Not Worth The Risk: Minneapolis And St. Paul Should Say No To Rent Control Measures On November 2

By The Sensible Housing Ballot Committee (SHBC)

There are two initiatives on the November 2 ballot: in Minneapolis, Question 3 is a vague, untried, and untested measure that asks voters to give new, additional powers to the City Council, so they can regulate rents on private residential property. Supporters have few answers about exactly how much a rent control program will cost Minneapolis taxpayers, renters, and property owners. Question 1, up for a vote in St. Paul, would prevent property owners from raising rent past 3% – even if property taxes, utilities, and other costs raise past that. Both rent control measures cause the quality of rental properties to take a downward turn. Under rent control, small property owners can’t cover the spiraling inflation costs of regular property maintenance and important equipment upgrades, so renters end up in lower quality housing. Many rental units are converted to expensive condominiums, leaving fewer, older, and poor-quality rentals on the market. Direct renter assistance is a better way to help renters, so that they can make their own choices rather than trust politicians to make these decisions

The Star Tribune Editorial Board encourages voters in both cities to reject these initiatives, writing, “Into this environment come ballot questions in both cities leading the way to limits on how much rents can rise. Given the factors above, the idea may seem appealing. Nonetheless, voters should reject both initiatives – in St. Paul because the ballot question tells voters exactly what it would do, and it’s worrisome; in Minneapolis because it doesn’t, which is worrisome; and in both cities because any short-term benefits are likely to be undermined in the long run by the larger forces of economics.”

Here is the language you will see on your ballot for Question 3:

“Shall the Minneapolis City Charter be amended to authorize the City Council to regulate rents on private residential property in the City of Minneapolis, with the general nature of the amendments being indicated in the explanatory note below, which is made a part of this ballot? Explanatory Note: This amendment would: 1. Authorize the City Council to regulate rents on private residential property in the City of Minneapolis by ordinance. 2. Provide that an ordinance regulating rents on the private residential property could be enacted in two different and independent ways: a. The City Council may enact the ordinance. b. The City Council may refer to the ordinance as a ballot question to be decided by the voters for approval at an election.”

There are a number of concerns with this Minneapolis ballot question.

If enacted, Question 3 will put even more power into the hands of the City Council and takes it away from citizens who have worked hard to create rental properties for the community.
It lets the City Council create a rent control ordinance with no further voter approval. We have no idea how much their plan will cost, how it will be enforced, whose properties will be included, or who will qualify for a rent-controlled property.
We don’t know if a new bureaucracy will be needed to police rent control or if the costs of enforcing this new law will take away funding from other important city projects and services citizens may need.

In St. Paul, the Question 1 proposal is equally problematic.

Under Question 1, St. Paul property owners would be unable to raise rent past 3% – even if property taxes, utilities, and other costs raise past that.
Question 1 will enact rent control without any exemptions, not even for Mom-and-Pop property owners who use rental income for repairs and maintenance – which will lead to fewer, poorer-quality housing options for renters in our city. St. Paul has thousands of properties that are owned and rented out by families and individuals. It’s not builders who will go under if rent control passes. It’s the young couples who purchased a rental property so that they can supplement their income and begin to start a family. It’s the entrepreneurs who are working hard to increase their generational wealth and financial security by acquiring and renting properties. And retired seniors, living in a duplex on a fixed income, who rely on the rental income from the upstairs unit will also be adversely affected.
New construction is not exempt from Question 1 if the initiative becomes law. Rent control stops the creation of new housing opportunities, as builders, frightened off by excessive local regulations, will create new housing elsewhere. An already severe housing shortage will be made even worse.

Based on the facts presented by experts, whatever perceived short-term gains there may be from enacting a rent control measure, those will be negated by the adverse long-term consequences harming both renters and property owners. Everyone can agree that housing affordability is a serious problem – but rent control is clearly not the answer.

The Minneapolis Star Tribune reported, “Among economists, rent control has long been considered a textbook example of bad public policy, one that messes with the smooth function of the housing market while failing to consistently help those who really need it.”

On November 2, voters in Minneapolis on Question 3 and on Question 1 in St. Paul should vote no after they learn how rent control will hurt renters and small property owners alike.

Scan these QR codes to learn more about both initiatives.

Prepared and Paid for by The Sensible Housing Ballot Committee, 1600 West 82^nd Street, Suite 110, Minneapolis, MN 55431