APRIL 2021
Housing Equity Now Saint Paul (HENS) Rent Control Effort
There is an effort to implement Rent Control in the City of Saint Paul. In Minnesota, rent control is prohibited (with an exemption), “No statutory or home rule charter city, county, or town may adopt or renew by ordinance or otherwise any law to control rents...” The exemption explains that a city must change their charter by putting it to voters and receiving a simple majority. If the charter is amended, the rent control policy would also have to be approved by voters.
Housing Equity Now Saint Paul (HENS) has started a petition to use this exemption to get Rent Control on the ballot in November, this is their proposal: “No landlord shall demand, charge, or accept from a tenant a rent increase within a 12 month period that is in excess of 3% of the existing monthly rent for any residential rental property.”
HENS’s goal is to obtain 10,000 signatures by June 1st of this year, despite only needing about 5,000 signatures.
HENS says the reason behind their proposal is, “that the present shortage of residential Rental Units and the prevailing Rent levels have a detrimental effect on the health, safety, and welfare of a substantial number of Saint Paul residents, particularly persons in low and moderate income households, and persons on fixed incomes who reside in the City; that residential Tenants constitute over 50% of the residents in Saint Paul; that residential Tenants suffer great and serious hardship when forced to move from their homes; that the community is impacted by housing instability when rent increases outpace incomes; and that the welfare of all persons who live, work, or own Property in the City of Saint Paul depends in part ensuring that Saint Paul residents have access to affordable housing.”
Rent Control is widely believed by economists to be ineffective. “According to the basic theory of supply and demand, rent control causes housing shortages that reduce the number of low-income people who can live in a city. Even worse, rent control will tend to raise demand for housing — and therefore, rents — in other areas.” This Rent Control proposal will guarantee a 3% rise in rents, it will likely result in landlords taking their rental properties off of the market, which will reduce the much-needed supply of housing.
If you would like your voice to be heard regarding this move to implement Rent Control in Saint Paul, please fill out this survey!
S.A.F.E. Tenant Protections Lawsuit Update
A group of landlords recently filed suit against the City of Saint Paul to stop implementation of the S.A.F.E. Tenant Protections ordinance that was passed in July 2020 and became effective March 1, 2021.
The S.A.F.E. in the S.A.F.E. Tenant Protections ordinance stands for Stable, Accessible, Fair, and Equitable. The chapter ordinance restricts how landlords can screen potential tenants, sets a limit on security deposits, reduces the number of “just causes” for removing a tenant, implements an advance notice policy, and sets a rent affordability limit, among other things.
The lawsuit, filed in U.S. District court on February 15, 2021 by 19 rental property owners in Saint Paul, highlights Saint Paul’s “just cause” mandate that was intended to prevent non-renewals of apartment leases, impose guidelines for tenant screening and require the advance notice of sale of affordable housing. The lawsuit alleges that these new housing protections are violations of due process rights, illegal takings, and mandated forms of speech, and make it harder for landlords to screen out unreliable tenants or remove them if tenancy problems develop.
On Monday, Judge Magnuson wrote that the ordinance is likely to be found unconstitutional as he ordered the City of Saint Paul to stop enforcement of the ordinance while the lawsuit is pending.
Judge Magnuson referenced the 5th Amendment in his Preliminary Injunction, “Plaintiffs claim that the ordinance operates as a per se taking because it singles out private landlords to ‘address a perceived, though vaguely identified, societal problem’ related to housing needs. The Court agrees,”
He also referenced the 14th Amendment, and the need for the ordinance to pass strict scrutiny. “[The] Defendant fails to address Plaintiffs’ argument that the right to exclude others is fundamental, and instead argues that the right to rent has not been established as fundamental and thus strict scrutiny does not apply. As Plaintiffs argue, the ordinance contains no proposition that criminal records of a certain age, poor credit ratings, or adverse credit histories impedes Saint Paul residents from securing housing that they could otherwise afford. (Pls.’ Supp. Mem. at 27.) The ordinance thus fails to pass the exacting requirements under a strict-scrutiny analysis.”
Enforcement of the S.A.F.E. Tenant Protections is paused until the Court makes a final decision regarding the ordinance’s constitutionality.
SPAAR member and Saint Paul landlord Sue Nichols says she hopes “there is a chance the city will work with property managers and landlords” on addressing affordable housing needs, and “not see (property owners/landlords) as adversaries.” Sue also noted that this ordinance and other efforts by the City have made Saint Paul property owners seriously consider whether they should remain in the Saint Paul market. Sue and other Realtors® want to work on the affordable housing issue with the City but feel that the S.A.F.E. Tenant Protections Ordinance violates their constitutional rights.
SPAAR will continue to monitor and keep SPAAR’s Realtor® members up to date on these legal proceedings as they unfold. If you would like your voice to be heard regarding the S.A.F.E. Tenant Protections in Saint Paul, please fill out this survey!
