The Market Will Not Save Us: Why I’m Voting Yes

In the weeks running up to the November election, I’ve watched white liberal courage break in real time. This year, St. Paul residents have the chance to support a ballot measure initiated, researched and led by communities of color, a policy that would fundamentally shift the unbalanced relationship between landlords and tenants. 

Voting yes for rent stabilization should be an easy choice. But an influential fraction of white urbanists has muddled the conversation about Question 1, giving well-meaning white people the opening to turn unfounded caution — and a desperate desire to be “right” — into complicity with landlords and the wealthiest people in our city. 

The “Yes in My Backyard” or YIMBY concept was created as the inclusive, pro-renter contrast to the “Not in my Backyard” or NIMBY movement that has relied on dog whistle racism to oppose new housing in predominantly white neighborhoods. Unfortunately, a small handful of mostly white men have given too many YIMBYs reason to vote no on this critical policy. 

These white urbanists have reassured potential no voters that they’re a good person, that they really care about tenants, they really want rent stabilization, honest, just not this one. They have correctly identified the housing crisis and its devastating effects, but go no further. If they attempted to solve the problem, they’d no longer have the correct analysis. There would be expectations then, responsibility beyond another article weeping for housing supply. 

None of these folks have dedicated thousands of hours to building community, to collecting signatures, to standing up, iron-spined, to the richest people in the city. The Keep St. Paul Home campaign did. The policy on the ballot was created and carried through the petitioning process and to this point by women, organizers of color, and tenants. Those three groups are rarely the engine driving our city’s largest political conversations. But in whiter more powerful circles they are often fretted over. “How do we engage them?” “How can we increase their turn out in important election years?” “How can we find out what resources they need?” I’ve found an easy answer to those questions: Support their work and follow their leadership.  

So it’s both baffling and disappointing that when communities of color are engaged, when renters have an important issue to turn out for in an election, these same people turn into armchair housing experts with superior analysis to those with direct experience of housing instability. 

Among the the paternalistic critiques from urbanists is the assumption that the Keep St. Paul Home campaign didn’t do its homework. That the policy  — which would limit annual rent increases to 3% for all units in the city — will have unintended consequences that the authors weren’t smart enough to see. 

Some of the most common concerns:

The ordinance does not exempt new housing.”

That’s because simply adding new market rate homes to our housing ecosystem and waiting for the mythical trickle down effect isn’t enough. New housing can still be priced profitably for developers but by including it in the ordinance it prevents runaway rent spikes. Homes in our community should be homes, not speculative investment products.

“The ordinance doesn’t index rent increases to inflation.”

As long as worker incomes aren’t indexed to inflation, why should property owners have such favorable profit controls attached to the pricing of their “commodity” (which also happens to be people’s homes). If there were a hypothetical inflation crisis, would we rather see tenants evicted across the city as rents race away from wages, or banks and developers take a profit haircut while neighbors stay in their homes?

“The ordinance does not include vacancy decontrol.”

Vacancy Decontrol is when a unit is freed from price controls after a tenant moves out. It is also the genesis of every horror story about landlords in rent stabilized cities letting their properties degrade to chase tenants out so they can raise the rent. Decontrol is a fiscal incentive for neglect and cruelty. 


Clearly, there’s good reason none of these are included in the ordinance: each has been used as a loophole benefitting landlords.

What’s really in conflict here is the two different frames of thought. YIMBY detractors fear that the ordinance does not offer enough deference and support to the market.  Supporters and directly impacted residents know the market is the genesis of our current housing crisis and we must separate housing from the demands of the profit motive. We have tried market based solutions to address housing supply and we’ve only sunk deeper into this crisis. It’s time for a new approach.

The root of the opposition is as predictable as it is well financed: The Minnesota Multifamily Housing Association. Under the guise of the Sensible Housing Ballot Committee they’ve raised nearly $4 million — the majority of which has come from outside the Twin Cities — for mailers, dialers, and canvassers. This is because no self respecting politico or community leader would do their work for free, shilling for the unlimited profits of those already holding all the cash. That’s why it’s deeply disconcerting to see YIMBYs adopting their talking points, giving every white, college educated, home-owning voter the inciting moment they needed to turn tail from this year’s best chance at moving the ball on the housing crisis.

