rent control restrictions take place Jan. 1, 2023, and are meant to jumpstart new construction and continue some level of renter protections. But if the sign of a compromise is that no one is happy, that may be the case with revisions approved Sept. 21.
Exemptions for new construction and affordable housing won 5-2 council approval. But some developers have said the changes may not be enough to lure investors and get their projects rolling again. At least two project sites, including one in Merriam Park, are up for sale.
But the council voters have brought calls for reprisal against elected officials who supported the changes. Renter advocates strongly oppose seeing restrictions rolled back. In a final public hearing prior to the vote, almost two dozen advocates said the council is going against the wishes of 53 percent of the voters, who approved rent control in November 2021. Several said they will work to oust council members who supported the changes. All seven council seats will be on the 2023 ballot.
“I am heartbroken and furious,” said Katherine Banbury, a renter who served on a city rent control task force. Her landlord, Dominium, has been able to self-certify rent increases of up to 8 percent. She said rent control hasn’t changed anything for her and her neighbors, and that many cannot pay high rent increases.
Dominium owns several West Midway properties.
“My fear is that it appears we have some council members who seem to be more accountable to corporate landlords and developers than to the more than half of St. Paul residents who are renters and people of color,” said Arline Datu, who is involved in the faith-based advocacy group ISAIAH.
While no landlords or developers spoke Sept. 21, many spoke at past hearings and sent in written comments. They contend that further changes or even outright repeal of rent control should be considered. One group of landlords filed suit against the city this summer to challenge rent control.
Maureen Michalski, vice president of real estate development for Ryan Companies, sent written comments noting that lenders won’t do business in cities with rent control regulations. Ryan is master developer for Highland Bridge, which has 3,800 dwelling units in its plans for the former Ford Motor Company site. She has since said that the changes made in September may not be enough.
At least two developers have put sites with approved zoning and variances up for sale. One is on Grand Avenue in the Macalester-Groveland neighborhood.
The other site on Selby Avenue in Merriam Park includes commercial and residential properties that developer Jon Schwartzman wanted to build a five-story apartment building on.
Other changes were also made. The annual 3 percent cap on rent increases remains. But landlords will be able to raise rents up to 8 percent plus inflation after tenants move out on their own or are evicted for just cause.
Landlords will not be able to use utility changes to raise rents above 3 percent.
Landlords can still go through a city process to self-certify rent increases, but will be required to notify tenants in advance of such requests. Ward Seven Council Member Jane Prince is among council members wanting to change that process in the future.
Council members Russel Balenger, Amy Brendmoen, Rebecca Noecker and Prince joined author Chris Tolbert in voting for the amendments. Mitra Jalali and Nelsie Yang voted against.
Jalali and Yang said the change will further harm renters, especially those who are low-income or people of color. “People are struggling and they need our help,” said Yang.
Another objection Yang raised is that changes go beyond what the city’s rent control task force recommended. For example, the task force called for a 15-year new construction exemption, with no lookback period.
“I will not vote to take rent stabilization away from my constituents who need it the most,” said Jalali. She pledged to work for continued changes, especially for affordable housing.
Jalali is especially concerned about the exemption for affordable housing and the 20-year exemption for new construction. The latter exemption has a 20-year lookback period, meaning thousands of housing units built in her ward in recent years will be exempt.
Noecker said that while the amended rent control measures don’t address all concerns raised, they do strike a balance for all involved. The question she has struggled with is how to make sure that rent control policy both protects renters and provides a supply of housing.
Prince also spoke of the need for balance, noting that she is hearing from tenants whose rents have greatly risen despite rent control, and small landlords who have sold out rather than deal with what they see as onerous regulations.
Mayor Melvin Carter issued a statement after the vote expressing support for the changes. “This ordinance protects renters while helping construct the new housing units we need for the future,” Carter wrote. “I thank all the community members who helped craft this policy, and applaud the council for passing it.”