Rent control effort moves forward, uphill battle remains

City Attorney’s Office will present rent control legislation to the City Council by the end of June that, if passed, would be on the 2023 November ballot.

The+activist+organization+Home+to+Stay+advocates+for+rent+stabilization+on+June+6%2C+2023.

Image by Photo courtesy of Home to Stay

The activist organization Home to Stay advocates for rent stabilization on June 6, 2023.

by Jack O'Connor

The Minneapolis City Council is advancing plans for rent control, despite opposition from Mayor Jacob Frey. 

The council approved a motion on June 15 aimed at creating a rent control policy that, if approved, would be on the 2023 ballot in November. Frey has vowed to veto the policy if passed, signaling compromise would be needed if rent control is to move forward.

Although Frey’s veto could be overturned with nine votes from the 13-member City Council, it is unclear if the votes are there, according to Osman. Without a compromise or the mayor’s approval, voters will not see rent control on the ballot in the fall.

Councilmember Elliott Payne (Ward 1), representing parts of Como, said Frey’s veto threat goes against what voters want.

“It’s a real disappointment to see the mayor effectively undermining the will of the voters by making a veto threat,” Payne said. “We have a real affordability crisis in the city. We need to have a whole hands-on-deck approach.”

The motion instructed the city attorney’s office to design a rent control policy to ban annual rent increases of 3%. The policy would only exempt rent increases for maintenance improvements.

If the policy passes, Minneapolis will have one of the strongest rent control measures in the nation, according to advocates.

Many advocates, including councilmembers and community organizers, argue rent control is needed to fight the affordability crisis, while opponents say rent control will not solve the problem and will lead to fewer real estate investments in the city.

Rent control after 2021

In the November 2021 election, Minneapolis voters passed an ordinance to allow the City Council to craft rent control policies.

The City Council created the Housing/Rent Stabilization Work Group of 25 renters, landlords, property developers and other stakeholders to discuss and recommend rent control policies on April 23, 2022. From September to December 2022, the work group created two different rent control proposals.

The first proposal matched St. Paul’s 3% rent hike ban, limited exemptions and did not adjust for inflation. The second proposal provided exemptions for new construction and subsidized affordable housing and adjusted for inflation.

Co-director of Inquilinxs Unidxs por Justicia (United Renters for Justice) and a member of the work group, Jennifer Arnold, said while the policy is not perfect, the city needs to pass something to help renters.

“Renters are suffering,” Arnold said. “Even an imperfect policy can protect some renters against the rent increases we are seeing.”

City staff analyzed both proposals in a report, concluding “the costs and detrimental impacts of a rent stabilization policy would outweigh any potential benefits in addressing renter cost-burden.”

In a 7-5 vote, the City Council passed a motion to direct the city attorney’s office to craft a rent control policy to match the recommendations of the workgroup.

Councilmember Jamal Osman (Ward 6), who voted in favor of the motion, said city staff did not have the time or resources they needed to reach their conclusion.

“I don’t think the staff had enough time to look at the data and I don’t think they had considered many things,” Osman said.

Councilmember LaTrisha Vetaw (Ward 4), who voted against the motion, said her colleagues were making a mistake by dismissing the city staff’s report.

“The city’s own staff told the council that rent control would be counterproductive to solving our housing crisis,” Vetaw said in a letter to the Star Tribune. “Yet, many of my colleagues persist in pushing a narrative that rent control is the solution.”

The city attorney’s office should be done making the policy by the end of June or early July, according to Payne.

Payne, who voted in favor of the motion, said while he knows rent control is not the perfect solution to housing insecurity, it is an important first step.

“It’s not a silver bullet that’s going to solve our housing crisis,” Payne said. “This isn’t going to solve all of our housing problems, but it will solve some very specific ones.”

Frey vows to veto

In the past, Frey had said he would veto the 3% policy recommended by the committee and confirmed hours after the motion passed he still would. While initially trying to veto council members Osman and Chughtai’s motion, it was revealed Frey can veto policies, but not motions. 

“I will veto the council’s rent proposal,” Frey said in a statement after the council’s vote. “I do not support a policy that has consistently proven to be counterproductive to housing supply and affordability.”

Arnold said Frey needs to work with rent control advocates to find a compromise.

“The majority of the voters voted for this,” Arnold said. “It’s really important that Mayor Frey takes this seriously and doesn’t just say no, but works to build a compromise.”

If the council approves putting the rent control policy on the November ballot, Frey could then veto it. For rent control to be on the 2023 ballot, it will need support from at least nine council members Frey’s approval or a compromise to be made between him and the city council.

Osman said council members need to compromise to give voters an option on rent control.

“This is a policy our residents wanted,” Osman said. “I’m hoping to compromise and that’s what most of our council members want.”

Arnold said voters need to be given a choice on rent control, even if the policy is not as strong as she would prefer.

“We want the strongest policy possible for renters, but we understand the political reality,” Arnold said. “We think it’s more important to have something than nothing.”

University of Minnesota student Dulce Garcia, who lives at The Quad on Delaware, said the need for affordable housing keeps rising, yet no action is being taken.

“The cost of tuition is going, the cost of living is going up, yet people are still trying to make ends meet,” Garcia said. “It’s just not fair.”