YIMBYs fail to see that either position on rent stabilization shakes their position as “correct on housing.” In support they would have had to shed their market-based mantras and would have found themselves among socialists and tenants, the full resources of the real estate industry arrayed against them, telling them they’d erred. In opposition they have attempted to have it both ways and it’s cost them their credibility. The real estate industry will be happy to use ‘em and lose ‘em and the tenants will remain powerless as they were before.

Landlords hold an inherent power over renters. Their financial control of a person’s home means that by exercising their right to free speech a tenant may endanger the security and safety of their living arrangement. People are tired of living their lives under threat. People are no longer satisfied by a housing strategy that centers the profits of the community’s wealthiest citizens. People are ready to call the housing industry’s bluff. We need to be brave enough to change the paradigm. The market will not save us, we must save ourselves.

Editor’s note: Find your polling place & sample ballot for November 2nd’s election at the MN Secretary of State website

As outlined in our “About” section: The views, opinions, and positions expressed by each author–and those providing comments–are theirs alone, and do not necessarily reflect the views, opinions or positions of the streets.mn Board or any other site contributor.  Additionally, the editor worked with the writer of this post after publication to remove a few phrases and word choices that had some offended some readers, while leaving the piece’s arguments and main points intact.

Yard sign “Keep St Paul Home: Vote Yes on Nov 2 for rent stabilization”

46 thoughts on “The Market Will Not Save Us: Why I’m Voting Yes

  1. Bill LindekeBill Lindeke

    You are welcome to use my name next time, Tom. All I want is an honest discussion of the pros and cons of different kinds of rent control. It did not take more than a few minutes of scratching the surface of the policy pages on the HENS campaign website to see there were huge problems, and lots of misinformation. Digging into those details is important.

    For example, there is a lot of disagreement about the many different forms of rent control, and the effects that different forms have on the housing supply and on housing equity. Is nobody going to talk about that? I think you’ll see that discussion happening in Minneapolis over the next year. Nobody has once contradicted my key point: the three policy details you mention here are unprecedented, and we should probably try and figure out what combining them in this way will do to the big picture of housing in the city.

    As for whether the HENS campaign has done its homework, they have not. Do we have a sense of even the most basic questions like how fast have rents gone up in the past few years? How many homes will be affected?

    Here again, Minneapolis has “done its homework.” Saint Paul has not.

    You can find more of my perspective here for those who are curious: https://tcsidewalks.blogspot.com/2021/10/what-should-we-do-about-saint-pauls.html

    1. e

      Yes, you are the primary white urbanist implicated by this just critique— your work to discredit this tenant led effort should make you feel ashamed

    2. Archie Mc

      First you didn’t talk to anybody that I can see that isn’t a self-identified YIMBY who are pretty skittish about regulation of developers/landlords period. Jenny Schuetz for example is a major proponent of public housing privatization. Second you assume that there is zero cost to doing nothing. It’s new, it’s radical, it’s being pushed by working class tenants and no, it has not been vetted by the YIMBY neoliberal account or the Brookings Institute. We’ve been trying the neoliberal think tank approach for the past 40 years and look where that’s gotten us. Let’s be brave and try something new!

      1. Bill LindekeBill Lindeke

        I guess you’re right about Schuetz. I didn’t know that about her. Honestly, I just emailed a whole bunch of national housing institutes and transcribed whoever got back to me. But in general, I have talked to lots of people, on and off the record, from many perspectives. I’m not sure what “skittish” means, as many or most people think there needs to regulations for landlords (as do I). I just think you should be a bit careful about how this works, as rent control has backfired many times before. I think we need both market-based housing, and big investments in subsidized housing for people who need it. Rent control is a marginal piece of the puzzle.

        As for the experts, there’s a firm consensus that the policy, as crafted, will stop most new construction. I think that’s a problem. Both you and Tom imply we have “tried” increasing the supply. I don’t think that’s true, not if you look at the city’s housing production numbers, which have been pretty abysmal for more than a decade.

