When Minneapolis voters went to the ballot box in November 2021 and, with a 53% majority, empowered their city council to draft a rent control ordinance, they may have expected that ordinance to be ready for their approval by now.
But two years later, the earliest that a rent regulating policy could be back before voters is in 2024. Implementation would be even further down the line.
That’s because on June 28, a winding rent control saga in the Twin Cities took its most recent turn. At a city council meeting held during Eid al-Adha, wherein three Muslim council members were absent for the religious holiday, the council voted 5-4 not to advance a draft ordinance to committee, a procedural hurdle that means a ballot proposal can not go before voters this November as some had hoped.
The three absent council members – Jeremiah Ellison, Jamal Osman and Aisha Chughtai – are all supporters of rent control. Chughtai and Osman wrote the rent control policy in question based on a working group’s recommendations. Their presence at the meeting would have assured that the policy advanced to the next stage in the process.
Council members’ opposition to any rent stabilization ordinance was additionally hardened by events in neighboring St. Paul, where a rent stabilization policy approved by voters in 2021 was diluted by legislators after developers began withdrawing building permits in large numbers.
While the vote was originally scheduled on June 28 so that the three Muslim council members could participate, the date on which Eid al-Adha falls changed 10 days before the meeting. While council members, along with the city clerk, insisted that they had no choice but to go forward with the vote, members of a working group assembled to recommend a rent control policy disagreed. In a strongly worded open letter to Mayor Jacob Frey and city council president Andrea Jenkins, working group members admonished the council for going forward with the vote.
“This vote was held on Eid al-Adha, one of the most important Islamic holidays, a reflection on sacrifice and service to something greater than ourselves,” the letter said. The Twin Cities are home to one of the country’s largest Muslim populations, with an estimated 200,000 Muslims living in the state.
“This vote was Islamophobic, anti-democratic, and empty political gamesmanship,” the letter said. The letter goes on to call the vote “an act of anti-Muslim bias” and accuses Jenkins and other council members of hiding behind procedure to go forward with the vote. “You deprived three Muslim council members of their vote, disenfranchising their constituents as well,” the letter says.
“We made every effort to try to accommodate the Muslim members of our council which is why we are meeting on this day,” council president Jenkins said at the June 28 meeting, adding that no one foresaw the date of Eid al-Adha would change. Jenkins, who voted to advance the measure to committee, acknowledged the absence of three council members but said the council had to move on. “It’s deeply unfortunate, and we have to move forward with the work of the city council.”
How we got here
The city council established the working group in June 2022, composed of 25 people including tenant advocates, developers and property owners, to study and provide recommendations for a rent stabilization policy. The group met over three months and voted for several policy frameworks. Only one framework earned a majority, with 56% of the vote .
The framework that received a majority vote was similar to a rent stabilization policy that passed in St. Paul in November 2021, limiting rent increases to 3% a year with no exemptions for new construction. (The St. Paul policy has since been amended to exempt new construction.)
But when this recommendation was forwarded to the council in December 2022, Frey publicly proclaimed that he would not sign it if it came before him, which would effectively keep the question off the ballot. “If it moves forward to my desk, I will veto it,” Frey said of the policy recommendation for a 3% cap on rent increases.
Frey’s immediate opposition angered working group members, who were alarmed that the mayor had opposed the recommendation without consideration. “Only hours after the working group released its recommendation and the results of its vote, the mayor expressed his unqualified opposition to our recommendation,” working group members wrote in an April open letter. “While we understand that not everyone will agree with our recommendation, we expected our work to be given a more thorough and thoughtful review, particularly given the complexity of the policy issues involved.”
Nevertheless, council members Chughtai and Osman drafted legislation based on that framework and the next step would have been to forward it to a committee for further debate, during the June 28 vote.
While some working group members believed the June 28 vote should have been delayed, working group member Jennifer Arnold, director of the group Inquilinxs Unidxs Por Justicia, said that a delayed vote could have still led to the law being left off the ballot due to the tight timeline. The next council vote wouldn’t be for two weeks at the earliest, and even after the proposed policy was discussed in committee, it must be sent back to the council for further debate. Instead, Arnold believes the council should have forwarded the legislation to committee during the June meeting. She said advancing a bill to committee while it is still being debated is normal, whereas voting down a bill this far in the process is not.
“They chose to take advantage of the fact that their colleagues were celebrating,” Arnold says.
Daniel Suitor, a housing attorney with HOME Line and a member of the working group, tells Next City that council members who voted against forwarding the policy had effectively shut down debate and public input. “This was not a vote on a rent stabilization policy. This was a vote to do the work,” he says.
An uphill battle
But there were other hurdles to getting the policy onto the ballot in November even if it was advanced on June 28. The policy would have eventually required more support on the city council, as it takes 9 council members to override a mayoral veto, which Mayor Frey insisted he would use if a 3% rent cap came to his desk.
