Mayor Melvin Carter proposed a rolling rent control exemption for newer housing during his annual state of the city address Tuesday, disappointing some leaders and comforting others.
Carter said he is drafting a policy that would provide a rolling exemption for new housing that is less than 15 years old. Thousands of units are currently on pause and it is critical to signal that St. Paul welcomes new housing to aid the city's supply problem, he said.
"Every single city that we can find with a rent stabilization policy in place provides an exemption to incentivize construction of new housing units, and so should we," Carter said.
Advocates behind the rent control proposal approved by voters in November championed its designation as a policy with the strongest renter protections in the nation.
Tram Hoang, the former Housing Equity Now campaign manager and current director of policy and research at the Housing Justice Center, was disheartened by the mayor's decision to bring an ordinance to the City Council without engaging with the thousands of residents who voted for the stabilization policy.
"The proposed exemption has the potential to be very harmful, but more importantly, solves a problem that doesn't exist," Hoang said.
The ordinance would apply to both residents building duplexes and large developers building apartment buildings, said Carter. It would also establish a Jan. 1, 2023, effective date, making a legal challenge unlikely as it would be past the first year of the ordinance, he said.
"There are some who, I know, can't wait to suggest that this is a favor for big developers or something along those lines," Carter said. "The basic supply and demand curve says that if our passion is protecting against big rent price increases and ensuring that people can live affordably and with dignity and sustainability in our community, that's just not possible in a city with an extreme and worsening shortage."
The exemption would be retroactive — meaning a building built 10 years ago would be exempt from rent control for five more years.
The draft of this ordinance was sent to the City Council on Tuesday, and Carter said he is prepared to sign it into law.
Placing the blame for the housing shortage on an ordinance not yet in effect is simplistic and puts the burden of change on low-income renters, said Hoang.
"If we want to see how rent stabilization will actually impact our housing market, we have to follow the basic principles of research — let it happen and study the results," she said.
St. Paul needs all the new units the city can get, and Carter's proposal appears to be in alignment with all other cities across the country, said Council President Amy Brendmoen.
Brendmoen hopes the new rent stabilization stakeholder commission will share its perspective, she said.
Council Member Jane Prince, who expressed concerns about the potential economic impacts of rent control ahead of last fall's vote, said she is leery of making piecemeal changes to the ordinance before community members have the chance to weigh in.
"I think the best way for the stakeholder process to be a good one is if it actually informs the city's next steps," Prince said.
The stakeholder group also held its first meeting Tuesday. The 41-member committee, created to inform future iterations of the rent stabilization policy from November on, focused on introductions and heard from Carter.
The commission is charged with exploring how rent stabilization should operate in St. Paul, not whether it should, said Center for Urban and Regional Affairs Director Ed Goetz, who leads the group.
"The conversation that we're having is about the medium to long term, what the program should look like going forward, what ways it should be different, if at all, from what the voters approved," Goetz said.
The commission's role will be separated into two parts: learning together and deliberation. The first part of the sessions will include history and legislative context surrounding rent control, decontrol, exceptions and exemptions as well as other topics.
The second part will include an April 12 public hearing. The commission will deliberate and prepare a final report to deliver to the mayor on June 24.
View future commission meetings at stpaul.gov/rent-group.
Staff writer Katie Galioto contributed to this report.