The Minneapolis City Council Housing Policy & Development Committee voted to direct city staff to contract with one or more consultants (vendors) to undertake an economic impact analysis regarding rent stabilization as a component of housing policy in Minneapolis.
By Ellison and Bender
Directing the City Coordinator’s Office, with assistance from Community Planning and Economic Development and Regulatory Services to contract with one or more consultants to undertake an economic impact analysis in order to evaluate rent stabilization as a component of housing policy in Minneapolis. The consulting contract should be in place no later than March 15, 2020. Staff should bring an update on progress to the Housing Policy and Development committee by November 13, 2019
The contract deliverables generally should include the following:
Establish a baseline and identify key factors for assessing annual rent increase caps as a rent stabilization policy in Minneapolis, which may include:
- Distribution of rent burden, rent cost trends, rental vacancy and turnover
- Composition of housing stock including age, ownership and geographic distribution of rental property
Analyze these key factors within the Minneapolis context to understand potential impacts on renters and building owners. Key factors could include:
- Financial analysis of return on investment for rental property owners
- Economic impacts to overall local economy and housing supply in the short and long term associated with capping annual rent increases
- Housing stabilization outcomes for tenants
Provide potential models for consideration of rent stabilization policies that include rent increase caps and the economic impact of those models.
In describing the need to further study the issue of ‘Rent Stabilization,’ including capping rents, Council President Bender stated, “It’s time to further study this issue and ask the question should we even before asking the question could we,” a reference to a MN state law prohibiting rent control.
The vote of the Housing Policy Committee was 6-1. Councilmembers Gordon, Ellison, Reich, Bender, and Schroeder voted in the affirmative. Councilmember Goodman voted nay.
In the public statement that was released on social media and signed by Council Lisa President Bender and Councilmember Jeremiah Ellison they offered renter displacement, renter cost burdens, rental vacancy rates and the need to maintain an inclusive and welcoming city as the reasons to further study rent stabilization or rent control.
Next step: City staff to return to Minneapolis Housing Policy and Development Committee on November 13, 2019 with a report about an attempt to contract with a vendor to provide policy advice regarding rent stabilization/rent control.
Does this mean the City of Minneapolis will enact Rent Control?
Not necessarily. Technically they have only voted to fund a vendor to provide policy advice so they can further study it. Though studying, ‘Rent Control’ is certainly a clear indication the council is serious about the issue.
I thought Minnesota Law Prohibits Rent Control?
Yes. Minnesota State Law does prohibit rent control with one major exception.
Minnesota State Statutes 471.9996 does prohibit cities, counties, towns from enacting rent control. However, that law has one major exception. It would allow rent control in cities, counties, or towns if the ordinance, charter amendment, or law is approved in a general election as a ballot question.
What happened to State Legislation to remove the ability to approve Rent Control by ballot Initiative?
A bill, HF 1214, sponsored Representative Pat Garofalo (R-Farmington) was introduced on February 14, 2019, would have repealed the section of Rent Control statute that allows cities, counties, or towns to enact rent control if approved on the ballot. If passed HF 1214 would strictly prohibit rent control and provide no path for approval via a general election ballot question. HF 1214 did not receive a hearing.
So, Minneapolis Could Enact Rent Control, if approved on the ballot?
Yes. Without a repeal of Minnesota State law, the city of Minneapolis would need to conduct a ballot question and ask voters to approve or reject rent control. The process can be initiated by either the city council or by citizen petition. Whether by council or by citizen petition there are detailed requirements and timelines to adhere to just to get the question added to the ballot.
What Housing Markets Across the U.S. already have Rent Control?
As of 2019, five states (California, New York, New Jersey, Maryland, Oregon) and the District of Columbia have localities in which some for of residential rent control is in effect. Thirty-seven states either prohibit or preempt rent control, while eight states allow their cities to enact rent control but have no cities that have implemented it.
Have Rental Prices Risen in the Twin Cities?
The city of Minneapolis has seen rental prices increase by 17% in the years between 2010 to 2017 or 2.4% per year.
California Passed Rent Control Statewide Right?
Yes. In 2019, California passed Rent Control statewide capping rents at 5% plus inflation or 7.2% currently.