Minneapolis Ballot Question 3: Rent Control

The ballot measure also gives City Council "a clear direction that affordability is a big issue to us, that we want to work on it together. This gives them the power and direction to make it a top priority."

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Question 3 on the Minneapolis ballot on November 2 is about giving the City Council the ability to create policy around rental control.



In our conversation with Sen. Patricia Torres Ray about the three ballot questions for Minneapolis voters, she says she is heartily in favor of this policy change. “It is a no brainer,” she says. “City housing needs to be more affordable. Young people want to live here, but are having a big problem being able to afford to do that. It helps the future economy, vibrancy, and tax base that sustains our public spaces and schools.”

The ballot measure also gives City Council “a clear direction that affordability is a big issue to us, that we want to work on it together. This gives them the power and direction to make it a top priority.” 


Average Minneapolis Salary and Rent

According to ApartmentGuide.com: The average rent in Minneapolis for a one-bedroom apartment is $1,455, which necessitates an annual salary of about $60,000.

According to TwinCities.com: HousingLink found virtually no change in the two-bedroom market in St. Paul, where rents have stayed around $1,245. It also found no apartments at rents that would be considered affordable to a family of four living on about $31,000 a year, or 30 percent of the metro median income.

According to the University of Minnesota Center for Urban & Regional Affairs: From 2010 to 2019, BIPOC renters generally, and Black renter households in particular, saw rent increases while incomes fell. White households tended to have increasing incomes consistently rising more rapidly than rents. Their graph based on American Community Survey data from census information:


Perspectives on the Need for Rent Stabilization

Align Minneapolis is an interfaith collaboration of 17 Minneapolis churches, synagogues, and mosques and people with lived experiences working together to address homelessness and poverty. The organization mission is “to shift from an immediate needs approach to long-term solutions through a combination of education, advocacy, and action.” Align’s Minneapolis steering committed voted “yes” for Question 3, and has offered supporting material about why. Here is some of that material in summary.

Center for Urban & Regional Affairs, University of Minnesota

Approximately 200 cities and two states in the United States have a form of rent regulation. Many of these programs allow owners to update costs for various reasons, such as major capital improvements, utilities increases, and property tax hikes. There are many ways to approach rent cap exemptions, such as for new construction.

“Research indicates that rent regulations have been effective at achieving two of their primary goals: maintaining below-market rent levels and moderating price appreciation. … There is widespread agreement that rent regulation increases housing stability for tenants who live in regulated units. Little empirical evidence shows that rent control policies negatively impact new construction. … Rent regulations are shown to be related to an overall reduction in rental units as owners have commonly responded to rent regulation by removing units from the rental market via condominium conversion, demolition, or other means. There is little evidence that rent regulations cause a reduction in housing quality. … There is considerable debate about whether the majority of benefits from rent stabilization go to the neediest households.”

The National Law Center on Homelessness & Poverty

Currently, only 25 percent of those poor enough to be eligible for housing assistance receive it. Meanwhile, wages have stagnated or fallen, and other social safety nets have shrunk. As the overall number of low-income renters has increased over the years, the availability of affordable housing in the private market has also decreased. … This has led to high rates of housing instability, evictions, and difficulty finding housing — any of which can be a proximate cause of homelessness.

Affordable housing is rapidly decreasing nationwide, and today there are only 35 units that are affordable and available for every 100 extremely poor renter households. This housing gap is even more severe in many of the nation’s large and growing metropolitan areas. Multiple factors contribute to the affordable housing gap, but perhaps none more so than the rapidly rising costs of rents as compared with

Renter households that pay more than half of their total household income on housing are at a record high of over 21 million. While housing cost burdens affect renters of multiple income levels, our nation’s poorest renters—which comprise 26 percent of all U.S. renter households—feel the housing burdens most acutely. Indeed, approximately 1 in 4 of these renters pays nearly 70 percent of household income toward rent and basic utilities.”household wages.

Urban Institute: What does research into rent control tell us?

“Most research on rent-control laws has come from economics literature, where it is often referenced in introductory texts as a classic case of an ineffective and counterproductive policy. Economists argue that rent controls reduce incentives to maintain existing housing or build new housing, leading to a growing mismatch between housing supply and demand and an increase in prices overall. Because contemporary rent-control policies usually have features that mitigate some of these negative impacts, however, this general critique is less salient when applied to real-world examples, and empirical studies looking into these effects have found mixed results. More broadly, economic analyses often ignore other social benefits associated with neighborhood stability, displacement prevention, and inclusivity.”


Possible Drawbacks of Rent Control

  • Long-term living in one place can lead to conversion to owner-occupancy, leading to reduced rental opportunity
  • If developers don’t see as much profit potential, there could be a decrease in housing stock
  • Not all low-income households are aware of access to affordable units

Resources

Candidate Forum Series about Question 3 were hosted by Make Homes Happen MPLS, with city council and mayoral candidates who were able to participate.


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