        I think we’re disagreeing about this: Is the housing supply in Saint Paul broken, and if so, how long as it been that way? Over a 20-year period, Saint Paul rents have kept pace with inflation, pretty much. (https://tcsidewalks.blogspot.com/2021/10/what-would-rent-control-policy-do-to.html) The rental market was not broken then, was it? Wages have been flat, for sure, but housing costs weren’t the real problem leading to housing insecurity in the 1990s and 2000s.

        The current rental vacancy problem stems from the fact that Saint Paul used to build more housing than we have in the last 12 years, thanks to the housing shortage that dates to the ’07 crash. That’s the key reason why the vacancy rate has been so tight.

        Mostly I think we’re talking past each other here. I am for rent stabilization, which would be “new” to us but has worked to keep rents predictable in other cities. I just think the HENS proposal is badly designed, and in some pretty glaring ways that I think will lead to bad outcomes for renters and non-renters alike. I hate to be on the same side as the MHA, but I have looked into this pretty thoroughly. Feel free to send me any links or references to any information that might shift my persecutive. Who should I be reading or talking to about how rent control like this will solve the housing crisis?

        1. Sheldon Gitis

          “As for the experts, there’s a firm consensus that the policy, as crafted, will stop most new construction.”

          The suggestion that limiting rent hikes will somehow the cause an inadequate supply of new apartment buildings, or that there aren’t already far more than enough recently built apartments, is ridiculous.

          If the rent control ordinance is voted down, and the apartment building construction boom goes bust (as it inevitably will), what are the “experts” going to say stopped new construction?

    3. Trademark

      People can disagree with Bill’s position and not attack him as a person. Rent control is not a cut and dry issue there are many factors and unknowns. To just accept a policy because it is championed by tenants is simplistic and anti-intellectual.

      Personally I think there are better more targeted programs that could be had but we are unlikely to get those. So in order to stem the rent raises vastly outpacing income in the lower class (this is not a middle class or upper class issue). This program is probably better then nothing. Even though something that would just focus on rental assistance for those who need it wouldn’t have as many unintended affects.

      Its messed up to discredit someone who has probably spent hours of their time researching into this in good faith. Who agrees with us on the majority of issues (I’m assuming). And not attacking their points but instead attacking their character and bias.

      1. Bill LindekeBill LindekeModerator  

        There’s a case to be made for rent control simply on an emergency basis, that rents are spiking right now and this is an interim solution that will stop that from happening while we sort out something that will actually address the more fundamental problem. But nobody is really saying that (except Trademark here, and the Mayor). Everyone is pretending instead that this policy, which to me is pretty flawed, has no problems and that any who says otherwise is [insert]. This “emergency basis” case, by the way, is simply based on national articles I’ve read about rents spiking right now, not Saint Paul numbers. It’s sort of a COVID-related fluke, with little to do with long-term and short-term trends. That’s why I would dearly love some actual data on rents in Saint Paul by neighborhood, focusing particularly on the last few years. (That’s why I tried to see what I could find myself.) Simply repeating the 2% number based on 20-year information is not helpful to thinking about the problem renters are facing right now.

        1. Daniel ChomaDan on behalf of Norman

          Bill there is a small neighborhood statistical analysis in the 2018 California Haas policy brief that Noooorman found. I dont think it has conclusive data yet (its a pretty new framework tbh) Im on my phone so its hard to get the link, but that might be something worth checkin out as it has a framework for describing the scale you are talkin bout: neighborhoods.

      2. e

        No, I think if someone is so clearly aligning themselves against positive change while vocalizing that they support the change, just not in this way (and in no way that would be effective at all), they deserve to be called out for being milquetoast, condescending and useless

        1. Bill LindekeBill LindekeModerator  

          Q: When you say “in no way that would be effective at all”, what do you mean?

          As I wrote on my blog (http://tcsidewalks.blogspot.com/2021/10/what-should-we-do-about-saint-pauls.html), I am for a more flexible form of rent stablilization, inclusionary zoning, a large effort at building more housing, greatly increasing the affordable housing trust fund (including using innovative city resources to do so), expanding the landlord incentive program, and pushing for regional funding for subsidies. I think this would be much more effective than the current proposal at achieving housing equity for renters and BIPOC people in Saint Paul.

