The Star Tribune Editorial Board outlines their opposition to rent control proposals in St. Paul and Minneapolis.
Slightly more than half of the households of Minneapolis and St. Paul pay rent. Though rent increases have skipped along modestly for most of them for years, renters with lower incomes have faced bigger jumps both in percentage terms (sometimes egregiously so, anecdotally) and in proportion to the growth in their incomes. Economic and racial equity, especially these last few years, have developed into intense matters of concern. Not to mention that inflation in the U.S. has been running hot.
Into this environment come ballot questions in both cities leading the way to limits on how much rents can rise. Given the factors above, the idea may seem appealing. Nonetheless, voters should reject both initiatives — in St. Paul because the ballot question tells voters exactly what it would do, and it’s worrisome; in Minneapolis because it doesn’t, which is worrisome; and in both cities because any short-term benefits are likely to be undermined in the long run by the larger forces of economics.
Before we proceed, a few words about language. Depending on who’s speaking, you’ll hear the proposals described — for both historical and marketing reasons — as either seeking rent stability or rent control. Stability for renters is indeed the aspiration, but control is the means of pursuing it. The latter term applies no matter the result, so it’s the one the Editorial Board will use in this discussion.
Further, some background. Economists have long considered rent control one of the least successful public policies. Simply put, it discourages investment, leading to less new rental housing where it’s most needed and less upkeep for existing units. It gives landlords an incentive to convert rental units into owner-occupied housing. It’s market distortion. It’s friction.
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