From WSJ.com: Last November 53% of St. Paul residents voted for a ballot measure to cap rent increases at 3% a year. The new ordinance took effect in May, and it makes no exceptions for new construction. If your costs of doing business are going through the roof but your cap is 3% forever, that’s an equation for losing business,” says Donna Hanbery, an attorney who has represented residential property owners and managers in the St. Paul area for some 45 years. Multifamily building permits in St. Paul have plummeted nearly 82% between November 2021 and January 2022 compared with the same period a year prior, according to data from the U.S. Department of Housing and Urban Development. Minnesotans are by and large a well educated group. But educated and intelligent doesn’t necessarily mean wise. In this case by voting for rent controls they are severely slowing the inventory of new housing. Minneapolis, St. Paul’s sister city, has seen over a 65% increase in multi-family permits. What was H.L. Mencken’s quote? “Democracy is the theory that the common people know what they want and deserve to get it good and hard.”
Lol... the irony. Voting to take the democratic rights away from the people... successful people that own property. Commerce, including property rights, should be a state issue laws, they should never be a city's purview of rights to change nor alter. I never understood why cities tare allowed to wield so much power over property owners.
I don't understand the point you're trying to make. Are you cherry picking a bad outcome to dump on democracy as a whole? Aren't there also good outcomes from democracy? Would you rather live in a dictatorship? Would that be better than accepting possible bad outcomes? weird.
Well, we have one poster openly admitting being anti democratic now. so they have fewer new buildings but I assume people already living there are happy their rent is going up a ton? what you aren’t reporting on is that St. Paul has had a housing shortage for a long time because people keep on fighting multi family zoning. Consequently prices on rent have been rising steadily so people wanted to cap it. so the voters did get what they wanted and the housing shortage there is way older and due to many more reasons than that one ballot initiative but please continue to poop on democracy
Seems like the unintended consequences are that landlords may every few years not renew leases, force tenants out, start a new lease at market rate. Some of what they saved will be lost in movIng expenses. Any protections against that?
We're already getting it "good and hard" from Joe Biden. I feel the shaft every time I buy gas or groceries.
Without a linked story it is difficult to understand the background. Further, and this is just my own ignorance, but what do rent increase caps have to do with starting new construction?
I could see investors not wanted to start new apartment buildings if they know their revenues are capped at a 3% growth while inflation is 9%. 3% is very low for yearly rent increases. The national average over the last few decades is closer to 10%.
OK, that makes sense. I guess I was ignorantly thinking that they would just set rent on new buildings much higher to off set the limits, but was not thinking longer term. Thanks.
Do you also feel the shaft at paying higher taxes due to the tariffs that Trump implemented over his time in office, which we are still paying? Or did you believe him when he said that China was covering that for you?
Why are we saying that this is a universally bad thing? Less construction means the city won’t grow as quickly. That can be good or bad. Fewer taxes needed for new roads, new schools etc. Bad for those who want to move to the area, since there would be less housing, but good for current residents because their home values will go up. More green areas if land isn’t turned over for houses. Maybe fewer jobs for local construction folks. But yeah, “housing starts are down” so it’s a terrible decision.
steadily rising annual costs to manage the building and grounds, plus something for asset appreciation would certainly exceed 3%. 7.5-10% seems fair under current inflation #s and interest rates. 3% will yield a bunch of run down multi-family units in short order. Hopefully, the owners can fast track depreciation or quick sell it.