    4. Daniel ChomaDaniel Choma

      I just want to start this one out by saying that Bill is an A+ dude. Great piano player. Great dude to hang out with. Would totally five out of five stars if I bought a Bill Lindeke on Ebay. I don’t think he’s for sale as he has a wonderful partner and a wonderful kid and grows vegetables. Solid A+ dude, would Bill Lindeke again.

      I do think Bill has warranted concerns about unprecedented ordinances. However, I think Tom has a point here as much of this discussion is unprecedented simply because large capital interests won and it has not been tested. I’ve dug through a lot of the research (and texted Bill about it in a blind fury) and when it specifically comes to exempting new buildings. Rent stabilization without a new housing exemption does have precedent and it does work.

      First, Rent Stabilization without a categorical exception for new buildings does exist and it did effectively keep lower income people in their homes. The did this in Sweden. Hans Lind, Rent regulation and new construction: With a focus on Sweden 1995-2001, Swedish Economic Policy Review 10 (2003) http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.459.3530&rep=rep1&type=pdf While detractors argue that a free market approach would arguably create more housing more efficiently, buildings are for sure still being built in Stockholm. The biggest take-away from this article is that there is really no causal connection that academics can prove between “Hey, we have rent control” and “So there goes the housing market: No more buildings ever.” By and large, be it Stockholm or Cambridge, the analysis lacks the smoking gun that rent control ruins everything. I am not against theory and I’m not against Bill: an exceptional theorist. Knowledge is power. However, applying theory to policy and presuming the theory is correct has the danger of accepting the social and cultural powers that created the theory in the first place. Though it scares the theorists to try something new, I do think that rent stabilization without a new build exception can and will work in Saint Paul.

      Second, I wholesale disagree that this ordinance is poorly written. I think it is written very well, actually. The Section about “exemption” specifically notes that the City will expand the section before it goes into effect. This is kind of cool, actually. So let’s just say that Bill is right (and fuck he might be. He’s pretty smart and good at piano) and there needs to be a new build exemption. The only place in the ordinance that has pliability is the part where it says “Look, You want an exception? Sure, but you are gonna have to prove your case to the people of Saint Paul.” This would be a super cool place to put a new build exception. Instead of having a categorical assumption that the richest and most powerful party is gonna do you a solid by making a building in Saint Paul, New developers would have to go on the record saying why they deserve an exception. Essentially, every new development that wants to exempt from rent stabilization would have to say, “Hey: this is why I’m here for Saint Paul. This is why I’m investing in Saint Paul. This is why it will suck for me as a developer to abide by rent control. Please give me an exception because I want to be here for Saint Paul long term.” This isn’t really that heavy of a lift for developers to be honest: they already have the shit prepared because they gave it to their bank to get a line of credit. But by writing it into the ordinance, the people of Saint Paul get to know what the developer intends to do to their home. To me, that’s a huge benefit. If you want to build a building in Saint Paul and you don’t want regulation: make your best pitch. Do it in front of everyone. Transparency means that justice is served and the community can see legitimate benefit.

      So quick summary: (a) Bill is great don’t be mean to Bill, (b) This ordinance could work and has a precedent of working, (c) the text of the ordinance is flexible enough to be awesome for the people of Saint Paul in an unprecedented way. That is why I am voting yes.

      1. Bill LindekeBill LindekeModerator  

        Dan, what are you talking about when it comes to “the Section about ‘exemption’ specifically notes that the City will expand the section before it goes into effect”? I don’t think that’s accurate? I’m looking at the ordinance; I don’t see anything like that. Maybe you could quote it?

        https://www.minnpost.com/wp-content/uploads/2021/09/Saint-Paul-Ord.-193A-FINAL_For-Web.pdf

        Having to go through an unpredictable variance process to change rents does not really help much when it comes to getting new housing built. The added risk is still there, and the housing supply will still suffer.

