St. Paul mayor proposes loosening the city's rent control rules
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St. Paul Mayor Melvin Carter unveiled his budget proposal Tuesday at the Ordway Center for the Performing Arts. Photo: Kyle Stokes/Axios
St. Paul Mayor Melvin Carter wants to exempt all new housing from the city's rent control ordinance in an effort to jumpstart construction.
Why it matters: Carter argues the change would incentivize lenders to finance new projects in the city — which have slowed to a crawl this year.
The big picture: The move would be a setback for the advocacy groups that rallied St. Paul voters to enact the ordinance in a 2021 referendum, arguing limits on rent increases keep vulnerable residents in their homes.
How it would work: Carter proposes to permanently exempt rental properties built in 2005 or later from the city's current 3% cap on annual rent increases.
- That's a change. Right now, any new housing units in St. Paul become rent-controlled after 20 years.
Reality check: Council president Mitra Jalali told Axios that new housing construction is slowing down for a wide range of reasons, including high interest rates: "I'm sensitive to a conversation that blames the rent stabilization ordinance."
- Federal data show Minneapolis — which doesn't have rent control — saw its housing production numbers drop by half between 2022 and 2023.
- Building in other Midwest cities has slowed, too.
Zoom out: The amendment would pair with a new tenant rights ordinance the city council has been pursuing, as well as other city expenditures on housing.
- Carter rolled the plan out Tuesday in next year's $858 million budget proposal, which also contains $7.3 million for an "all-in" housing spending blitz to fund, among other things, new down payment and rental assistance.
- The mayor pitched a 7.9% levy increase to pay for these and other investments, which translates into a $133-per-year property tax jump for the median homeowner in 2025.
What they're saying: "Every key to the future for St. Paul depends on our ability to facilitate and accelerate our housing construction goals," Carter said in a speech on Tuesday.
What we're watching: Several new city council members favor moves in the opposite direction — to make the rent control ordinance more tenant-friendly.
- Council member HwaJeong Kim told Axios she wasn't open to weakening rent control: "The voters were very clear."
Yes, but: Others, including council member Rebecca Noecker, told Axios they're open to Carter's idea, noting the construction slowdown.
- Jalali is skeptical of weakening the ordinance but acknowledged that packaging it with other housing investments could address renters' concerns.
The intrigue: The mayor also proposed $1 million to waive city fees for developers looking to convert two commercial high-rises into residential units.
- Though Axios recently reported that commercial property vacancies in downtown St. Paul may be higher than previously thought, Carter says residential demand is high — and conversions could meet it.