Highland Bridge still in limbo after rent control overhaul

Ryan Cos. is not sure that St. Paul's recent amendments to its rent control ordinance will be enough to reignite its massive Highland Bridge development project.

Driving the news: Ryan developer Maureen Michalski told Axios the company does not know if a 20-year exemption from a 3% rent hike cap for newly constructed housing will bring investors and lenders back to fund new apartment projects.

• "We had been advocating for a 30-year new construction exemption," Michalski said. "We're not sure that 20 years is enough to incentivize investment at this time."

The other side: St. Paul Mayor Melvin Carter's spokesperson Kamal Baker pointed to a January letter in which Ryan indicated support for a 20-year plan.

• "This policy was built in consultation with developers — including Ryan — who conveyed their support for a 20-year exemption. We are disappointed by their change of tone, but remain committed to the Highland Bridge site, and confident in Ryan Co’s capacity to deliver a first class development."

Yes, but: Michalski says Ryan only suggested support for a 20-year plan when it thought the city was considering a full vacancy decontrol measure that eventually became partial vacancy decontrol. Vacancy decontrol is when a landlord raises rents beyond 3% after a tenant leaves.

• Since April 21, Ryan has submitted at least four letters to the city stressing that lenders wanted 30 years, and that 20 years would not be enough.

Flashback: Ryan was working on its first Highland buildings when the rent control referendum passed. The Minneapolis-based developer then halted future rental housing projects.

• Ryan has won approval for 3,800 units on the land, but has only completed 230 rentals.

Why it matters: The mayor and city council invested a lot of political capital into loosening up the strict rent control policy approved by voters, much to the disappointment of affordable housing advocates.

• St. Paul remains short on housing and development has plummeted in the city following the rent control vote.

Between the lines: It's not easy to make construction projects work these days, with or without a rent control policy, because both interest rates and construction costs have spiked.