        1. Daniel ChomaDan Choma

          Sec 193A.05 Reasonable Return on Investment.
          (a) The city shall establish a process by which landlords can request exceptions to the limitation on rent increases based on the right to a reasonable return on investment. Rationale for deviations from the limitation on rent increases must take into account the following factors: (And then it lists the factors)

          What’s important is that this section is two things:

          A) sec 193a.05 gets daisy chained to section which explicitly implements the controls. Sec 193a.03. I think you can constructively interpret that “shall” means the same thing in both sections. To get real nerdy and scalia/garner on ya, this is the presumption of consistent usage contextual canon. https://www.law.uh.edu/faculty/adjunct/dstevenson/2018Spring/CANONS%20OF%20CONSTRUCTION.pdf

          B) 193a.05 states the city will create a “process.” Though this interpretation is less kerbam textualist scalia, process means “normal or actual course of procedure.” Blacks legal dictionary 5th (sorry its old, thats the one i have next to me and im working on my paper). I interpret that to mean “regular city administrative processes.” There are many administrative processes that businesses are required to participate in if they want to do business in saint paul: Licenses, zoning compliance, etc. I think its fair to assume that an admin process requiring developers to provide docs for an exception would check out in the same way an electrician has to prove they are licensed and not just a crazy experimental electrical fanatic who wants to rewire your house. An admin process seems really effective to me, its easy for developers to qualify for an exception so long as they show that freal rent control is gonna mess up their business plan. If they show that, a city admin can say “okay you get an exception for xy number of years” in the same way the city says electricians are licensed for xy number of years.

          Honestly, i think admin process is the best way to make sure rent protections ordinances survive federal appeal: if the cause of action is administrative, thats a very very well established state (as in not national) power. That makes the issue not a “taking” issue because no constitutional right of property is implicated.

          Full disc: i am a law student not a lawyer.

        2. Daniel ChomaDan

          One other thing re “variance process.” Variance process is generally a common law property thing. Ie, can i have an exception to the zoning code so that i can have a guinea pig farm in Frogtown and have that exception run with the land if i sell my house.

          Thats not whats happening here: this exception limits the way a business can operate. This is much closer to admin processes where city administration can (and often do, an have already existing staff to do) enforce regulations like city min wage and sick and safe time. Its not about the property’s zoning, its about how the developer does their business. Its a waaaay easier admin process for the developers. That will not stop them from shouting from the rooftops that it is impossible up until the moment it is required and turns out it is super super easy and hardly puts them out because once again, they already gave the documents required for compliance to their bank for their business plan

      2. Monte Castleman

        Isn’t the whole country of Sweden under rent control? So a developer can’t make a ton more money by building in Malmo as opposed to Stockholm, like under the proposed ordinance a developer could just by building in St. Paul Park instead of St. Paul?

        1. Daniel ChomaDan

          Thats a good point, sweden has two layers of control.

          they get into that a bit in the sweden shit, monte. A) some places in sweden are more regulated than others, so the economic impacts still have two categories of impact. B) just because there are two categories doesnt mean the more regulated category screws landlords. It posits this example: what if the market in the future goes down? Here rent stabilization inflates the value of the landlords profits to protect their interests and ability against getting gobbled up by the market. It cuts both ways, but generally we only talk about when rent control is bad for landlords. There are a lot of measurable economic metrics and theories where it is good for landlords, especially small landlords. The key word is stable in rent stabilization: a stable and predictable economic environment helps all the parties who benefit from a stable society. Usually that is local investors and small landlords. Its only the big interests that benefit from destabilizing the market to buy low sell high.

          Anyway. Check out that sweden shit. Its rad. -d

          1. Bill LindekeBill LindekeModerator  

            Dan, two reactions.

            First, to me, the article on Sweden illustrates how very different the housing dynamics are there (and also in Montreal, Vienna) versus Saint Paul, Minnesota. The main differences are the level of Federal housing support, the percentage of the city that’s rental housing, and the scale at which the change is proposed.

