Minnesota Senate considers changing rent control statute

Senate legislation would change state statute so that voters could no longer approve rent control policies.

With the passing of rent control measures by voters in both Minneapolis and St. Paul this past November, the Minnesota Senate is proposing legislation that would prevent the implementation of rent control in Minnesota. “If it has an impact on the overall health of our state, then maybe we should step in,” stated Sen. John Jasinski (R-Faribault), as the discussion around Senate File 3414 was wrapping up in the Senate Local Government Committee, the last committee stop before the Senate Floor.

The bill would change state statute so that voters could no longer approve a rent control policy in their city, and it would be retroactive to November 1, 2021, making the two recent rent control votes in the cities of Minneapolis and St. Paul null.

Jasinski cited his own experience renting an apartment in St. Paul as an example of the impact the new policy is having on the market. He said he had never seen more than a 5% annual increase on his rent, but his January bill showed an increase of 43.79%.

“With only one city adopting a rent control ordinance by initiative and referendum, we can already see the chaos it has created,” stated Cecil Smith, president and CEO of the Minnesota Multi Housing Association, during public testimony on the bill. “Advocates for the rent control policy chose to create the most restrictive rent control policy in the United States, and it has been disastrous for our housing market. This policy has taken Minnesota off the national map for housing investment.”

Sen. Rich Draheim (R-Madison Lake), the author of the bill and chair of the Housing Committee, cited recently released Census Bureau statistics that show housing permits in the city of St. Paul have fallen 80% since the passage of the rent control policy. Whereas, the city of Minneapolis, which has not yet drafted a rent control policy, has seen an increase in permits by 68%.

“We all know rent costs too much. We all know buying a house costs too much. That is partially because of supply and demand,” Draheim said. He went on to state that economists nearly unanimously agree that rent control policies are destructive to cities and their potential future housing production.

Having passed through the proper committees the bill was sent to the Senate floor where it awaits further action. The House of Representatives has yet to hear a companion bill.