Minnesota Senate committee votes to cancel rent control ordinances in Minneapolis, St. Paul

(FOX 9) - A Republican-controlled Minnesota Senate committee has advanced legislation to overturn rent control measures that Minneapolis and St. Paul voters passed in November.

St. Paul voters approved one of the country's strictest ordinances, a 3 percent annual cap on rent increases. Voters in Minneapolis gave City Council permission to do the same, though council members have not agreed to enact price controls.

Landlords and realtors spent millions of dollars unsuccessfully fighting the ballot measures last fall. Now, they're supporting a Republican-led effort to undo the Minneapolis and St. Paul votes and ban other cities from putting rent limits before their voters.

"Rent control is not the answer to our housing challenges," Paul Eger of the Minnesota Realtors told the Senate Local Government committee during a Tuesday hearing. "We need more housing and more types of housing to meet demand, not policies like rent control."

The bill passed the committee on a voice vote and heads to the Senate floor. It is unlikely to pass the Democratic-controlled House.

Minnesota law requires cities to ask voters before enacting rent control measures. The GOP proposal eliminates that option. Most controversially, it's retroactive to Nov. 1, 2021, meaning it would cancel the Minneapolis and St. Paul ordinances that voters passed.

Republicans pointed to figures from the U.S. Department of Housing and Urban Development that show housing stats in St. Paul have plunged since November. That will constrain supply, deepening the housing shortage, they said.

Minnesota is at least 40,000 housing units short, state housing officials have estimated.

Opposition and concern about the GOP proposal came from residents in both cities and activists who worked to pass the ordinances.

"What the voters did not ask for is elected leaders like yourselves to preempt it, nor did they ask you to undermine their vote," said Robin Wonsley Worlobah, a Minneapolis City Council member who supports price controls.

Ann Schulman, a St. Paul renter, told lawmakers that she faced a $100 a month rent increase last year, which amounted to a 9 percent hike.

"It’s predatory practice, and predatory practice is common," she said. "The only way to stop such practices in the future is this 3 percent cap."

Democrats on the committee said the Legislature should not overturn the will of city voters. Republican state Sen. Scott Newman said he also had concerns.

"Local election versus preemption. Boy, that's a tough one," said Newman, R-Hutchinson.

Republican Sens. John Jasinski and Jeff Howe said legislative action is justified.

Both senators rent apartments in the capital city during the legislative session and said their own rents have gone up significantly since November as landlords prepare for the cap to take effect May 1. Lawmakers who live more than 50 miles from the Capitol can get reimbursed for their lodging expenses.

Jasinski, who said he's paying a 44 percent increase this year, argued that St. Paul's policy would affect housing prices in suburbs.

"You struggle with that because of local control," said Jasinski, R-Faribault, "but if it has an impact on the overall health and well-being in the state, maybe we should step in."

St. Paul Mayor Melvin Carter is advocating for a different approach. Carter has asked the St. Paul City Council to pass an amendment that exempts new construction from the rent cap.

New units would be exempt from the 3 percent annual limit for 15 years. Under Carter's proposal, it would be a rolling exemption, meaning buildings constructed in the past 15 years would also be eligible for a shorter time.

"We believe that we can be a city that can effectively facilitate new housing construction while adding protections and maintaining protections to ensure that families can continue to live and sustain their existing housing in our city," Carter said at a Senate hearing this month. "We don’t see those as oppositional goals."

Developers on the old Ford Motor Co. site in St. Paul, now called Highland Bridge, have paused development while the rent control issue is settled. Rent control supporters say Carter and the City

Council should not make changes to the measure that voters approved.