            Second, pointing to a byzantine legal loophole as a way that housing construction can be allowed to remain flexible around leasing and setting rents won’t really solve the problem. Even if it’s theoretically possible for Saint Paul to administer this in a way that doesn’t have an impact on flexibility for new housing, well it’ll still appear to be, and have the effect of being, a significant deterrent to people financing new housing in the city. Every other city in the country will allow developers to move rents around to lease their buildings, and in Saint Paul we’ll have some sort of weird system that nobody understands. I think the effect will be the same: you’ll see construction decrease and the housing shortage get more acute in the city. I don’t see a way around that unless the policy is changed, and if you really want to flex your legal chops, dive into the City Attorney’s Statement on that for me. (https://tcsidewalks.blogspot.com/2021/10/saint-paul-city-attorneys-fulkl-remarks.html)

            1. Daniel ChomaDan Choma

              Man, even when we disagree I gotta say: you do journalism right, bro. That’s a great TC Sidewalks piece and you got your finger on the pulse. Likely we should talk about this offline. I’ll grab you a beer soon. Dan

  2. Megan

    I appreciate the call out of white urbanist’s desperation to be right. It also smacks of irony given the article laying out a white urbanist’s desperation to be right.

  3. Mike

    I think this is a good example of why activists should not write legislation. The aggressiveness of the policy, the punitive approach to landlords (many of whom are individuals and couples, not just developers and big banks who are a more appealing target of populist ire), the defiant denial of input from true experts in housing policy and rent control. The fact the group is proud of the fact that the policy drivers don’t include all the stakeholders in the housing market is another give away that this is not a well through out policy (sorry but quantity of signatures does not equal or guarantee quality of proposal). Writing good legislation is often messy and requires engaging people from all perspectives of an issue. Now knowing from the city attorney that the city will be stuck with this policy for a long time, and folks like the author may sue if they try to repeal or change the worst parts of it, the pledge by Mayor Carter to vote yes but hope he could change it quickly looks even worse than it did when he initially made it.

    1. Daniel ChomaDaniel Choma

      I mean, a lot of activists are legal professionals who are experts themselves. Many of them are in favor of this. Take Margaret Kaplan: an expert, top-20 law school graduate, advocate. https://www.minnpost.com/community-voices/2021/09/st-paul-rent-proposal-offers-predictability-for-renters-and-landlords-alike/ She favors this policy. The presumption that “experts” aren’t involved in writing popular ordinances for popular vote is fundamentally illogical. Activists are part of our community and many of them are experts who like the rest of the community get exactly one vote. This is a purely democratic exercise. To presume that “experts” and “activists” are mutually exclusive is foolishly condescending at best and anti democratic at worst.

      1. Mike

        I did not claim the issue is that activists are not knowledgeable. The issue is that the activists have an extreme agenda, and this policy is hopelessly biased and lacks the balance and input from multiple perspectives you need for something so complex. When for example the author above opines that rent increases should only mirror tenant wage increases (apparently decoupling rent from the cost of owning and operating the building) that’s not a policy designed for the long term health of the housing market.

        I also think it’s an exaggeration to say “Many experts” are in favor of this. I think Bill Lindeke has done more than a fair job digging up real experts rent control at a national level, and the consensus is far from supportive.

        Will the city have to invest in a large infrastructure to monitor compliance for the almost 60,000 rental households and process exception requests for thousands of properties? Will St. Paul follow the Oakland model with a full time department of 26 people who monitor and enforce rent control policies?

        Pretending all landlords are impersonal large banks or developers when (at least in the case of Minneapolis per the CURA study) a majority of small buildings are owned by individuals is an approach you take when you want to prioritize tenant issues over the mom and pop landlords. Ms Kaplans on-line comments that she appears to be open to the city making changes post passage (when the writer of this piece would clearly not be in support of any changes) makes me think it’s a full court press to not scare people away given how extreme the policy is because if defeated it may be hard to resurrect another run, with a more reasonable approach.

        1. Monte Castleman

          The person sitting in the cubicle next to me at work (or who would be if we were in the office) owns five rental properties. He doesn’t make any money on them (and if he did, presumably that would be his job rather than working next to me). As soon as the rent starts to accumulate in the bank account, one of the properties needs a new roof or new furnace or something, and the account balance goes back to zero. He’s fine with this, because the houses are his retirement nest egg, not his current income stream.

