St. Paul residents to vote on rent stabilization this November

St. Paul residents to vote on rent stabilization this November

Taylor Sibthorp and Nolan Manz

St. Paul’s November general election will determine whether a lengthy grassroots campaign to institute rent stabilization will come to fruition. The ordinance would prohibit landlords from raising rent costs above 3% over a 12-month period. Landlords who disobey may be subject to fines or criminal sentencing.

In Minnesota, state law requires the passage of rent stabilization policies to be decided through a general election. Housing Equity Now St. Paul (HENS), a political coalition based in low-income and BIPOC communities within St. Paul, organized a petition with 9,100 signatures to get the policy on the ballot. 

Communications and Programming Manager of The Alliance, a coalition dedicated to social justice, Carolyn Szczepanski, described the importance of the rent stabilization policy in St. Paul. The Alliance is one of the founding organizations of the HENS coalition.

“We have been hearing for decades that we don’t have the necessary and just protections for renters, despite the fact that more than half of our city of St. Paul are renter households,” Szczepanski said. 

The ordinance states that St. Paul is a renter-majority city, with more than 50% of its residents renting. A racial disparity is evident among renters and homeowners:  82% of Black residents, 64% of Indigenous residents, 62% of Latino residents and 58% of Asian residents are renters, while only 39% of white residents are, according to a 2019 American Community Survey. 

The proposed ordinance comes at a time when major U.S. cities are grappling with issues of growing wealth gaps, pushing out long-established, lower-income communities. It is particularly salient in cases of racial inequality and gentrification, both of which are highly present in the Twin Cities.

“We know that it’s fundamentally a racial justice issue,” Szczepanski said. “It’s not affordable to the median income renter of any race. It’s certainly not affordable to BIPOC renters in our community.”

While the legislative code for the proposed ordinance doesn’t mention race, it does cite housing vulnerability as a key reason to institute a rent cap. It states that current rent levels are damaging their “health, safety, and welfare,” particularly the well-being of those with low to moderate incomes.

Advocacy Manager of the Minnesota Youth Collective, B Rosas, worked on the ground in St. Paul communities with other organizers within HENS to find solutions for rent increases. One of their targets was the Midway area, a low-wage, majority BIPOC community north of campus.

“When we were collecting signatures… we really focused on the Hamline University and Midway area,” Rosas said. “We were able to talk to a bunch of renters over there.”

Organizers also found it important to connect with the younger voting population, such as on college campuses. Rosas explained that young people are vulnerable to predatory renting practices, because of their inexperience.

“I think it’s also important to engage them because I feel like a lot of slumlords and predatory landlords really take advantage of the fact that a lot of these young folks, and a lot of these students are pretty new to being a renter,” Rosas said.

 Some Macalester students have also been a part of the organizing efforts for the policy. Silas Southworth ’23 spoke from his perspective as a student organizer.

“I’ve kind of viewed rent stabilization or any of these sorts of policies that are trying to claw back power to the people from the small group of people that own all the property as tools in a bigger struggle to guarantee housing for all,” Southworth said. 

Both Southworth and Rosas noted that this ordinance is not the end goal but a stepping stone in the larger housing movement for more tenant power and city-wide racial and economic equality.

 Rent stabilization, more commonly referred to as rent control, remains divisive in the political and academic world. Economic theory opposed to these measures theorizes that since rent stabilization interferes with the natural supply and demand of the housing market, a city’s economic health will be negatively affected: housing quality will decline and investors will be wary of building new structures.

As a result, several local news opinion pieces cast scrutiny on the proposal. One opinion piece by Bill Lindeke, Ph.D. at MinnPost argued that the policy didn’t have enough exemptions to the cap, which would disincentive new developments by putting an immediate cap on renting instead of waiting a few years. He also disagreed with a flat rate of 3%, as it isn’t directly tied to inflation, though he conceded it follows the general trend.

 Recent empirical studies add more nuance to economic theory. To learn more, The Mac Weekly spoke to professor and Director of the Minnesota Center of Urban and Regional Affairs at the University of Minnesota, Edward Goetz, regarding a new study on rent stabilization policy he and his colleagues published this September

The study looks at the nationwide landscape of rent policy over the past twenty years, with a specific case study on Minneapolis. The research concluded that rent caps effectively keep housing costs below the market-level and that they increase housing stability. It also states that the economic effect of any rent stabilization policy is highly dependent on the specifics of the policy, and how that policy fits the local economic situation. 

 Goetz notes that real-life examples of rent stabilization show impacts distinctly different from what economists predict.

“I think the distinction here is between an application of economic theory versus the actual empirical outcomes that have been experienced in places that have adopted rent control,” Goetz said.

 He also emphasized the importance of other factors.

“It’s going to depend on what the local market is and how that’s been operating and what demand is for housing,” Goetz said.

Goetz said that it would be fascinating to do follow-up research and compare Minneapolis and St. Paul if the rent stabilization ballot measure passes. 

“This presents so many interesting research possibilities,” he said.

If the ordinance passes, St. Paul’s rent policy will be put to the test, with high hopes from the organizers behind the measure that it will give disadvantaged renters some breathing room, and that it will bring about some of the racial justice that residents have been demanding.