The Nation’s Worst Rent Control Law Gets a Few Moderating Fixes
The nation’s harshest rent control law has become less so after the city council of St. Paul, Minnesota, approved a slew of moderating reforms to a voter-passed ordinance that had initially capped rent increases at 3 percent—no ifs, ands, or buts.
The severity of St. Paul’s rent cap saw new building permit applications plunge and developers freeze in-progress housing projects, totaling thousands of units, as their financing partners skipped town. Landlords hiked rents in anticipation of the coming 3 percent cap or started adding separate fees for utilities and trash pickup.
The new amendments passed Wednesday are intended to coax developers back to St. Paul by softening that 3 percent cap on rent increases, while also cracking down on landlords’ ability to evade the law.
It exempts buildings under 20 years old from rent control. Landlords can now also raise rents by 8 percent plus inflation after a tenant moves out or is evicted for “just cause”—such as repeated late payment or damaging the unit. Landlords who file an application with the city can also raise rents by rents by 3 percent plus inflation on existing tenants.
Since May, the city has allowed landlords to apply for exemptions to the 3 percent rent cap, and had been automatically greenlighting rent increases of up to 8 percent.
But housing providers complained that the process was cumbersome and required them to provide extensive documentation of their expenses to justify nominal rent increases. The owners of two St. Paul apartment buildings f
Article from Reason.com