          However if the law changes so he starts taking a loss on a monthly basis, he wouldn’t be able to sustain that. He’d be forced to sell his houses and pick some other kind of investment, and probably the houses would go to an out of state corporation who can make money on them by deferring maintenance and letting them go to seed and making the tenants put up with balky furnaces and leaky roofs and obtaining an economy of scale with renting and the absolute minimum amount of maintenance,

        2. Joe

          As part of its Initiative on Global Markets, the University of Chicago surveys leading economists on various issues to get a sense of the range of opinions on topics, and it was pretty wild how unified (including all the women economists and economists of color, Tom!) the opinions were that rent limiting ordinances negatively impact affordable rental supply.

          https://www.igmchicago.org/surveys/rent-control/

          The best thing I can say about this piece is that it lays clear the dismissive attitude and class warrior mentality of the worst of the rent stabilization supporters.
          You can believe both that housing is a human right and that an adequate supply of housing that is responsive to changing demand won’t exist without private development. The industries associated with financing, constructing, and maintaining that private development are complex, and this referendum is an overly simplistic attempt at limiting rent increases that makes it even more complicated and costly for the people critical to increasing the supply of housing. This could have been done in a way that better balanced protection for renters with incentives for property owners, but as is clear from this piece, there are supporters that neither understand nor care to understand the experience of property owners.

          1. Bill LindekeBill LindekeModerator  

            Well, I don’t agree with that take either, but I do appreciate you including a citation.

            All I am saying is that it’s possible to believe that not all rent control is good, and not all rent control is bad, that there are ways to craft these policies that can be harmful or helpful for the big picture of housing equity. I get that not everyone is going to adopt a nuanced position on this, especially right now after some extreme political events over the last few years. But that’s what I think looking at this, and it’s why I support the Minneapolis ballot measure but not the Saint Paul one. If the Saint Paul proposal had a new construction exemption, I’d hold my nose and vote for it.

            1. Sheldon Gitis

              If a new construction exemption is in the Minneapolis ordinance, maybe that’s what’s right with St. Paul proposal and wrong with the Minneapolis proposal.

              Why is new construction any more problematic, or worthy of an exemption, than mom and pop duplexes or any other sort of residential rental? Why do the companies managing the new construction properties have any more need to jack up rents than the managers of properties that have already been built?

              1. Monte Castleman

                An owner of an existing apartment building is less likely to tear down their building in response to the ordinance than the prospective owner of a new building is to not build it.

                Maybe the St. Paul ordinance won’t actually worsen our housing shortage, but does St. Paul really want to risk being the first city in the country to find out?

                1. Sheldon Gitis

                  Are you saying not tearing existing buildings is a bad thing? If in fact the ordinance would result in fewer tear downs, which I think is doubtful, I would say that’s a benefit.

                  I still don’t get why new construction deserves an exemption any more than any other building. My guess is the reason the developers, investors, property management cos. etc. want special consideration is that they fill their entirely vacant new buildings with move-in deals and then claw back the move-in allowances with exorbitant rent increases as soon as the lease expires. If the proposed ordinance discourages that sort of bait-and-switch maneuver, that’s a good thing.

                  1. Monte Castleman

                    Because with with a new building, developers have a choice not to build it if it would be subject to rent control. As opposed to an existing building that they’re stuck with. Why would any developer ever want to build anything in St. Paul ever again if it would immediately be under rent control and they could build the same building in Minneapolis and not have rent control? We want developers to build new buildings.

                    1. Sheldon Gitis

                      Why do you want developers to build new buildings, as opposed maintaining the buildings they’re “stuck with”? Are you worried the developers might not have a roof over their heads or food in their stomachs if they can’t continue acquiring and bulldozing cheap commercial-industrial land?

                      Why do we need some billionaire acquiring and demolishing acres of urban landscape and plopping big box apartment buildings on top of parking garages?

                    2. Trademark

                      Because increasing density is important. No one’s talking about demolishing neighborhoods at a time. But empty lots that get built up are a good thing. If we make it more difficult to build in the city. Then we could very easily see a return to exurb development which requires carcentric neighborhoods.

