There’s been a lot of talk about guinea pigs and rent stabilization lately. In fact, the Minnesota Multi Housing Association recently sent me a picture of a guinea pig! They even hired someone to come to my house and give me a second picture of a guinea pig! It’s almost like the Minnesota Multi Housing Association remembered my birthday. I love guinea pigs!
It was weird, though, because the MMHA went to great lengths to hide that they were the MMHA. It makes sense: I can’t imagine that people would think the people who sued to evict people during a pandemic can be trusted to offer common sense.
Still, I was amazed they didn’t even bother to buy a second domain name. I had to screen grab it because I couldn’t believe you would spend so much money on a marketing campaign but not spend 45 cents to buy domain. But hey, there was a guinea pig on it! I love guinea pigs!
This begs the question: what do guinea pigs, like actual real life guinea pigs, think about rent stabilization? Lucky for you dear readers, I am a landlord. I rent my living room out to Edward and Norman: two social critics. Currently they are 4 years behind on rent because neither of them has jobs or the same number of fingers as toes. I’m not gonna evict them, though, because they are guinea pigs! Like, actual real life guinea pigs! I’m not gonna evict a guinea pig. I love guinea pigs!
So instead, I have chosen to interview Edward and Norman about rent stabilization. They plan to vote yes. It’s gonna break their tiny hearts to hear that they—like all the landlords from White Bear lake putting “Vote No!” signs up in their Saint Paul rental properties—can’t vote.
We recently received a mailer arguing that Saint Paul should “not be a guinea pig” by having rent stabilization. What do you think about that?
Edward: What do I think about that? I’ll tell you what. WHEEK those people and WHEEK that flyer.
Norman: Edward, you said you wouldn’t do this. People with thumbs will read this.
Yea, Edward. Streets.MN is not Parler: Streets has has community standards. Clean it up.
Edward: Okay, Okay. I just get really mad when people talk down to guinea pigs. I’m a living thing. I’m not disposable.
Let me tell you something about guinea pigs: we are social creatures. It is literally illegal in some countries for us to be lonely. The idea that a guinea pig misunderstands social policy is absurd.
Our entire life revolves around creating a safe environment for ourselves and our fellow living thing. We literally have evolved to be the only rodents who sleep at night so we can hang out with human beings. We are the perfect species to talk about rent stabilization. Who are you going to believe: a guinea pig with 7000 years of pro-social biology or the anti-social capital coalition who spent the last year trying to evict you during a pandemic?
Norman: I think what my colleague is trying to say here is two-fold:
(1) This is obviously a propaganda mailer from the Minnesota Multi Housing Association. Why would you trust someone who doesn’t have your best interest at heart?
(2) Most of the research that has been presented around rent control is wildly biased and incredibly out of date.
What do mean by “most of the research that has been present around rent control is wildly biased and incredibly out of date?”
Norman: Pigfather, I am glad you asked. Most rent control studies really obsess about two cities during the Reagan presidency: New York and San Francisco. Almost all of the articles I have read from “economics experts” invariably address these two case studies. It’s an echo chamber: a bunch of academics keep repeating the same weak conclusions made on a really small data set collected a quarter century ago in cities wildly different than our own.
The New York and San Francisco examples really seem kind of lazy to cite, especially since there has been more accurate and representative data in the last 30 years. Even the Brookings Institute–the very org all these so-called academics are quoting–says that rent control is making a come back.
Tell me about some of this more recent data on rent stabilization, Norman.
Norman: Rent stabilization works. While opponents hammer away at how NY and SF didn’t perfect the art on the first try, rent control since has largely been effective. Rent control creates housing stability that doesn’t cost the city a dime while improving diversity.
Saint Paul is a medium sized city with a small tax base. We have limited resources. So, we can’t build a bunch of public housing for poor folks who shouldn’t be freezing to death during the long winters.
Rent stabilization keeps working people in their homes without sticking the tax-paying public with a massive social bill for rapid housing cost increases. This makes good sense. I’m dumbfounded by how fiscal conservatives fail to celebrate something which perfectly embodies their worldview.
Edward: This doesn’t surprise me. The MMHA cares about one thing: power. People don’t care about anything unless their interests are implicated.
Do you run a factory? You want the money to flow. That’s why you are afraid of strikes. Are you a worker? You need money to buy bread. That’s why you go on strike when they aren’t paying you enough bread. This is a simple labor equation.
