After months of debate over the finer points of St. Paul's rent control policy, an amended version of the ordinance went into effect at the start of the new year.
What does this mean for St. Paul tenants and landlords? Here's what you need to know about the latest version of the law.
What does the ordinance say?
St. Paul's rent control ordinance sets a 3% limit on annual rent increases for residential properties. But there are a few catches.
Some types of units are exempt from the cap. And property owners can ask for permission from the city to raise rents more than 3% in a year — they just need to prove they have a valid reason for doing so.
How did we get here?
City officials received a deluge of feedback in the months that followed, including recommendations from a work group commissioned by Mayor Melvin Carter. In September, the City Council approved a set of amendments to the ordinance, some of which rolled back portions of the original law. Those changes took effect Jan. 1.
What changes did the council make?
Two of the council's most notable amendments exempted newly constructed units and affordable housing from the rent cap. They also changed the law so that a landlord can raise rents up to 8% plus inflation if a unit is vacant due to a "just cause" (more on what that means below).
The council also added requirements for notifying tenants if their landlord is seeking a rent increase over 3% and clarified how to handle utility charges.
How do I know if my unit is exempt from the rent cap?
To be considered new, your property must have been built or converted into a residential dwelling within the last 20 years (something the city verifies using the building's certificate of occupancy). To be considered affordable, the law says rents must be restricted for low- or moderate-income families through a government low-income housing program.
Officials encourage property owners to reach out to the Department of Safety and Inspections (DSI) if they believe their units are exempt from rent control. The city can provide a letter of confirmation.
The law says landlords must let prospective tenants know if a unit is exempt from rent control before entering into a lease agreement.
For units that don't fall under those blanket exemptions, when are rent increases greater than 3% allowed?
The law says property owners have a right to a reasonable return on their investments (which the city generally defines as a rental unit's net operating income in 2019, adjusted for subsequent changes in inflation). If landlords can prove that factors like rising inflation or property taxes, increased maintenance costs or capital improvements will prevent them from earning that reasonable return, they can ask the city for permission to raise rents by more than 3% in a given year.
There's also the just cause vacancy rule. If a unit is empty for what the city considers to be a valid reason — a "just cause" — the landlord has the right to raise the rent up to 8% plus the rate of inflation.
What's considered a "just cause" vacancy?
There are several reasons laid out in the law. For instance: A tenant could be evicted for not paying rent. Or a tenant could decide not to renew a lease (the most frequently cited cause so far, according to DSI Director Angie Wiese). The city has a full list of qualifying reasons on its website.
Property owners seeking this extra rent boost between tenants must get city permission to do so. They can file a request online to document their just cause.
Will tenants know if their landlords are requesting a rent increase greater than 3%?
Yes. If a property owner requests a rent increase of more than 3%, the city will send a postcard to the rental address.
Wiese recommends that property owners seeking such an increase apply at least two or three months before leases are up for renewal.
"We definitely are encouraging people to plan ahead," she said, to allow time for processing and potential appeals.
How are requests for rent increases handled?
Once a property owner submits a request online, city staff will evaluate their application — and ask for additional information from the property owner, if needed — to determine whether the request should be granted. Requests for rent increases between 3% and 8% may be self-certified, though all applications can be subject to an audit.
Once the city reaches a decision, staff will inform both the landlord and the tenant (the latter, again, via postcard). Both parties have 45 days to file an appeal if they disagree with city staff's determination.
If no appeal is filed, the rent increase can take place after 45 days. If an appeal is filed, a legislative hearing officer will examine the case and recommend a course of action to the City Council, which has the final say.
Are utilities considered part of rent payments?
It depends. The law says landlords must establish who is responsible for paying each utility in a lease. Rental agreements can require tenants to pay directly for services like natural gas, electricity, water and recycling. Or landlords can pay vendors and charge renters for the costs directly attributable to them. If landlords change how they handle utilities, rent must be adjusted accordingly.
What should I do if I think a landlord is trying to raise rent beyond what's legal?
You can file a complaint on the city's website, via email (email@example.com) or by phone (651-266-8553).
The city will notify property owners if a complaint is filed against them, and staff will review the case. The DSI will determine whether the rent increase is legal. That decision can be appealed for 45 days.
The city can enforce its rent control law through criminal prosecution. Tenants can also seek remedies in court.