Housing construction down in St. Paul since rent control passage

The consequences of St. Paul’s rent control policy continue to pile up. While Mayor Melvin Carter is looking for a way to amend the policy, numbers show that construction has gone down in the three months since the passage of rent control, at least when compared to the year before.

According to data from the U.S. Department of Housing and Urban Development, as reported by Minnpost, between November 2021 and January 2022, St. Paul issued a total of 224 permits for multifamily housing units. However, in the period a year before — November 2020 to January 2021 — total multifamily building permits issued were more than three times that number, at 701 units.

On the other hand, Minneapolis has seen growth in the number of permits issued for multifamily housing units between the same two periods.

It is important to note that while permits for multifamily housing units were up in 2021 from 2020 in the Twin Cities Metropolitan region, they were down in both Minneapolis and St. Paul — with Minneapolis seeing a greater decline between 2020 and 2021. This is potentially due to pandemic-related factors.

However, the decline in housing permits for St. Paul is especially pronounced towards the end of 2021, which strongly points to rent control being a contributing factor to this trend. Since July 2021, St. Paul has seen a downward trend in its six-month rolling average of new multifamily building permits, while Minneapolis has seen an increase.

Moreover, while generally, St. Paul permits fewer housing units compared to Minneapolis, this is the first time since 2019 that (six-month rolling) average housing permits have stayed consistently under 100 for multiple consecutive months.

As seen from the chart above, multifamily housing permits have consistently stayed below 100 units since July 2021 and show no signs of budging. This potentially points to more repressed housing construction activity, considering that some projects are already on pause.

It is a concerning trend

Technically speaking, total permits for multifamily housing units in St. Paul in 2021 are only slightly down from 2020. What is concerning, however, is the consistent downward trend in the last half of 2021. While Minneapolis seems to be rebounding, St. Paul has been going in the opposite direction, with no sign of improvement.

In recent years, St. Paul has made significant gains in housing construction. But thanks to rent control, it looks like that trend could be coming to an end.