Here, the MMHA wants you to think you will suffer if you don’t deal with their increasingly expensive rents. The old school union approach here says “hey, just because I rent doesn’t mean I’m your slave.” The “factory” here isn’t going to shut down: even with rent stabilization the mortgage is easily paid. All we are talking about with rent stabilization is “How much greed should property owners be entitled to by law?”
Norman: I will be clear: I am not like my dear Edward. I don’t entertain wild conspiracies about Jiffy Hoffa. We aren’t talking about a factory here: we are talking about people’s homes.
What Edward fails to discuss is that rent stabilization is in the interests of small landlords. No one benefits by shutting down what Edward calls a “factory.” Similarly, no one benefits from the high turnover and gentrification that comes from rapidly increasing rents. It is expensive for landlords to continually change tenants: it is much better for mom and pop landlords to have consistent tenants who can consistently pay the rent year after year.
Still, I am a guinea pig who prides myself on being an intellectual moderate. Can we discuss some of the fears people have about rent stabilization?
That’s a good point, Norman. Many folks say that rent stabilization will prevent new housing from being built. Is that true?
Norman: The idea that rent stabilization will chill new housing is laughable. Don’t take my word for it: look at the cities that have implemented it. San Francisco, San Jose, and Oakland—three cities with rent control—have built 43% of their area’s new multifamily rentals since 2000. Even with rent control, these cities have build nearly half of the rental stock in their geographic areas.
Plus, the buildings being built in these areas are smaller buildings: the perfect size for a mom and pop landlord. These mom and pop landlords thriving under rent control are incredibly important to racial equity as “Black and Hispanic tenants rent 44 percent of the units in two-to-four-unit buildings.” Remember when the streets.mn echo-chamber was obsessed with “missing middle” housing? That’s the exact type of housing these markets have built–arguably correlated to rent stabilization. This begs the question: If rent stabilization emphatically helps mom and pop landlords, who is sending me mailers saying the opposite?
Edward: Sometimes things are simple: Big money wants big profits. While I appreciate small landlords like pigdad, there is a powerful group of interests that do not care whether I live or die. It doesn’t matter to a national landlord if their property facilitates a community. We need to really focus our attention on these national interests that could destroy our community.
Norman: You are getting a little “tin foil hat” Edward, can you be more specific? Maybe we can talk about HUD Opportunity Zones?
Edward: Your mom was specific . . .
Norman: I swear to God Edward I am going to bite you in the . . .
Guys, no one is gonna bite anyone’s anything. Let’s get back on track: What are HUD Opportunity Zones? What does it matter to rent stabilization?
Edward: You gotta follow the money, man.
Norman: Uh, I think what my colleague here is trying to say is that Opportunity Zones applied to rental housing are kind of scary. Unfortunately, many lower income residential areas in Saint Paul are within the “Opportunity Zone.”
Edward: More like Twilight Zone. What a crap name.
Norman: You’re right there, friend. The federal government made policy that allows excessively wealthy stock holders to buy up property in communities like ours and use it as a tax-write off. These “opportunity zones” aka tax-write offs were created in the equally stupidly named “Tax Cuts and Jobs Act of 2017” by a Texas lawmaker with the vocal support of the son of New York’s legendary slum lord Fred Trump. Simply put, to benefit, a company must be making so much money or cheating so hard on their taxes that they need to write off an entire mid-western city worth of value.
Venture capitalists are not the people who we want to own our homes. Saint Paul is a neighborhood-driven city with many mom and pop landlords. Rent stabilization poses no threat to them. In fact, I would argue rent stabilization benefits mom and pop landlords.
However, mom and pop landlords are getting gobbled up by really big capital companies. If you are a big investor with so much cash in hand that a small city is a tax-write off, you want one thing: return on investment. The fastest way to get return on investment is to rapidly gentrify communities with large cheaply built buildings that charge exorbitant rents.
Rent control serves a very targeted function here. It disincentivizes huge capital firms from gobbling up our homes. If a large investor wants to come in and use an opportunity tax credit to empower start-ups, vitalize small businesses, create green energy infrastructure, or build a much needed grocery store, they are welcomed and encouraged to do so.
Rent stabilization uses market forces to encourage these capital firms to invest in our community instead of buying our homes to flip for a fat tax write-off.
