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St. Paul says building permits surge despite rent control, but HUD figures don’t align – Twin Cities

For months, St. Paul developers, elected officials and even some housing advocates have bemoaned the seemingly woeful state of the city’s new multi-family housing starts, apparently brought to a near-halt by uncertainty over the city’s new rent-control ordinance.

But a new analysis of residential building permit applications tells a different story. From the beginning of January through the end of June, developers sought construction permits for 915 residential units in St. Paul, well above the five-year average of 790 units, according to figures provided by the city’s Department of Safety and Inspections.

Through June 30, the city reports it has received 74 building applications for this year, up from 45 last year and 44 in 2020 over the same period.

“The city has seen an increase in applications for new residential construction so far this year,” said Suzanne Donovan, a spokesperson for the department. “Overall, the new construction applications and numbers of units are generally up.”

Pointing to seemingly contradictory numbers from the U.S. Department of Housing and Urban Development, developers have balked at that conclusion. HUD figures show that through June, building permits were issued for 288 new residential units in multi-family buildings this year, down precipitously from 1,587 units in the same period last year.

A man seated, with a walker in front of him, holds up a sign that says, 'PROTECT ALL SAINT PAUL RENTERS.' He is wearing a gray knit hat and a yellow face mask, and warm clothes.
Ralph Coleman, a resident of Dominium’s Legends of Berry housing complex in St. Paul, holds a sign during a public hearing concerning proposed amendments to St. Paul’s rent-control policy at St. Paul City Hall on Wednesday, Aug. 24, 2022. (Scott Takushi / Pioneer Press)

Rent control “has shut down new housing development,” said Tony Barranco, a vice president with the Minneapolis-based Ryan Cos., addressing the city council on Wednesday. “It has created uncertainty. It has not helped renters.”

The source of the discrepancy between the HUD and city figures was unclear Wednesday. A spokesperson for the city Department of Planning and Economic Development said director Nicolle Goodman would be unavailable for comment.


According to DSI, compared with the past five years, this year’s planned construction of single-family homes, duplexes, multi-family apartment buildings and mixed-use commercial-industrial buildings with a residential component was second only to 2020, when building permits for the first half of the year spanned 1,068 units.

The city figures would appear to belie common knowledge within the real estate community that new residential construction in St. Paul had ground to a halt, seemingly frozen by questions around how developers might seek exemptions from the city’s new 3 percent rent cap because of inflation, remodeling or other expenses.

Some of that confusion may have blown over. Angie Wiese, director of St. Paul’s Department of Safety and Inspections, informed the city council on Wednesday morning that property owners were contacting her department on a daily basis to seek exemptions to the 3 percent rent cap, at the general rate of one per day.

Year over year, “new residential building permits are up 64 percent,” said council member Mitra Jalali, citing the new city figures while addressing the city council later in the day. “We should have a rational discussion based on the facts … and how the first full year of the policy plays out.”

Standing against a wood-paneled wall, people hold up signs: 'HOUSING = HUMAN (RIGHTS)' and 'IMPLEMENT THE WILL OF THE PEOPLE.'
People hold signs during a standing-room-only public hearing before the St. Paul City Council concerning proposed amendments to St. Paul’s rent-control policy at St. Paul City Hall on Wednesday, Aug. 24, 2022. (Scott Takushi / Pioneer Press)

On Wednesday, the city council held a heavily-attended public hearing on a series of proposed amendments that would in some cases fundamentally alter the rent-control ordinance, which was adopted 53 percent to 47 percent by voters last November. The council did not vote on the amendments, which will be revisited in early September, but a long line of impassioned residents — many of them renters — testified for more than two hours.

“We will not be voting today,” said council President Amy Brendmoen. “We’re here to listen.”


Building upon the recommendations of a 41-member city task force, city council member Chris Tolbert submitted a multi-part amendment that would exempt subsidized housing from rent control in the renter-majority city, given that it’s already regulated by other government entities. The Tolbert amendment would also exempt new construction for 20 years, with a 20-year “lookback period.”

Other provisions would allow landlords to “bank” rent increases below 3 percent, allowing them to be deferred, or instituted cumulatively at a later date once a unit is vacant. A targeted “just cause” provision would state that landlords may not fail to renew a tenant’s lease in order to impose a deferred, or banked, rent increase.

Under the Tolbert amendment, landlords completing major renovations would be allowed to apply to the city to spread out rent increases above 3 percent over time. And 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.


In a wood-paneled room, people sit on wooden benches, many of them looking down at paperwork. In the distance, a liine of people wait to speak. A monitor shows the public hearing in process.
People line up to speak at a public hearing before the St. Paul City Council concerning proposed amendments to St. Paul’s rent-control policy at St. Paul City Hall on Wednesday, Aug. 24, 2022. (Scott Takushi / Pioneer Press)

A long line of renters told the council they objected to any effort to exclude affordable housing from rent control. Eilene Naudain, a resident of the Legends at Berry apartments, a Dominium apartment complex for low-income renters at 777 Berry St., said she moved to Minnesota from New York City’s Harlem to take care of her sick adult daughter, but she had more housing stability in Harlem.

“If this rent goes up 8 percent … I’ll be in the street,” said Naudain, who is facing an 8 percent rent hike. “It’s just ridiculous. I was in New York all my adult life, and I never had this problem. The only thing I like about Minnesota, this state, is their medical facilities are nice.”

Others said the city needed to implement strong “just cause” language that prevents landlords from displacing tenants in order to boost rents on vacant units. Bara Berg, a resident of Laurel Avenue, was among those calling for stronger tenant notification when a landlord seeks an exemption.

“St. Paul is trying to do rent stabilization on the cheap. We need a fully funded rent-stabilization board,” Berg said. “When a landlord submits a request, the notification needs to go out that day to the tenants, so the tenants can be part of what happens. … Exemptions for new buildings is ridiculous, absolutely ridiculous.”

Taking the opposite tack, a spokesman for the North Central States Regional Council of Carpenters told the city council that the best way to boost housing supply would be to implement a 30-year exemption from rent control for new construction.

Agreeing, Barranco of the Ryan Cos. said the best policy for renters “is the immediate and full repeal of rent control.”

Scott Cordes, chief financial officer for Project for Pride in Living, an affordable housing provider, said he supported exempting subsidized housing from rent control because the funding and regulatory environment providers operate in is already complex, and rent control adds another level of complexity.


St. Paul City Council President Amy Brendmoen speaks into a microphone.
St. Paul City Council President Amy Brendmoen presides during a public hearing concerning proposed amendments to St. Paul’s rent-control policy at St. Paul City Hall on Wednesday, Aug. 24, 2022. (Scott Takushi / Pioneer Press)

Jalali, who has sought to rein in most of the Tolbert amendments, has submitted four proposed amendments of her own. She said she was especially opposed to exemptions for subsidized housing, a proposal she said would negatively impact residents of color.

She noted that rent limits for federally-backed housing set by HUD take into account incomes outside the city and are far above St. Paul’s own median incomes. In short, she said, the city’s low-income renters need additional protections.

Council member Jane Prince, who was absent due to illness, introduced an amendment allowing full vacancy decontrol, meaning landlords would be able to bring a unit to market rate once it is no longer occupied.

Brendmoen introduced an amendment that would require developers seeking an exemption to rent control to pay their construction contractors a prevailing wage.

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