Minneapolis could vote on rent stabilization this fall

Minneapolis voters could decide this fall to limit rent increases in a city where more than half of residents are renters.

City Council President Lisa Bender along with Council Members Jeremiah Ellison and Cam Gordon announced on Thursday their plan to put a charter amendment on the 2021 ballot to give the city the power to control rent increases. Voters in November will also be electing a new city council and mayor and could be deciding on another initiative to dismantle the police department and replace it with something else.

Over the past several years, the City Council has passed a slew of ordinances aimed at helping renters, especially the one-third who are “cost burdened,” spending more than 30% of their income on rent. They are much more likely to be people of color.

To increase supply, the city has invested in new affordable housing developments, decreased off-street parking requirements which drive up development costs and, most notably, abolished single-family zoning to allow up to three units to be built on any piece of land.

To increase affordability, the city began offering tax incentives to landlords to keep rents lower and now requires a portion of units in some new developments to be affordable. But like the rest of Minnesota, Minneapolis doesn’t have laws governing how much landlords can charge for rent.

“Being able to limit price gouging and large, abrupt rent increases is a big missing piece of our city’s housing policy,” Bender said. “We do not have a policy in place that says your landlord can’t double your rent overnight and give you two weeks to decide if you want to stay there. That’s a real story that I’ve heard from my constituents.”

The measure will face opposition from developers and landlords, who argue limiting rent increases cut into thin margins, making necessary repairs unaffordable and possibly driving up costs for other renters.

“It is incredible that certain members of the Minneapolis City Council have chosen further chaos. We vigorously oppose this proposal as rent control policies produce New York City-like effects on housing, housing affordability, and access,” Blois Olson, a spokesman for the landlord group Minnesota Multi-Housing Association, wrote in a statement.

Olson also said the city may be overstepping its authority, writing “this backdoor measure is going to demand strict legal scrutiny.”

Under state law, cities are only allowed to create rent control ordinances if approved by voters in a general election. If it makes it to the ballot in November, voters would be deciding if the city can adopt a rent stabilization ordinance or not.

The details of the policy would follow — how much rent is allowed to rise year-over-year and which properties would be subject to the rule — which could then go before voters or be decided by the city council. Legal challenges are likely, and the city has had to fight off lawsuits for nearly every new housing policy it’s implemented.

Bender used to be a skeptic of rent control, believing it would be administratively burdensome and not effective at maintaining affordability amid a housing shortage. But she says her views have changed over the years, after hearing stories of price gouging from constituents and seeing new approaches to rent stabilization in California and Oregon.

In California, which instituted rent stabilization last year, landlords may increase rent up to 5% plus the local rate of inflation. In Oregon, which approved rent stabilization in 2019, landlords are limited to raising rent no more than 7% per year plus the rate of inflation.

Rent stabilization is also more palatable given that the city has loosened restrictions on development, Bender said.

“We have made it easier to build needed housing in our city, and in that context, I think making sure landlords can’t do large rent increases with no notice is really important,” Bender said.

The University of Minnesota’s Center for Urban and Regional Affairs is currently conducting a study for the city on how different rent stabilization policies would affect the Minneapolis rental market. It will provide a report on its findings to the City Council in the coming months.

The council must decide by the end of February to send a rent stabilization ballot question to the Charter Commission for review in order to make it before voters in November.

Bender, Ellison and Gordon also announced on Thursday their plans to introduce new ordinances governing evictions, including requiring landlords to notify their tenants of their intention to file for an eviction and a “just cause” provision establishing the reasons landlords may give for choosing not to renew a tenant’s lease.

St. Paul adopted an ordinance last year prohibiting landlords from not renewing a tenants’ leases unless they haven’t paid rent, broke significant terms of the lease or if the landlord plans to renovate the unit or rent it out to a family member. St. Louis Park adopted an ordinance last year requiring landlords to notify their tenants seven days before they file an eviction in cases of nonpayment of rent.

*This story previously misstated the third author of the eviction protection proposal. It is Council Member Cam Gordon. This story has also been updated with additional comments from Council President Lisa Bender.