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Thursday, March 30, 2023

Dominium Hikes Rents Nearly 8% in St. Paul, Despite Rent Control

The grease stain that runs half the length of the carpet in the outside hallway along Jeffrey Swanson’s floor is more symbolic for him than it is an inconvenience. The two common rooms on the bottom floor of the building, both of which have been shuttered and off-limits to tenants for the better part of a year during Dominium’s building-wide refurbishment of 808 Berry Place in St. Paul, are similarly revealing due to their bad paint jobs.

The new wheelchair-access sign, which points up a set of granite outside stairs and into the courtyard, is another feature. Additionally, as of early June, all renters are required to get renter’s insurance or pay daily penalties. And rent payments are no longer covering the parking space.

The new rent-control statute in St. Paul places a 3 percent cap, yet a notification of a 7.97 percent rent increase just arrived in the mail.

Swanson and the other tenants at 808 Berry Place received a rent letter from Plymouth-based housing provider Dominium informing them that their rent is controlled by federal laws since the building was built using Section 42 low-income housing tax credits. The inference appears to be that Dominium is immune from the new 3 percent annual rent cap set by the city.

Swanson said he did not reside in a sublet. He pays more than $2,200 a month for his and his wife’s market-rate loft at 808 Berry.

Swanson, an IT specialist, has his fair share of complaints about shortcomings in his apartment complex, which prides itself on offering luxury living close to the Green Line. He said that the majority of the patio furniture at his building had been removed without being replaced.

Supply chain concerns, they said. Well, how about you wait till the new item is prepared, I asked? And they wouldn’t act in that way,” recalled Swanson.

Swanson claimed he was shocked when Dominium told residents of building improvements and a subsequent rent increase of slightly under 8%. The new voter-backed rent-control policy in St. Paul permits landlords to raise rents over the city’s 3 percent maximum as long as they self-certify the hikes and present evidence of renovation efforts or other justifications for granting a hardship exemption.

Additionally, Dominium’s planned rent increase is barely under the 8 percent threshold, which would need a review hearing for any rise higher than that.

The modifications at 808 Berry, according to Khayree Duckett, a representative for Dominium, were planned for years and had nothing to do with the city’s new rent-control law, which went into force on May 1.

In the spring of 2021, Dominium closed on the financing for the upgrades. In response to rising inflation, building expenses, property taxes, and other factors, Duckett indicated that Dominium will seek exemptions from the city’s rent cap at all eight of its St. Paul properties and even greater hikes at its west metro sites.

According to Duckett, “each of our communities in St. Paul has some funding through the low-income housing tax credit financing program, or LIHTC,” and those rent limitations were implemented as a result of a contract with the city of St. Paul. “When we built those communities, they were partners to that arrangement. We think they’re already under rent control.

“You’re developing homes of market-rate quality, but you’re only getting rents affordable for folks with lower incomes,” he continued. Some of them would be making hundreds more per month if these buildings had been built without the low-income housing tax credit program.

The repairs, according to Swanson and other tenants, appeared to be more focused on market-rate apartments like his own than the federally subsidized Section 42 homes in his building. The construction of such apartments was funded by housing tax credits for low-income people, and federal regulations provide for equal maintenance of market-rate and affordable housing.

The soon-to-be early retiree Swanson claimed he began pleading with management on behalf of the less fortunate tenants in his building. All of the residents of 808 Berry share his concerns.

An excellent-functioning refrigerator was removed from Barbara Marine’s flat two months ago, according to the Section 42 tenant. She considered the new appliance to be a degradation because it was missing an ice maker and a butter drawer. Other than that, her flat hasn’t seen any notable upgrades.

I argued that I didn’t require a new refrigerator. She recalls telling a property manager, “It’s fantastic. He replied by saying he will look into that. I haven’t heard anything since, of course. According to what I understand, Section 42 must be kept at the same level as the market rate. And it isn’t.

She said, “I’ve been here six years.” I’ve had six managers.

Swanson claims that his 8% rent hike at 808 Berry is not the only surprise. Now that he’s been informed that his parking space will no longer be covered by his lease, he’ll also have to pay a new monthly cost, bringing his overall increase to almost 12 percent.

The building started requiring all tenants to get renter’s insurance in the first few days of June. Tenants said that building management posted written letters on each apartment door informing residents of the new requirement and warning that daily fees would start accruing if insurance was not obtained within two weeks.

A renter of a market-rate apartment said, “We never got an email or a phone call, and having only two weeks’ notice in the midst of summer when a lot of people are vacationing seemed troublesome. Simply simply, we wouldn’t have known if we had been away.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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