St. Paul mayor proposes "rolling" rent control exemption

St. Paul Mayor Melvin Carter is pushing to exempt new construction from the city's voter-approved cap on rent increases.

Why it matters: Developers say the passage of the strict 3% rent control measure has forced them to pause or reevaluate projects, including future buildings at the Highland Bridge site.

How it would work: The draft ordinance, announced during the mayor's State of the City address Tuesday, would exempt dwellings newly built or converted from rent control rules for 15 years.

• An apartment that got its certificate of occupancy in 2020, for example, wouldn't have to abide by the cap until 2035.

What they're saying: "Simply stated, we're in a housing crisis because we have more people than homes at every income level and our population is growing fast," Carter said. "Anything we do to slow the production of new units will only make this problem worse."

The other side: Tram Hoang, who led the campaign for the November measure, said Carter's proposal "has the potential to be very harmful, but more importantly, solves a problem that doesn't exist."

• "If we want to see how rent stabilization will actually impact our housing market, we have to follow the basic principles of research: let it happen and study the results," Hoang wrote in an email.

The intrigue: The city charter prevents lawmakers from repealing the amendment within a year of enactment, and the city attorney's office has said "substantive" changes are unlikely to fly within the first year.

• Carter told reporters making the ordinance effective January, 1, 2023 could "avoid testing" questions about the legality of changing the law so soon.

What to watch: Carter has urged the City Council to quickly enact the ordinance as they await broader recommendations from a recently announced advisory panel of "stakeholders."

• If the changes do pass, lawsuits could follow.