Minnesota Senate Republicans want to nullify the rent control caps that St. Paul voters approved last fall and prevent other cities from enacting similar limits.
House Democrats would restrict landlords’ rights to evict renters.
Those DFLers also favor spending $382 million of the state’s $9.3 billion budget surplus to ensure that thousands more Minnesotans have affordable places to call home. GOP senators approved spending a relatively modest $50 million primarily to promote homeownership.
The two sides appear headed to a House-Senate conference committee where they will attempt to resolve the vastly different versions of housing bills approved by the two chambers this week.
SENATE REPUBLICANS: NIX RENT CONTROL
The Republican-controlled Senate on Wednesday voted 41-26 for its housing bill that offers little to assist tenants who are struggling to pay rent but helps families purchase single-family homes. The bill’s sponsor, Senate housing committee Chair Rich Draheim, R-Madison Lake, said Minnesota needs 50,000 more housing units, and his legislation would spur housing construction and enable more families to buy homes and start building wealth.
The Republicans’ proposed retroactive rent control ban sparked the longest and most heated debate on the bill. DFL senators argued the ban would overturn the will of St. Paul and Minneapolis residents who voted for limits on rent increases in the November elections.
“You’re attempting to overturn the will of the people,” Sen. Ann Rest, DFL-New Hope, told her GOP colleagues. She accused them of asserting “that somehow we (senators) know better than they do. … We don’t.”
But “sometimes the voters get it wrong,” said Sen. Eric Pratt, R-Prior Lake. Sen. Zach Duckworth, R-Lakeville, argued rent control tramples on the private property rights of building owners.
Sen. Jason Isaacson, DFL-Shoreview, responded that threatening property rights doesn’t justify overturning election results.
Draheim contended rent control has a devastating economic impact on the cities that impose it. Investors refuse to put money into apartment buildings where rents are restricted.
“Rent control stops the production of units,” he said. “Throughout the world, rent control has not worked.”
A DFL amendment to delete the rent control provision was defeated on a 34-33 vote.
But the ban will be a tough sell for Republicans in conference committee negotiations with House DFL leaders and Democratic Gov. Tim Walz. GOP senators passed a similar rent control prohibition in their 2021 housing bill, only to have it blocked by Walz and House negotiators.
Earlier this month, Draheim said he wanted to shift the state housing debate to focus more on single-family housing. Historically, he said, lawmakers have spent the vast majority of state housing resources on rent, and “that hasn’t gotten us very far.” In addition to providing incentives for homeownership, including mortgage loans to “underserved communities of color,” his bill aimed to reduce housing costs by easing city-imposed restrictions that drive up housing prices.
HOUSE DEMOCRATS: ASSIST RENTERS
The DFL-run House voted 70-62 Tuesday night for a wide range of housing programs that would protect renters from evictions, prevent homelessness, reduce costs for some homeowners, provide some rental assistance payments and, like the Senate, offer down payment aid to people trying to buy their first homes.
“Affordable housing is a fundamental need, and our housing budget makes wide-ranging investments throughout Minnesota,” the House housing panel chair, DFL Rep. Alice Hausman of Falcon Heights, said in a statement. Her bill was crafted to “address the most persistent housing costs and help those in perilous situations achieve a safe place to live,” she said.
Advocates for low-income renters wanted lawmakers to replace the federally funded RentHelpMN rental assistance program that is scheduled to end June 1 after paying $437 million in rent subsidies in more than 100,000 payments. GOP senators harshly criticized the Housing Finance Agency for slow delivery of payments and never considered starting a state rent subsidy program, but the House included a $25 million grant program for counties to deliver rental assistance.
The House bill also provides $100 million to preserve “naturally occurring affordable housing” with relatively low rents but no federal subsidies that are at risk of being lost to market speculation. It also offers down payment assistance to first-generation home buyers, homelessness prevention programs and a ban on evicting tenants who have applied for rental assistance.
More housing investments are expected in the House tax, bonding and human services finance bills, Hausman said.
“Throughout our budget, House DFLers are putting forward proposals to ensure all Minnesotans can have a place to call home,” House Speaker Melissa Hortman, DFL-Brooklyn Park, said in a statement.