The Potluck

Rent control opponents raised $3.9 million to fight ballot initiative in St. Paul

By: - October 19, 2021 2:12 pm

Cecil Smith, CEO and president of the Minnesota Multi Housing Association, announces a campaign with support from business and labor groups to defeat rent control ballot initiatives in Minneapolis and St. Paul in front of the Carpenter’s Local 322 on Oct. 5, 2021. Photo by Max Nesterak/Minnesota Reformer.

The political committee campaigning to stop the rent control ballot initiative in St. Paul raised $3.9 million in two months, rivaling candidates for congress in nearby districts and dwarfing the nearly $215,000 raised by proponents, according to campaign finance reports filed Tuesday.

The eye-popping figure coming in an off-year election underscores property owners’ fears of what would be one of the most stringent rent control policies in the country, capping rent increases at 3% annually for all units — including new construction.

Sensible Housing Ballot Committee, created by the head of a landlord lobby group, kicked off its campaign earlier this month in front of the carpenter’s union hall in St. Paul, with canvassers flanked by representatives from realtors’ associations along with labor and business groups.

Their message to voters — “think twice about rent control” — arrived late in the campaign cycle, after early voting had already begun. But since then they’ve flooded mailboxes with multiple mailings and sent a team of paid canvassers throughout St. Paul. The group had not submitted a financial report six weeks ago as required, so the filing on Tuesday provides a first glimpse into the money behind the campaign.

Campaign finance reports show contributions flooded in from realtors and property owners from across the Twin Cities metro area — from Edina, Andover, Eden Prairie, Golden Valley and Minneapolis.

The National Association of Realtors also chipped in $750,000, with the Minnesota Association of Realtors and Minneapolis Area Association of Realtors each contributing $125,000.

Sensible Housing Ballot Committee spent most of their money with a company called Real Strategies on polling, canvassing houses, calling voters and placing ads.

The group promoting the ballot initiative, Keep St. Paul Home, reported raising nearly $215,000 over the past two months, with its largest contributions coming from progressive political groups including TakeAction Minnesota, Faith in Minnesota and the Service Employees International Union Minnesota State Council Political Fund.

If passed, St. Paul would be the first city in the state and one of the only cities outside of the coasts to regulate rents, potentially paving the way for others to file suit.

Its design is also one of the most severe, with no carve out for new construction and a 3% annual limit that does not change with inflation. California and Oregon, by contrast, allow annual increases of 5% plus inflation and 7% plus inflation, respectively.

Under Minnesota law, cities may only enact rent control if approved by a majority of voters in a general election. Minneapolis voters will also decide a question of rent control this fall, though the details would come later. It would simply authorize the City Council to draft a policy, since unlike St. Paul, Minneapolis doesn’t allow ordinances to be passed through citizen petition.

“The rent control ballot questions are a complicated issue with dire implications, and our broad coalition believes it is critical to have an engaged conversation with voters in both cities to educate voters on these questions,” wrote Cecil Smith, chairman and treasurer of the Sensible Housing Ballot Committee.

The St. Paul proposal received a lukewarm endorsement from Mayor Melvin Carter, who tweeted he would be voting yes “not because the policy is flawless as drafted — we can and must make it better, quickly — but because it’s a start.”

A majority of the seven-member city council has said they plan to vote no on the proposal.

Opponents say the lack of an exemption for new construction will bring building to a halt, exacerbating the housing shortage as the city is already failing to keep pace with population growth.

The proposal has gained grassroots support among renters and housing advocates who say the ongoing housing shortage has made renters vulnerable to excessive rent increases with no legal recourse.

A study of Minneapolis conducted by the University of Minnesota’s Center for Urban and Regional Affairs found low-income renters who are disproportionately Black, Latino and Native are more likely to experience rent increases in excess of 10% a year, which destabilize families who are forced to move.

This story has been updated with new information from campaign finance documents filed by Sensible Housing Ballot Committee and Keep St. Paul Home.

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Max Nesterak
Max Nesterak

Max Nesterak is the deputy editor of the Reformer and reports on labor and housing. Most recently he was an associate producer for Minnesota Public Radio after a stint at NPR. He also co-founded the Behavioral Scientist and was a Fulbright Scholar to Berlin, Germany.