Getting rid of rent control remains the best option for St. Paul but new changes are welcome
St. Paul city council is poised to make some changes to its rent control ordinance. According to new reports, the City Council has approved, among others, some of the following changes:
A 20-year exemption from the 3% cap on new construction; the change would also include a “lookback” provision that would eliminate the cap for thousands of existing units. Developers had especially wanted this one.
A “vacancy decontrol” rule that would allow landlords to raise rents to market rate when a tenant moves out. Supporters of the rule said it was needed to let landlords hold down rents for longtime tenants.
Approval of inflation as a valid reason to raise rents because of higher costs, though landlords would need city approval to do so.
As I wrote last week, there is a good reason that rent stabilization policies include provisions such as vacancy decontrol or new housing exemptions. To some extent, such provisions weaken the adverse effects of rent control. St. Paul’s rent control ordinance was so far ahead of its peers. So, making these changes would make the policy somewhat more accommodating.
Getting rid of rent control is still the best policy
However, as American Experiment’s report showed, these provisions do not solve the issue altogether. Even cities that enacted these provisions have not been immune to the effects of rent control. This is evidenced by places like San Francisco which had vacancy decontrol, exempted new housing, and also had a generous rent cap of 7 percent.
While these changes are welcome, getting rid of rent control altogether remains the best policy decision.