And some council members were emphatic in their opposition to rent stabilization at the June meeting. Council Vice President Linea Palmisano called the rent control policy a “distraction” that would not help housing affordability: “We’ve been given clear recommendations on what would help affordability and housing stability in our city,” she said then. “Let’s work on that right now. We can do that if we can clear this conversation out of the way.”
Council member LaTrisha Vetaw was even more strongly opposed. “Rent control has not helped anywhere. It’s not a thing… It’s not going to work in this city. We have work to do,” Vetaw said in the June meeting. She also said rent control would “stop the building of housing,” echoing concerns that Minneapolis would face similar issues as St. Paul.
St. Paul voters approved a rent control ordinance in November 2021 with a 3% annual cap on rent increases and no exemption for new construction. It followed a study from the University of Minnesota’s Center for Urban and Regional Affairs showing that rent control policies did not lead to limits on new construction, but could lead to landlords converting apartments into condos and removing them from the rental market.
The St. Paul law went into effect on May 1, 2022, with significant loopholes that allow landlords to raise rents by up to 8% only by “self-certifying” that their costs had risen, with those certifications only selectively audited, as Next City reported last year. Landlords could also raise rents between 8-15% with a more rigorous review from the city.
The St. Paul law still allowed landlords to raise rents higher than the city’s 20-year average annual rent increase of 2.3%. But developers — some of whom openly opposed the law — pulled building permits, saying that they could not get construction financing with the rent control law in place.
The decrease was sharp, with HUD estimating that there was a 48% decrease in building permits in 2022 from the prior year. But HUD’s data also show that the slowdown began in January 2021, more than a year before St. Paul’s rent control policy was implemented and 11 months before the November 2021 vote. This suggests that developers pulling permits were reacting to the perception of the rent control policy rather than its practical impact.
Despite the policy only being in place for a few months, St. Paul council members voted on a series of amendments, exempting new construction for 20 years and exempting low-income housing. Landlords in the city can also now hike rents when tenants move out by 8% plus inflation. The result is that one-third of units in St. Paul are now exempt from rent control, according to the Pioneer Press.
AsaleSol Young, a working group member and executive director of local affordable housing developer Urban Homeworks, says St. Paul’s rent control debacle loomed large over the working group and the council.
“It seems like they wanted us to specifically respond to what was happening in St. Paul,” Young says. “We know what happened in St. Paul. And of course, that was on our mind, but to reduce our work to that, it’s not reflective of the process.”
Young tells Next City that city council members were blaming their “no” votes on the framework that the workgroup put forward, even though there was still room to debate and amend the policy in committee. “It just seems as though the city council is currently making excuses for their June 28 vote that puts the burden of the process on the working group,” Young said. “We were brought together to inform, not to be the deciding factor.”
In drafting a policy, Young says the working group was concentrating on weeding out bad actors who would raise rents by exorbitant amounts. “We were really trying to figure out, here are these bad actors, how do we create policy that they cannot get around?,” Young says. “Folks that end up with these bad actors tend to be low income black and brown communities.”
Rent control remains controversial, but the housing crisis and a wave of cities pushing for the policy have led to reevaluations. Despite historic opposition from economists, 32 economists recently penned an open letter supporting federal rent control in multifamily apartment buildings with government-backed mortgages, which comprises about a fourth of apartments across the country.
At the June council meeting, council members equivocated over the meaning of the 2021 ballot measure, saying that voters merely wanted the policy to be studied, not enacted. But Arnold, who worked on the campaign to get the ballot measure passed, said tenants she spoke with did expect to have a rent control policy passed soon.
“There were a lot of folks who after that campaign assumed that we would have a policy immediately,” Arnold says. “Rent increases are happening all the time and people are left out to dry.”
Young says that the process of going through the working group only to have their findings dismissed was troubling. “It’s incredibly disheartening, when without seeing the recommendation or without even seeing the work the mayor says that he simply refuses to sign it,” Young says
Suitor believes that elected officials who voted to table the rent control policy will face political repercussions. “This is not a problem that’s going away. This is only a problem that’s getting worse,” Suitor said. “If people don’t think these policies are popular, they’re not paying attention.”
At the June meeting, one council member in support of the policy stressed that by not advancing it, the council did not complete the job voters had asked them to do in 2021. “The city of Minneapolis voted for us to do our job,” said council member Elliott Payne at the meeting. “And that job was very simple. Bring forward a policy. We deferred that to a workgroup. And then when that workgroup brought us a policy, today we deferred that to some date uncertain, and we should be ashamed of ourselves for that.”
This story was co-published in collaboration with Shelterforce, the only independent, non-academic publication covering the worlds of affordable housing, community development and housing justice.
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Roshan Abraham is Next City's housing correspondent and a former Equitable Cities fellow. He is based in Queens. Follow him on Twitter at @roshantone.