St. Paul City Council hurtles toward implementing rent control policy by May 1

The St. Paul City Council took its first steps Wednesday toward implementing the rent control ordinance that voters passed in November and that takes effect in just over six weeks.

The council voted to spend $635,000 this year to fund five new staff positions to begin administering the ordinance, which caps annual rent increases at 3% for all properties.

The move to fund the positions came before the city has determined how landlords will be able to apply for an exemption to the 3% cap and how renters will submit complaints.

The council took up two proposals that define some basic terms like “rent” and direct the city’s Department of Safety and Inspections to administer the program. The soonest those could pass is April 3, giving city staff fewer than 30 days to get public comment and finalize the process for receiving applications for exemptions and complaints from renters.

The Department of Safety and Inspections must also define what “a reasonable return” is, which is one of the few reasons landlords can seek an exemption.

The lack of specifics so close to the May 1 start date has incensed some members of the council, who directed their ire at Mayor Melvin Carter’s administration for not moving more swiftly.

“This is just no way to run a program,” Council Member Jane Prince said during Wednesday’s meeting. “The uncertainty that we have put our renters, landlords, developers through is really damaging our city … At a higher level, this needed to be made a top priority.”

Prince was the only council member to vote against the budget proposal.

The policy passed by St. Paul voters will affect more than half the city’s population and is one of the most stringent in the country, applying to properties big and small and to new construction and old. Landlords also won’t be able to increase rent beyond 3% after a renter moves out.

Since the ordinance passed in November, construction permits in the city have plummeted by 80% as investors pull out of projects.

Carter has pushed for an amendment to the ordinance that would exempt new construction for 15 years, but the council is wary of taking up any amendments before November. The only language in the city charter — which is like a constitution — that governs citizen-led petitions says the council cannot repeal them within the first year. The city’s attorneys have advised the council to avoid making substantial changes as well.

Meanwhile, city officials don’t know if five full-time staffers will be enough to administer rent control and hear requests from owners of the city’s approximately 70,000 rental units. The office could be flooded with appeals, given that current inflation estimates are more than double the 3% cap on annual rent increases.

The rules governing appeals could change yet again this year once the 41-member work group Carter convened last month releases its recommendations. The group includes activists, landlords, developers and subject matter experts, but isn’t expected to complete its work until this summer, after the ordinance takes effect.

Council Member Mitra Jalali, who drafted the three proposals with Carter’s administration, offered a note of optimism on the city’s progress.

“It has taken a lot of time to think through the complexity of how to administer this work,” Jalali said in an interview with the Reformer. “I think it’s really easy to sit around and point fingers. It’s much harder to get in the game and do the work.”

Council President Amy Brendmoen pleaded with the public to avoid a repeat of last year, when rent control activists designed the ordinance without input from city leaders and put it on the ballot.

“I’d just like to make a public service announcement and say that I think it’s clear that policymaking by petition initiative is a terrible way to make policy,” Brendmoen said. “We’re basically doing this backwards.”