                  2. Mike

                    Developers who have weighed in on this topic cite the risk profile of their investors as the primary reason. If you are a bank or other investor, and you have an opportunity to invest in a building but there is this unknown future market out there, but you know already that your revenue will be limited at no more than 3%, no matter your costs, or inflation, your improvements, or the market,, from when you start – and you’re several years from starting, and your initial rents may vary based on market dynamics (like several new large projects creating supply so you have to lower rents to be competitive at the initial, or local economic downturn) – that’s an unattractive position, if across the city line you could invest and know that rents are able to adapt to an unknown future, why invest in the first when the second is an option? And ultimately that’s a key point, these investors have options and will probably not willingly flock to a project that has unnecessary risk. Thats a primary reason why every other rent control scheme has found it smart to exempt these buildings to prevent a big drop in new supply production. If St. Paul goes ahead, and given the likely difficulty to make substantive changes, they will become a test case for this question – and if the critics are right, the other cities in the metro will be the beneficiaries.

                    1. Sheldon Gitis

                      Developer revenues come from development fees, not rent payments. Likewise, real estate investors make money collecting tax-exempt interest payments, not from renting apartments.

                      The suggestion that the deck needs to be stacked in favor of real estate developers so that investors and property management cos. are guaranteed to profit is ridiculous. If “several new large projects’ create a glut of supply, then the dupes who invested in the oversupply deserve to take a hit. Likewise, if there’s a “local economic downturn”, wealthy real estate investors deserve no more protection from the poor market than low and moderate income people renting apartments.

                      If Minneapolis, Bloomington, Roseville or any other municipality wants to outbid St. Paul in a race to the corporate welfare bottom, St. Paul would be wise to let them do it. The shopping malls and big box apartment buildings and retail warehouses, all surrounded by acres of highways and parking lots, are all unpleasant, unsustainable, dinosaurs, regardless of their age.

                      Without massive amounts of corporate welfare, all the highway-industrial development mess would have been gone long ago. The new buildings that developers have been building next to the freeway ramps are history, not the future.

          2. Sheldon Gitis

            “the University of Chicago surveys leading economists..and it was pretty wild how unified (including all the women economists and economists of color, Tom!) the opinions were”

            The University of Chicago “leading” economists…aren’t they the same Milton Friedman followers whose trickle-down ideas have led to the wealth disparities that make some sort of regulation necessary in order to prevent things from spiraling out of control?

            https://www.forbes.com/sites/stevedenning/2013/06/26/the-origin-of-the-worlds-dumbest-idea-milton-friedman/

            1. Joe

              The University of Chicago surveys economists from various programs, such as MIT, Harvard, Yale, Cal, etc. It would have been apparent had you followed the link.

              1. Sheldon Gitis

                If you had the slightest knowledge of the school of thought emanating from University of Chicago, exemplified by the trickle-down fallacies of Milton Friedman, you’d know that the misguided thinking has spread far and wide, to all the institutions you mention and more.

                1. Adam MillerAdam Miller

                  There are economists from various parts of the political spectrum in those poll results.

                  But regardless, “rent control hampers housing supply” is an Econ 101 theoretical answer, which should always be subject to empirical correction. Unfortunately, I’m not aware of good empirical answers one way or the other (note, I am not an economist).

                  You’d likely get different response to “does a higher minimum wage reduce employment” from that squad (likely closer to 50/50) because economists have been able to show that it’s empirically untrue. The rent control data isn’t there.

    2. Tim BrackettModerator  

      I disagree wholeheartedly with the assertion that “activists should not write legislation”. The assertion further marginalizes activists by framing them as “unqualified” or “incapable” of determining their own fate. I remain confident the good people of St. Paul who are advocating for rent stability have engaged people and considered all perspectives of the issue.

  4. Jeff

    The bottom line is I know several developers who put plans on hold when this was put up for vote and have now stopped any future housing builds in St Paul. You will get higher rents because housing supply will not keep up, you’ll have less housing options and less maintenance of old buildings. Keep patting yourselves on your back.

    1. Sheldon Gitis

      Tell me one planned housing project that has been tanked as a result of the voter approved rent control ordinance.

      Some developers, like Ryan and their Ford site proposal, might try to use the ordinance as an excuse to cancel or delay some less profitable aspects of their huge, long-term projects, but the ordinance is not primary reason Ryan or others might try to renege on their deals.

      Any cancellation or delay is simply a ploy to sweeten the deal for the developers and their investor clients.

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