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| [St. Paul City Council debating rent stabilization changes.] |
The City Council held a public hearing today on the proposed Rent Stabilization ordinance changes. (I also wrote about Mayor Carter's proposal last year.) Here's my statement about it:
Hello. My name is Bill Lindeke. I live in Frogtown. I spent 9 years on Planning Commission, I teach urban studies at the University of Minnesota, and I was on the city’s Rent Stabilization task force.
Since 2021, I’ve written over 30,000 words in my column at Minnpost or on my personal website describing the city’s rent stabilization policy in its various iterations; that’s about half of a book. Through it all, I’ve tried to keep an open mind. For example, when I first heard about rent stabilization, I was a supporter and even signed the petition. Later, after I researched the details of the policy that was on the ballot — no new construction exemptions, no vacancy decontrol, not pegged to inflation — I changed my mind and campaigned against the ballot measure, arguing that was going to lead to disinvestment in St. Paul, particularly when it came to new market-rate housing. At the time proponents called my arguments was nonsense, and after the vote, I would have been happy to be proven wrong. In the last four years, that has not happened. Instead, St. Paul is languishing.
This time of year, I leave my house in Frogtown in Frogtown most days and walk over to the Victoria Avenue Green Line station. Whether I want to or not, I spend a few minutes looking at vacant lots. All through Ward 1, especially on University Avenue, you see vacant lots and vacant buildings, and they’re increasing in number. A building burnt down across the street a few years ago. A gas station was demolished at Hamline, and remains empty grass. The unrest following George Floyd’s murder triggered arson, and those building footprints are empty to this day. There are vacant lots in every ward; right across the street from City Hall where we sit, there’s an empty lot on one side and a boarded up building on the other.
This is bad for St. Paul in many ways, and it’s particularly bad for the budget. I think cutting off the city from investment, in the way that rent stabilization did, has made our city much worse off.
The flip side is of course that it’s supposed to help renters, but to me, it’s unclear how much this policy is helping renters. Everyone has an anecdote, but if you look at housing data, it's not straight forward. Housing Link, a reliable source of monthly information, shows that Minneapolis rents are going down while St Paul’s are jumping. This month's report shows that the cost of a two-bedroom apartment in St. Paul has gone up 13% year-over-year.
On the other side of the ledger, I've written about our housing data, where housing production has cratered. That’s a very expensive outcome, both for delayed or unmade investment, and by the subsidies to housing construction that now appear necessary.
The most notable casualties of our poorly done rent stabilization policy have been sites that are ready for reinvestment, places like the ones I worked on at the Commission, where the city has spent a lot of time and money on planning: most notably Highland Bridge but also places like the West Site Flats, the State Capital Area, United Village, the Hamm’s Brewery, or parcels all around our Downtown. In some cases, the city is on the hook for TIF bonds that have already paid for infrastructure and other costs, and where we might not see the necessary return due to the lack of investment. In other cases, the city has had to directly subsidize projects that might have been financed privately were it not for rent stabilization. All over the city, sites sit empty that might be transformational for their communities. If we do nothing, they’ll stay vacant for another decade or more thanks to the effects of rent stabilization on investment,
This isn’t my ideal solution; I would have preferred pairing strong tenant protections with full vacancy decontrol and a rolling exemption window for new construction — this is a policy I pitched repeatedly during city’s the task force meetings, but it got went nowhere during discussions where both sides were firmly dug in and inflexible. The current plan put forward by Council Members Jost, Noecker, and Bowie is a good idea and deserves your support. We can’t keep our heads in the sand about a policy that sound good but don’t work. This is a very expensive way to make an ideological point.
When the debate over rent stabilization was as happening four years ago, advocates hoped St Paul would become a national example that other cities could point to and learn from. Well, they got their wish. Instead, I have heard many city leaders use St. Paul ask an example of what not to do. At some point we need to fix this problem, and the sooner the better.
Thanks!
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