If Dominium, a Plymouth-based developer of affordable housing, raises her rent 8 percent as planned, Stephanie Ericsson-Hinton figures she’ll fork over 75 percent of her Social Security income toward housing. She says she already skips medical appointments because she can’t afford the co-pays. Two weeks ago, she visited a food shelf for the first time in her life.
“I can make a dollar stretch, but there’s no more stretch,” said Ericsson-Hinton, a 69-year-old widow, during a tenant speak-out on Monday organized by ISAIAH and the Housing Justice Center in front of the Legends at Berry apartments, which are located on Berry Street in St. Paul.
On Wednesday, members of the St. Paul City Council are expected to introduce a raft of competing amendments to the city’s new rent control ordinance, which is intended to cap rent increases at 3 percent annually.
The amendments seek to clarify, extend and, in some cases, limit the types of exemptions for landlords.
City officials have acknowledged that the “rent stabilization” ordinance approved by voters last November is among the strictest in the nation, and it’s had a halting effect on new rental construction in St. Paul.
A NUMBER OF AMENDMENTS
A multi-part amendment authored this summer by Council Member Chris Tolbert would, among other things, exempt affordable housing established with federal low-income housing tax credits or backed by Section 8 housing vouchers. It would also exempt new construction for 20 years, with the clock, or lookback period, starting 20 years ago.
“This isn’t something written in stone,” said Tolbert. “This is something that needs to be molded.”
Council Member Mitra Jalali plans to introduce four amendments of her own, some of which are designed to roll back changes sought by Tolbert.
“I’m trying to restore tenant protections to a proposal that would erode them for a lot of people,” said Jalali. “There are aspects of the Tolbert amendment that do make necessary implementation improvements, but there are parts that go too far.”
Council Member Rebecca Noecker and Bruce Corrie, an economist and former director of the city’s Department of Planning and Economic Development, are likely to present amendments of their own on Wednesday.
The public hearing is scheduled to begin at 3:30 p.m.
TOLBERT AMENDMENTS
Members of a city task force on rent control have expressed alarm at what’s been deemed a dramatic slowdown in new multi-family housing construction in St. Paul. Some developers have described an 80 percent drop, though city officials caution that year-to-year comparisons can be misleading.
To better determine the extent of the slowdown, City Council President Amy Brendmoen has asked city planners to perform a comparative analysis of building permits issued for multi-family construction going back five years or so.
Tolbert in late July introduced several potential rent control amendments. Among them, new housing construction would be exempt from the 3 percent cap on annual rent increases until 20 years after a new building certificate of occupancy is issued, with a 20-year lookback period.
Also proposed:
- Affordable Housing Exemption: Certain types of low-income housing programs would be exempt from rent control.
- Partial Vacancy Decontrol: For existing rentals, “banked” rent increases below 3 percent could be deferred, or instituted cumulatively at a later date once a unit is vacant.
- Just Cause: Landlords may not fail to renew a tenant’s lease in order to impose a banked increase. A landlord completing an application for a “reasonable return on investment” exemption above 3 percent, or RROI application, would have to attest in writing that the unit became empty for an allowable reason, such as substantial property damage or non-payment of rent.
- Renovations: In order to recoup their investment, landlords completing major renovations would be allowed to apply to the city to spread out rent increases above 3 percent over time.
- Tenant Notifications: The city would be required to notify tenants that their landlord has received approval for a “reasonable return on investment” exemption to the 3 percent rent cap.
JALALI AMENDMENTS
Partially in reaction to Tolbert’s proposals, Jalali has introduced four of her own. They range from requiring the city to improve tenant notifications when developers seek exemption to rent control, to eliminating a lookback period that would automatically exempt real estate constructed over the past 20 years.
Her first amendment, related to tenant notification, would require the city’s Department of Safety and Inspections to notify tenants when a landlord applies for an exception to rent control. It would offer tenants more time — a total of 45 days — to appeal a final determination from the city.
Currently, “you don’t even know whether your landlord is pursuing an exception, and then you only get told if they were granted one,” Jalali said.
Her second amendment relates to “just cause” notices within Tolbert’s amendment, as well as relocation assistance. Calling the term “disorderly conduct” vague and subjective, Jalali has advocated for not including the language among allowable “just cause” reasons why a landlord might not renew a lease. She noted property destruction or violence toward another tenant would still be covered under other provisions, such as a material breach of lease.
The same amendment would require landlords to provide relocation assistance to tenants displaced by landlord-driven actions, such as remodeling a property to go more upscale.
Jalali’s third amendment would ensure that rent control pertains to certain types of affordable subsidized housing, including rental housing backed by federal low-income housing tax credits and federal Section 8 vouchers. Developers such as Dominium have claimed that housing constructed with low-income housing tax credits is exempt as a result of both federal and local agreements that supersede city-driven rent control policies.
“It basically restores what the original rent control ordinance passed by voters was,” Jalali said.
The ordinance approved by voters last November does exempt federally-managed public housing.
Her fourth amendment would alter Tolbert’s proposed 20-year retroactive and future exemption for new construction, limiting it to 15 years with no lookback period.
OTHER AMENDMENTS
Corrie, the former PED director, has recommended further changes to Tolbert’s proposed 20-year exemption for new construction.
For affordable housing that receives public subsidy to qualify for the 20-year exemption, the landlord would have to agree to keep the units affordable for more than 30 years, and at least 10 percent of the units would have to be affordable to households earning no more than 30 percent area median income, according to Corrie’s proposal.
In addition, under Corrie’s amendment, a developer would have to contribute .005 percent of the project cost into the city’s housing trust fund for affordable home ownership and rental programs.
