On November 2, voters in St. Paul sent city officials into a frenzy. On that day, voters approved a referendum to impose the most stringent rent control law in the nation upon the city’s landlords. It will be illegal to increase rents by more than 3 percent. And unlike other cities with rent control, St. Paul will not exempt new construction from the regulation. In the weeks since the vote, city officials have been scrambling to implement the law.
One source of confusion is when the law is supposed to take effect. Some think it will take effect in May 2022. Regardless, the city is unprepared to enforce the law. At the time of the vote, the city was nearing the end of its budging process. The budget did not include funds for enforcement. Officials said that they may need to remove funds from other initiatives.
The Council President said, “They [the referendum organizers] did not come to the council or the city first. They just did it.”
One of the organizers for the rent control referendum said, “We didn’t wait for policymakers or funders. We leveraged the power of the people and did it ourselves.” This illustrates a very dangerous trend in America. The “power of the people” means unlimited majority rule. It means that the majority can do as it pleases because it is the majority. In this instance, the majority chose to impose arbitrary price limits on landlords.
Developers have already put some projects on hold. It makes little sense to invest the money to build new housing only to be told what you can charge. So, at a time when St. Paul desperately needs more housing, voters essentially told developers that they don’t want more housing.
The president of the Housing Justice Center said that it is too early to say the sky is falling.
Now is the time for all of us to kind of come together and figure out, are there issues in the way the policy can be implemented that will address some of the concerns developers may or may not have?
Now that they have placed a noose around the necks of landlords and developers, housing activists want to address developers’ concerns. It is a little late for that. Housing activists have demonstrated that they are willing to use brute force to get their way, and they will use that power to force housing producers to do their bidding.