Several St. Paul multifamily housing projects were put on hold due to financial concerns over the rent-control ordinance passed this November. The Lexington Station apartments in Frogtown had their fair share of hurdles even before the new law took effect when community groups and the St. Paul City Council attempted to block the project due to a lack of low-income units. Mayor Melvin Carter vetoed the blocking, but even with mayoral approval, concerns over rent control have soured investors.
Developer Alatus lost financial backing for the $70 million Lexington Station apartments citing rent-control concerns being the reason. The new calculus on multifamily properties will make them harder to finance in Minneapolis and St. Paul, which keeps developers reluctant to take on new ventures. Although Carter has expressed interest in modifying the ordinance to exempt new construction from the rent control cap, no concrete steps have been taken towards this measure.