On November 2, 2021, Saint Paul voters approved a Residential Rent Stabilization Ordinance for the City of Saint Paul.
The Ordinance limits residential rent increases to 3% in any 12-month period even if there is a change of occupancy. It also directs the City to create a process for landlords to request an exception to the rent cap based on the right to a reasonable return on investment.
The voter-approved initiative is based upon several findings, some of which include: More than 50 percent of those who live in Saint Paul are residential tenants; in order to hold onto or find adequate rental housing, many residents pay a significant percentage of their monthly income on rent; and the current shortage of rental units combined with rent levels have a negative effect on the health, safety and welfare of a substantial number of residents, particularly in low- and moderate-income households and those on fixed incomes. (Find the full list of findings in ordinance text.) The Ordinance did not address whether newly constructed rental units would be covered.
Planning For Implementation
Following passage by Saint Paul voters in 2021 and building on a preliminary assessment conducted by the Office of Financial Empowerment, the City has been focusing on three core areas: Exempting new construction, convening members of our community, and drafting the rules and processes needed to administer the law.
New Construction Exemption
The Residential Rent Stabilization Ordinance approved by Saint Paul voters centers a policy goal of ensuring Saint Paul residents have access to affordable housing. Exempting new construction from the rent ordinance is a key part of ensuring we continue to provide new housing growth in Saint Paul, and is consistent with the policy goal of ensuring Saint Paul residents have access to affordable housing.
Convening Members of Our Community
The second area of focus is convening members of our community to collectively explore how to balance our critical goals of equity and growth. The Rent Stabilization Stakeholder Group, which has been meeting since February 2022, includes representatives from impacted groups including renters, homeowners, advocates, experts, owners and landlords of various scales and configurations of rental properties, real estate finance and legal professionals, staff and others. This group will make recommendations toward improving and enhancing the rent ordinance by fostering a community conversation that carefully balances the interconnected needs of renters and landlords, while continuing to address our housing needs, advancing our economic growth goals, and our equity and affordability goals.
Administering the Law
The Mayor directed staff to look at the many factors needed to consider in order to implement the Rent Stabilization Ordinance. The preliminary assessment, conducted by the Office of Financial Empowerment, researched and considered several areas, ranging from the development of rules, policies and procedures for governance and enforcement, to the systems that jurisdictions across the country have in place related to rent ordinances.
The Mayor also tasked the Department of Safety and Inspections to lead a cross-departmental group focused on implementation, which was charged with proposing rules and processes based on ordinance language and overseeing the production of educational materials.
Draft rules and forms were published in early April and a formal public comment period was established, from April 7-22.
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