Ward 3 City Council member Saura Jost voted in favor of the St. Paul rent stabilization referendum when it was on the ballot in 2021. She even canvased for it.

“I felt that I shared the same values of folks that were really pushing for it. I felt that we needed to find ways to keep renters in their homes,” Jost said this week.

Now the first-term council member is the lead author of an ordinance that would permanently exempt any properties built after 2004 from the measure. This amendment comes amid a dramatic downturn in housing production since rent control was implemented in the city, though Jost said this decrease isn’t exclusively because of rent control.

“Construction costs continue to rise. Interest rates are really challenging right now. As a council, the only thing that we can do anything about is the rent stabilization ordinance,” Jost said.

On Wednesday, the council voted 4-3 in favor of the ordinance to exempt new development from the original ballot measure’s 3% cap on rent increases, effectively weakening the measure.

The new exemption was originally proposed by Mayor Melvin Cater last year. The council ordinance is co-authored by three council members — Jost, Anika Bowie and council President Rebecca Noecker.

Here’s what led city leaders like Jost to change course:

Development plummets 

Four years after the rent stabilization referendum passed, the numbers are in and they aren’t looking good for St. Paul development. In January, MinnPost columnist Bill Lindeke crunched the numbers from the U.S. Department of Housing and Urban Development database, analyzing housing production for every Midwestern city over a population of 120,000. St. Paul ranked #7 on the list for largest decline, with an 81% drop-off from its previous three-year average.

Jost acknowledged the figure in an interview with MinnPost.

“We’re at the point where housing is just such a priority and we’re just so far behind, and we just really need to do something about this as soon as we can to try to get our city back on track,” Jost said.

It’s worth noting that Minneapolis was at the top of the list for housing development dropoff, with an 88% decrease from its former three-year average. In 2021, the same year the St. Paul rent stabilization referendum passed, Minneapolis voters approved a charter referendum allowing the City Council to explore rent control, but that’s yet to occur. A January Federal Reserve report noted that 2023 was the first time in years overall housing supply goals in the Twin Cities overall had not been met.

Looking to protect renters 

Work to improve conditions for renters is still underway, Jost noted. It’s just a matter of finding policy that effectively results in this outcome, she said.

The vote on the measure to amend rent stabilization is being taken in tandem with action on a new tenant protections ordinance — a situation Jost and other council members have emphasized leading up to the Wednesday meeting.

“We’re trying to apply the right policy tool to the right problem we’re trying to solve. So we’ve got tenant protections to help with renter stability, keeping folks in their homes and finding housing,” Jost said. “Rent stabilization will still be able to also do that, but we’re recognizing the issues that it’s created in housing supply.”

Refocusing on tenant protections is historically significant in St. Paul.

The 2021 rent stabilization referendum came hot off the heels of a federal judge overturning St. Paul’s first attempt at new rules to protect renters. The ordinance passed in 2021 but ultimately was blocked by a federal judge after landlords filed a lawsuit.

The new attempt at tenant protections was also part of what  inspired interim Ward 4 council member Matt Privratsky to seek his temporary role despite not planning to run for the seat in the upcoming special election to fill the seat previously held by former council President Mitra Jalali. Privratsky, who served as Jalali’s aid from 2018 to 2021, played a major role in the council’s first attempt to write tenant protections into the city’s legislative code before it was blocked.

“I care a lot about making sure this new version (of the tenant protection ordinance) can stick,” Privratsky said in an interview with MinnPost during his first week in office. “And similarly, rent stabilization, I think people underappreciate how much it came out of the fact that tenant protections got repealed and washed away, and that created a lot of pressure where folks in the community who were fighting for renters and tenants and housing justice really had to pivot to pushing something like rent stabilization.”

Highland Bridge: a “quintessential example” 

The impact of rent control is not simply hypothetical. St. Paul Area Chamber of Commerce President and CEO B Kyle called the Highland Bridge development on the 122-acre site of the former Ford plant a “quintessential example” of development held up by rent control.

The massive mixed-use project is about 1,000 housing units behind schedule of its approximate 4,000 units planned, Kyle said.

“This isn’t about good people versus bad people,” Kyle said. “This is all about the cost of doing business and the risk associated with doing business and, frankly, the ability to do business, right? It isn’t about, ‘Well, if you were a better person you would do this project.’ It’s about: In order for a project to pay for itself, to not lose money, you need to be thoughtful about where you do it, and move into an environment that is receptive and supportive. And the ordinance as it stands is highly problematic to that, as we’ve seen.”

This article first appeared on MinnPost and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.