ST. PAUL — A Minnesota Senate panel on Tuesday, March 15, voted to strike rent control measures in Minneapolis and St. Paul and block ballot questions on the subject moving forward.
On a voice vote, the Senate Committee on Local Government Policy approved a bill that would prevent future municipal ballot initiatives that cap annual rent increases on private properties. And the move would apply retroactively, overturning voter-approved measures in the Twin Cities.
St. Paul voters in November approved a 3% annual increase on rental properties and Minneapolis voters advanced a plan laying the groundwork for the city government to cap increases, as well.
Sen. Rich Draheim, R-Madison Lake, said he brought forward the bill following reports of investors pulling funding from St. Paul because of the ordinance. And he said it was important to preempt additional caps to maintain and grow the state's housing supply.
"If there's one bill that I think would make the most difference in housing costs, this is it," Draheim said. "Rent control hurts our ability as a state to build more (housing) units."
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Minnesota real estate agents and the state's multi-housing association said the state faces challenges in building enough housing to accommodate all the people who need it. And that has driven up the price of houses and rental units.
The groups urged lawmakers to consider policies that make more housing options available rather than setting caps on annual rental rates. The policy in St. Paul had deterred development in the city, they said.
“We can already see the chaos that it’s created,” said Cecil Smith, president and CEO of the Minnesota Multi Housing Association. “Advocates for the rent control chose to create the most restrictive policy for rent control in the United States and it has been disastrous for our housing market.”
Twin Cities renters, voters, city councilors and ballot initiative organizers, meanwhile, said Minneapolis and St. Paul residents approved the policies and those changes shouldn't be struck by lawmakers who live outside the two cities.
"Folks in state government, who don't live in this community, are trying to interfere in local politics," St. Paul resident Wintana Melekin said, noting the ballot initiative was composed with the input of St. Paul residents. "I'm confused why there are Senate folks not from here trying to dismantle it."
Democrats and some Republicans on the committee said they had concerns about overriding local authority and the will of voters on the ordinances. But they agreed that the state should do more to boost housing availability and support for those who can't afford rent.
“I think the people have already spoken and we need to listen to them,” Sen. Steve Cwodzinski, DFL-Eden Prairie, said.
The bill moves now to the Minnesota Senate for a vote. It is unlikely to pick up support in its current form in the Democratic-Farmer-Labor-led House of Representatives.
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Follow Dana Ferguson on Twitter @bydanaferguson , call 651-290-0707 or email dferguson@forumcomm.com.