What do you think of some of the local political reactions to rent control being on the ballot?
Edward: It’s hard not to remember the last mayoral election cycle here. During that election, The Saint Paul Chamber of Commerce gave a huge sum of money to print a flyer which implied that the city’s now first black mayor was behind a secret conspiracy of black crime because someone stole a Carter family heirloom. It was a stunning showing of racism and the Saint Paul Chamber of Commerce supported it with a generous donation.
Now, in the face of rent stabilization, The Saint Paul Chamber of Commerce has the gall to declare that they are leaders in equity. This is the perfect example of an organization trying to capitalize on George Floyd’s murder by marching around with a freshly minted diversity statement even though they have a history of supporting deeply racist political action. Now they stand wagging a patriarchal finger at a coalition of rent stabilization organizers that is mostly people of color, saying “Hey, we’re nice to black people. Look, we paid one to write a DEI statement.” Smells like a poop to me.
Norman: Edward, be careful: there is a long history of business organizations being very litigious when you call them out on their obvious racism.
Edward: Whatever, man. Truth is an absolute defense to slander. The solution here is don’t be racist: people have even longer memories than guinea pigs.
Norman: Perhaps the Saint Paul Chamber of Commerce just liked Pat Harris’s economic policies better?
Edward: Hmph. Believe that if you want, Karen. I can’t read anything they say now without immediately thinking “hey, didn’t you give a bunch of money to the most racist mailer I’ve ever seen?” That stink doesn’t wash off.
Norman: All recent racism aside, I have a difficult time taking them serious for the same reasons I gave earlier. They obsess over NY and SF. They completely ignore where rent control works well.
The Saint Paul Chamber of Commerce makes a bad argument. Bad arguments should be disregarded.
What do you think about the local politicians who are weighing in on this ballot initiative?
Norman: I get why they do it. This is an opportunity for them to work on their brand. But ultimately, this is a ballot initiative. The politicians aren’t driving this movement: the people of the city are.
Edward: I am much more critical. Our local politicians are being lazy at our expense.
If all you care about is raising city revenues and getting re-elected, voting against gentrification controls is perfect! First, by building stadiums and high rise apartment, the city gets a rapid influx of capitalized tax base. Second, the stadiums and high rises fix your second problem as you replace the poor people with rich people. Presto: new constituents! It doesn’t matter that you displaced the people who elected you to help them. Those poor people live in Mankato now. Not your problem.
Norman: I have more empathy for local politicians and I do care about the city’s tax base, but Edward makes a good point here about political courage. Implementing rent stabilization is hard: it is a policy that empowers poor folks. Developers have much more political capital and regular capital. City council doesn’t have a ton of leverage against big capital firms.
Bravo to the local politicians who have stood up for their values knowing full well they will be punished. Courage in a politician is rare, but we are lucky to have some fearless representatives here in Saint Paul.
Wow, this has been elucidating. I had no idea guinea pigs were so bright! Any last thoughts, guys?
Edward: We might have brains smaller than an acorn, but understanding rent stabilization doesn’t require a big brain. Sometimes the best solutions are easy and popular. You don’t have to shout “actually” and quote some ancient nerd at every popular idea. Rent stabilization is popular because it helps people. Don’t overthink it. Vote yes.
Norman: Even if you do overthink things, rent stabilization should still be held in high regard. It is localized, targeted, and free. It empowers mom and pop landlords to rent to a diverse community by making locally owned small buildings the new development sweet spot. Plus, passing rent stabilization prevents big capital firms from buying Saint Paul as a tax write-off. Rent control is smart. It is the right policy for Saint Paul’s diverse community. Vote yes.
Norman
Norman is not a fellow at Berkeley’s Haas Institute for a Fair and Inclusive Society. Still, Norman says the Haas Institute has more comprehensive up-to-date studies on rent control than anyone else. Norman’s favorite rap record is Kendrick Lamar’s To Pimp a Butterfly. Isn’t Norman smart? I love guinea pigs!
Edward
You’ll have to forgive Edward. He’s a little sassy, but he comes about it honestly. He never went to college. He’s still quick to remind me that a lack formal education isn’t the kind of thing that should limit “the pursuit of happiness.” Edward is an Edward of the people. Edward’s favorite rap record is Public Enemy’s It Takes a Nation of Millions to Hold Us Back. Isn’t Edward savvy? I love guinea pigs!